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3m Casestudy

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Submitted By iyad614
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IBD of 3M had a new mandate. * To step up organic growth rate from 3- 5% up to 12-15% by 2008. * Target had to be met independently of growth from ongoing acquisitions

IBD sold products to business customers * Two types of end user applications * (OEMs) * Production plants- (Original equipment manufacturers)(OEM’S) * OEM catered products were high value items becoming part of a finished product

* Growth at IBD slow because OEM segment had become mature, with limited prospects of expansion.

* (MROs) * Servicing facilities –(Maintainence, repair, and overhaulers)(MRO’S) * MRO catered products were consumables of low value. (Eg: Masking tape in paintshop). * IBD had not focused on MRO segment because it was fragmented with little brand loyalty. * MRO segment was growing though.

* There are 2 ways for reaching the target according to Yegnaswami who was responsible for recommending a plan of action that would help 3M reach its target 1. Finding new customers for existing products 2. Launching new products aimed at new and existing customers.

New Strategy

Changing customer focus from OEM to MRO

* Investment priorities were changed from focus on productivity gains and cost savings towards marketing development and promotion. * New strategy was made up of four elements: growing the core business, pursuing acquisitions, and concentrating on emerging business opportunities and doubling investments in emerging markets.

* Business managers “owned” the product, while frontline salesmen owned the customer. 3M introduced the concept of account managers for the company’s OEM customers whose requirements cut across the different business units. It helped decreasing the inconvenience of a salesperson from each SBU calling on the customer…...

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