International Business- 500004
Individual Research Paper
Sydney Graduate School of Management
Surbhi Suri: 16453584
Submitted On: 09/11/2010
3M is a multinational company with branches operating all over the globe. 3M is looking to grow in the new markets for its long term strategy, and decided to service China, India, and Singapore.
3M expansion in the international markets and business strategy is build around its core competency of innovation.
3M has adopted product differentiation strategy, and provide value proposition of cost effectiveness to the customers. 3M long term strategy is to realise economies of scale and location economies by moving …show more content…
(A Century of Innovation: The 3M Story Book)
Majority of revenue generated by 3M comes from its foreign based operations. It has an export strategy as described by Dowling et. Al, Asia-Pacific ed., p471, whereby company has build its export based on the three main principles as being * enter on a small scale to minimise the risk, * expand the business once the exporting business is successful, * third and the most important one is to employ local people to promote the products.
3M has always been under tremendous pressure of providing a cost effective product suited to local markets. 3M has adopted for a transnational strategy as described by Dowling et.Al, Asia-Pacific ed, p380, where it is based on an integrated network and teamwork.
This strategy is driven by the need of local markets, and to be able to compete with the local producers. The drawback of having a transnational strategy is that having different products for different companies raises the costs, which is counter to company’s strategy of cost effectiveness.
Large international firms such as ABB (engineering conglomerates) and Ford have faced potential problems while implementing the transnational strategy. Also, another example is the case of Caterpillar – a Japanese company. Company overcome this issue by redesigning its product to