Organizations have a variety of reasons to diversify their business and many ways to diversify and retrench. Please provide an explanation.
Review the products 3M offers (http://www.3m.com/http://www.3m.com/) and the markets it serves. Select one or more 3M businesses and comment on their business diversification strategies discussing the role of business diversification in the strategic planning process.© BrainMass Inc. brainmass.com October 17, 2018, 12:33 pm ad1c9bdddf
3M is one of the most diversified companies in the world. It produces thousands of products which are a result of science and are sold across all four continents. 3M is currently organized into six business units; Consumer and Office, Display and Graphics, Electro and Communications, Health Care, Industrial and Transportation, and Safety, Security and Protection Services. Some of its commercially successful products include Post-it Notes, Scotch-Brite ...
Solution includes a detailed explanation of the reasons behind why an organization would diversify her business.
Strategy Formulation - Based on the 3M Company founder's quotations
Please see attached file for full problem description.
1. Based on the 3M Company founder's quotations in the Lecture, which of the 3 basic Generic Strategies (name one) do you think best fits 3M Company. Explain your reasoning showing the relationship to at least one quote.
2. Give an example of how your strategic plan company's Grand Strategy (pick the one most appropriate from the ones in the text) is complemented by one or more internal strengths in the company. (I have added information from the text here: also remember my company for my strategic plan is Microsoft)
(While the need for firms to develop generic strategies remains an unresolved debate, designers
of planning systems agree about the critical role of grand strategies. Grand strategies,
often called master or business strategies, provide basic direction for strategic actions.
They are the basis of coordinated and sustained efforts directed toward achieving long-term
The purpose of this section is twofold: (1) to list, describe, and discuss 15 grand strategies
that strategic managers should consider and (2) to present approaches to the selection
of an optimal grand strategy from the available alternatives.
Grand strategies indicate the time period over which long-range objectives are to be
achieved. Thus, a grand strategy can be defined as a comprehensive general approach that
guides a firm's major actions.
The 15 principal grand strategies are: concentrated growth, market development, product
development, innovation, horizontal integration, vertical integration, concentric diversification,
conglomerate diversification, turnaround, divestiture, liquidation, bankruptcy,
joint ventures, strategic alliances, and consortia. Any one of these strategies could serve as
the basis for achieving the major long-term objectives of a single firm. But a firm involved
with multiple industries, businesses, product lines, or customer groups?as many firms
are?usually combines several grand strategies. For clarity, however, each of the principal
grand strategies is described independently in this section, with examples to indicate some
of its relative strengths and weaknesses.)
3. In the following short story a high-end pet supply store used a Focused Differentiation strategy but failed. Discuss the core strengths that are critical to make this type of strategy work assuming adequate market size?
A high-end pet supply store followed a generic strategy of "Focused Differentiation"?catering to upscale pet owners who wanted to pamper their pets. Unfortunately, this demographic proved to be too small in the retail area she was drawing from to support her business. So, in desperation, she resorted to price-cutting to try to drum up business. However, if customers wanted to shop based on price alone, they would have gone either to Wal-Mart (which could sell even cheaper than she could?and make a profit at that level!) or online. Customers who did come to the store just for the cheap items did not convert into long term customers because they were seeking low cost, not differentiation. This spelled "DISASTER" for the store, and it ended up bankrupt within three years of opening.