3 M Individual Case Financial Analyses Case Study Solution & Analysis
Introduction
3 M Individual Case Financial Analyses Case Study Analysis is a widely known worldwide brand in technology market, established in 1938 by Lee Byung Chul, in South Korea. 3 M Individual Case Financial Analyses deals in a great deal of item categories consisting of Semiconductors, Telecommunications, Digital Media, Digital Appliances and many more other electronic products. Historically, the business's core customers consist of the Original Equipment Manufacturers (OEMs), which used to sell Company items withtheir own brand. Till early 1990s, the core proficiency of Business depend on its low cost offerings than its rivals by manufacturing existing products at economies of scale. Its consumer circle includes Original Equipment Manufacturers (OEMs), who utilized to sell 3 M Individual Case Financial Analyses Case Study Analysis products with their own trademark name. Organization was not merely understood outside Korea. There were also no or little interest in building the brand name internationally. Marketing budget was managed by production department with a prime focus on offering low-cost products.During the 1997 Asian Financial Crisis the business practically got bankrupt, however with the Vision of Chairman Lee it totally turn its fortune around and in 2002 was listed the leading 25 most valuable business on the planet. When Kim was worked with as a Chief Marketing Officer in 2000 the company was not even noted. He repositioned Enterprise as an international brand name and educated his divisional managers to understand marketing and its importance. Now their objective is to arrive 10 by 2005.
Issue Declaration
Corporation's transition from a product based to a marketing company is not going as efficiently as planned.Overcoming the hesitation of divisional supervisors to include marketing effectively is still a significant obstacle. Creating a constant brand identity across the entire world and employing marketing strategies that best fits the regional culture is no easy job. The M-net program analysis have actually been actually helpful in figuring out the high and less potential growth areas, however allocation of resources accordingly is not well received amongst the managers. There is no consensus among the hierarchy relating to the best matched future technique.
Situational Analysis
3 M Individual Case Financial Analyses Case Study Analysis efforts for constructing its trademark name throughout the world was begun after introducing the "new management initiative" by Chairman Lee in 1993. The objective was to transform Organization from an inexpensive OEM to a high value-added item company. To make the vision of Venture a reality, Chairman Lee appointed Yun as a vice chairman in 1997. Yun had a quite clear picture in his mind about how Organization can transform from a low end to a luxury item provider. He knew that transformation can just be done through placing Corporation as a business providing high-end items and this might just be done through high level of marketing.
In spite of having a clear vision about how to construct Company brand name, with a prospective assistance of its executives, Yun faced numerous marketing obstacles in early years of its efforts.
One of the marketing challenges for Yun was the understandings of executives about the value of marketing. They thought about marketing and selling as same tools and believed that quality items do not required marketing for increasing sales. As their focus towards marketing was rather low in their previous organisation practices, and the existing marketing requirement was excessive high, the space was too larger and to fill this gap with wrong perceptions about marketing was rather challenging for Yun.
As stated above, marketing focus was really low in previous practices, therefore there were no correct marketing budgets for each of the product on the portfolio. There was no marketing preparation provided for the existing items. Together with it the item range of the business was increasing with the ripening of brand-new item ideas by the R&D sector of Organization. Yun had an obstacle to carry out marketing preparation and to create marketing budget plans for existing along with for new items from the very beginning, and this would take a substantial time.
A substantial shift would be required in current marketing expenditures to develop the Enterprise brand. This would result in increased marketing expenses for Corporation and might interrupt the administration concerning increased expenditures, as they were reluctant to marketing expenses formerly and a sudden big shiftwould make them interrupt.
Internal Analysis
SWOT Analysis
Strengths
3 M Individual Case Financial Analyses Case Study Solution strengths lie in its huge product portfolio. Company has largest number of patents in the industry with total number of 15499 patents approved in US( USP).
Another strength of 3 M Individual Case Financial Analyses Case Study Analysis is its ability to develop ingenious items at a continuous rate. It significant proves for the innovation and item creating of Corporation is that the business has actually received numerous awards for its development and item style.
Unlike Apple and other rivals, Org is concentrated on producing gadgets which can be easily incorporated with any kind of open source Os (OS) and software. This supplies Org an edge over Apple gadgets.
Corp's capability to produce luxury items at low cost of production is also among the significant strength of Enterprise as it enables the business to capture more market by providing quality items with expense control.
Weak points
Business's weaknesses are hidden in the company's reliance on outsourcing software for its devices due to business's failure in developing software, unlike Sony. 3 M Individual Case Financial Analyses Case Study Help also has low profit margins as compare to Apple due to substantial difference in the rates of Apple and Corporation with a much lesser difference in quality.
Opportunities
Opportunities for 3 M Individual Case Financial Analyses Case Study Analysis lie in the growing Smartphone market and the business's efficiency in the market. Organization presently runs in about 80 nations and the business has a chance to increase its geographical expansion by moving towards more emerging markets outside Asia.
Risks
The dynamic market environment of technology industry posture an extreme hazard on Venture's survival and force the company to invest much of its revenues share on R&D in order to endure in the long run. The market saturation in developed countries i.e. saturation of mobile company is likewise a big danger for the company's development in the presence of strong competitors like Apple.
4 P's of Marketing
Product
Corporation offers quality items and has a quite rich portfolio which caters to various segments. LCD and mobile phones are the most significant products of Enterprise, whereas DRAM is also not far behind in contrast of them.
• LCD/ TELEVISION
• Laptops.
• Smart phone.
• Air conditioner.
• Personal computers.
• Hard drives.
• Washer.
• Refrigerators.
• Video cameras.
• Microwaves.
• Flash memory.
• DRAM.
Rate.
3 M Individual Case Financial Analyses Case Study Help utilizes both market competitive and market skimming prices methods for its wide array of items. In competitive prices it adjusts the rate according to the competition in order to acquire advantage, whereas, it utilizes market skimming technique where the product has an added worth and by offering a couple of items it can reach break-even.
Location.
It has among the best supply chain networks, with retail distributors, their own sole suppliers, E commerce channels like Amazon etc. All its items are prompt provided to the selling location/ delivered to the consumers straight in case of online order.
Promo.
It uses both offline & online channels of promo to market their products. Paid item ads, social promotion and digital ads are uses to produce awareness about Enterprise products.
Worth Chain Analysis.
It's an analytical structure for determining company activities that add value or competitive advantage for the company.
Incoming Logistics.
It has among the most effective and efficient supply chain network and has more than 2700 suppliers throughout various markets all over the world. Nearly 80% of which is based in Asia and the remaining all over the world. For its inbound logistics it owns various logistics firms as it subsidiaries. It cares for its providers and produces an unified relationship with them and even minimized their payment cycles to improve this relationship further which adds value to their chain network.
Operations.
Business's core competency is its mass producing it produces 90% of its items internal. Divided into 3 various divisions its operations are namely IT & Mobile Communications, Gadget Solutions and Consumer Electronics. It is maintaining operation hubs worldwide to further include value to its value chain network.
Outbound Logistics.
Its outbound logistics system efficiency is among the primary factors 3 M Individual Case Financial Analyses Case Study Help has the ability to take on Apple. Organization's own Electronic Logitec system plays a major function in the outgoing logistics operations. It even performs the jobs of collection of payment, settling insurance claims, etc. on behalf of Company.
Marketing and Sales.
Attracting target client attention towards the product is done through marketing and sales to communicate with them the worth and competitive benefit the product uses. 3 M Individual Case Financial Analyses Case Study Analysis marketing budget plan is constantly rising considering that they began their rearranging internationally and will continue to do so as they are continuously aiming to expand and invest in high potential growth markets. The spending plan is invested in events, print and media advertisements, public relations etc.
Organization Service. Organization put their customers at the top and constantly aim to provide unmatchable customer care requirements. As after sales service is becoming incredibly essential to keep customers happy and engaged, they even conduct surveys through third parties to learn their customer's feedback and execute it in the positive method to lower or if possible completely remove their customer concerns. By adding a direct assistance line to call them 24 hr they have even more increased the added worth of 3 M Individual Case Financial Analyses Case Study Help service.
Division.
3 M Individual Case Financial Analyses Case Study Help has diversified market segmentation, based upon its arrangement of wide range of products to a great deal of consumers. Enterprise target customer segments can be divided into 3 categories i.e. 3 M Individual Case Financial Analyses Case Study Analysis IT and Mobile Communications, Enterprise Consumer Electronics and Corp Device options.
Geographic.
3 M Individual Case Financial Analyses Case Study Help geographical division is based upon 2 criteria i.e. area and density. Enterprise serves about 80 nations worldwide with its items supplied to Urban along with Rural areas of the country. The Business is also growing its global presence and the company's flexibility in locating its plants motivates global expansion of Business.
Demographic.
Business produces items that can be used by both males and women. The target clients for Corporation IT and mobile communication products have an age variety of 18-65 with bulk at a young or freshly wed life cycle stage. Apart from it, Business Consumer Electronic devices are targeted to a client sector with an age range of 25-65.
Psychographic.
The psychographic segmentation of 3 M Individual Case Financial Analyses Case Study Help s based upon the social class and the lifestyle of the consumer. Venture target customers on the basis of social class are mainly upper middle, middle and working class consumers, as Corp sell items like cellular phone very little less expensive i.e. Motorola in addition to not much pricey i.e. Apple. It supplies quality products to middle level customers at a somewhat high rate than others targeting the very same segment.
Behavioural.
3 M Individual Case Financial Analyses Case Study Analysis bulk target consumers have distinct behavioural characteristics. They are attracted towards Organization since of its moderate rates with a degree of quality.
Quantitative analysis.
Sales of Enterprise has actually increased astonishingly from 16 billion $ in 1997 to 44.6 billion $ in 2002, and the net revenue of.48 billion $ to 5.9 billion $. It has actually also lowered its debt from 15 billion $ to 4.6 billion $. Digital media is the biggest selling classification of Corp with sales of 13.9 billion $, whereas, Telecommunication and Semiconductors sectors both reached 11 billion $ in sales. Since of the high overhead expense, profits/ sales are increasing but net revenue is not increasing appropriately. New expansions and employing's were the primary reason of the increase in the overhead expenses, with china presently not providing any revenue to Business, however there is so much potential in the present market with 75 % yet to be explored.
Qualitative analysis.
Whereas, the core strength of the business is presently manufacturing but long gone are those days when excellent products were selling themselves. Kim has actually already started to reinforce the marketing activities of Venture and very soon it will end up being one of its core strength like making if not better.
VRIO.
Worth.
Enterprise runs styles, manufactures and offer a large portfolio of customer electronic devices. It operates in an extremely competitive environment and has effectively positioned itself as the maker of quality items. So, the response is yes.
Rarity.
As, stated earlier that 3 M Individual Case Financial Analyses Case Study Solution runs in a highly competitive environment, which indicates all the companies have comparable products. So, the answer for rarity is no.
Imitability.
Due to the nature of the market, it is very simple for competitors to understand the functionality of the products and quickly make their own models. Yes, Organization is only behind IBM in registering new patents annually, however the advantage is extremely short term in this industry.
Organization.
Chairman Lee has totally turn-around Org, from going nearly bankrupt throughout the Asian monetary crisis of 1997 to the top 25 business on the planet. Certainly yes there is proper organization in the company and the results promote themselves.
External Environmental Analysis
PESTLE Analysis
Political
Being a multinational brand name spread almost in every country worldwide, bulk of the environments like U.S.A., Europe, China and so on, are extremely conductive for its operations. Nevertheless, it deals with some political pressures in less developed countries where law and order situation is bad. Latin American, African and some Asian nations fall in this classification, where political instability do have an effect on 3 M Individual Case Financial Analyses Case Study Analysis operations.
Economic
Buying power of clients is vital for business like Org to be successful and grow. Emerging markets like India, middle-eastern countries etc. provide growth chances, whereas, due to recession even the customers of industrialized countries suffer severely. It is extremely essential for the company to keep an eye on the ongoing economic scenario of the country prior to going into the market.
Socio-Cultural
Multinational business have to deal with various social and cultural problems during its operations in a foreign nation. Enterprise has actually likewise dealt with many issues however have adopted to the local environments of the majority of the nations exceptionally well. It has actually customized its items, practices, policies etc. accordingly in order to achieve success.
Technological
With an annual expense of 2.4 billion dollars in Research study & Advancement, and with constant innovative item launches, 3 M Individual Case Financial Analyses Case Study Help is among the top ingenious business of the world. With a clear objective to be ahead of the rest when it pertains to technological improvements, Organization has actually increased to the no 25 of the top successful business of the world.
Legal
Each country has their own laws and policies, being an international business Org need to strictly follow those laws in their jurisdictions. Failure to do so, will lead to severe legal effects. It has to study or hire a local law expert before beginning its operations in a particular country.
Environmental
With the rising awareness amongst customers about the ethical & ecological infractions of companies, Company has to make sure that it follows all the safety guidelines. Ecological damages, ethical misconducts are not acceptable and in some countries the effects can be very serious. On the other hand it needs to do some Corporate Social Obligation practices to show the residents that it cares about their environment and individuals.
Porter's Five Forces
Danger of Alternative
Hazard of alternative for Business's each item classification is quite substantial. Aspects for high danger of substitution for 3 M Individual Case Financial Analyses Case Study Analysis Smart device consist of the existence of high number of providers and Market saturation in developed countries, which make the expense of switching for customers nearly no. Along with it, Organization printing options products are threatened by the increasing destination of clients towards cloud storage.
Competition Amongst Existing Companies:
The rivaly among Organization and its close rivals is intense. The significant factor behind this is the technique of market saturation in numerous number of item categories, forcing Organization to introduce more ingenious functions in existing items and brand-new ingenious products to keep its growth. The major competitors for 3 M Individual Case Financial Analyses Case Study Help samrtphones consist of Apple, Motorola, LG, Nokia, Huawei, OPPO and so on.
3 M Individual Case Financial Analyses Case Study Analysis has a vast supply chain including about 2700 providers throughout the world.( Corporation Sustainability Report, 2016) Supplier's bargaining power for Enterprise is low as Enterprise runs economies of scale and its orders are of prospective size and worth. These big orders allow Organization to work out costs with its suppliers. However, due to incapability of 3 M Individual Case Financial Analyses Case Study Help to build its own software application, it needs to outsource its software application development to Google, which becomes a potential provider of software application for Corp, resulting in high bargaining power of Google. Although, in the majority of cases Org has a power to negotiate rates, but it supply considerable rates to its suppliers to build a strong supply chain and to have strong relationships with its providers.
Bargaining Power of Purchasers:
Market saturation in many of the product categories also make the bargaining power of buyers more intense in for Corp. In spite of igh bargaining power Venture is rather capable of offering its products at a higher rate than much of its competitors, due to high end quality item and a reasonable brand image.
Danger of New Entrants:
Risk of brand-new entrants for 3 M Individual Case Financial Analyses Case Study Analysis is rather low. Along with it, requirement of big proficiency and research and advancement expenses for survival in the market likewise make new entrants reluctant to enter in the market. Market saturation is also one of the barrier of entry in innovation industry.
Competitive Analysis
Company's high item diversity supplies it distinction from its rivals. Unlikely to its close rivals including Sony, Intel and Nokia, who focus majority on a single product classification with Sony focusing on customer electronics, Nokia on cell phones and Intel on chips, 3 M Individual Case Financial Analyses Case Study Help had a big R&D costs on all of its item classifications which enable the business to make prospective revenue from sales of almost all of its products.
The company ranks first in 4 item categories i.e. DRAM Chips, LCD Displays, Cinema TVs and Microwave, in regards to global market share, amongst 8 different product categories. Organization was the international leader in producing DRAM, SRAM and NAND flash chips. Although, Company profits from chips was less than Intel but its revenues from chips was growing faster than Intel and has actually grown close to the earnings levels of Intel, as given in the case Exhibit 2.
In addition to the chips Business mobile market was likewise flourishing at a high rate than its competitors i.e. Motorola and Nokia. Enterprise's mobile phone's sales development was 51% as compare to Motorola with just 4% and Nokia with zero sales development. The significant reson behind Corp's high development despite of higher prices than Nokia and Motorola was the company's high-end quality mobile phone.
Venture was also reaping the benefits from increasing market share of high-end LCDs as given up case Exhibition 3. The significant reason, making the company make it possible for to get the opportunity is its mass production at low expense. Sony was the biggest rival for 3 M Individual Case Financial Analyses Case Study Help in LCD market, nevertheless, it had actually likewise begun joint venture with Corp in 2003 for LCD producing, minimizing the competition for Venture.
Porter's Competitive Method
Low Cost Management method of porter is totally executed by Org the method they attain economies of scale by enhancing their core proficiencies of manufacturing. They always bring something innovative and new whether it's a product or a service.
Alternatives
Alternative Option 1
The Chief Marketing Officer (CMO) of 3 M Individual Case Financial Analyses Case Study Solution would create a new brand image by targeting the more youthful generation of the particular country. As, especially cellphones of Organization are very popular among the more youthful group.
Pros
1. It is the very best method to develop Consumer Lifetime Worth (CLV) by creating a long-lasting relationship with clients. Construct commitment through providing value and reap the benefits for long-term, as research has actually revealed it is much cheaper to keep present customers than to bring in new ones.
2. Another pro of this option is that word of mouth spread faster amongst more youthful people and which in turn will bring in new customers for my products.
Cons
1. Old customers who were related to Business prior to may not like this new image the business is trying to represent.
2 It will sustain more costs to rearrange some items and it may not even bring success as the trends change extremely quickly amongst the more youthful market.
Alternative solution 2.
Org has made making its core competency for the most part of their organisation and due to which its supervisors are not scared to totally step out of their comfort zone. It would be done by arranging training workshops throughout which significance of marketing will be taught and numbers will be offered. Failure to get the passing ratings will get demoted. Marketing environment need to be produced internally first as real marketing starts inside the corporation.
Pros
1. Its pro will be that all the marketing method supporters will come out and likewise the opposite ones.
Cons
2. Its con can produce an extremely unhealthy environment in the office, as individuals typically withstand modification because they fear it.
Determine the very best option
First option is the very best as it plainly has more pros because once a Consumer Life time Worth is developed the company will profit from it till that consumer lives and has purchasing power also. Plus, our target clients are the younger generation which are bound to live longer than the current aging individuals. However, Org's main objective is to produce loyalty among its clients and make them repurchase it from them and even purchase their different products too.
Execution Plan
• Targeting more youthful generation through social marketing, developing a link with them like Pepsi finish with music. And set the expectations realistic and achievable.
• A team consisting of best marketing and sales specialists ought to be assemble, and both views ought to be taken into account prior to securing the resources required to execute the strategy.
• Thorough communication of the strategy ought to be done as it is extremely essential for everybody to be on the same page to make it work.
• Jobs and timelines need to be build and communicated appropriately to each individual accountable.
• The supervisor need to use a dashboard which shows the progress of all the jobs which have been done or about to be done and by whom.
• The manager must keep an eye on and keep a constant check on the total and specific performance.
Because any new pattern or policy might come in due to which all the things currently prepared have actually to be adjusted, • Everyone need to be willing to adjust midway. It's better to have contingency plans already prepared.
• At the end of the project the supervisor must communicate the results and if successful must celebrate with the team.
Budget plan
This modification the budget plan allocation of lots of supervisors and different nations were unhappy and argued however the analysis done by the program was precise and showed figures like North America and Russia growth prospective warranted a 35% allowance while they were getting 45%. It actually helped to fairly disperse the resources and capture more consumers by spending more on advertisements on the high growth potential areas of the world.
Conclusion
Its consistent investment in R&D and innovative practices have propelled them to new heights however for them its' just the start and they desire to be among the top 3 brands in the world. Their marketing efforts ought to be directed towards more youthful market amid the internal arguments about marketing and ought to produce Customer Lifetime Worth as it will not just provide them advantages now however will continue to gain it till the consumer lifetime. As the cost of keeping the consumer is much more affordable than bring in a new one.
