3m Corporation Case Study

...

The area in which 3M wanted to innovate by doing a New Product Development was in Medical-Surgical Market Division.

Opportunity identification

The need to generate a new product in the Medical-Surgical division of 3M was because of the management dicta that charged Rita with a mandate to develop a breakthrough product with the existing business strategy.

Product Innovation Charter at 3M

Back ground:

- 3M – Company known for its innovation.

- The growth of the product is now stagnating, no new innovation happening for the last decade.

- The strategy adopted to resolve this problem is Lead User Research Methodology.

- Surgical drapes had penetrated only into the niche segment. There was a limited market growth because of the high cost of the 3M products when converted to local currencies.

- The business unit has gone almost a decade with only one successful product.

- They were focusing only on the surface infections ignoring other infections.

Focus:

- Market dimension: Growing markets were discovered in the developing countries where the infectious diseases were still the major killers however due to in expensive labour in these countries 3M realised they should not over engineer their products for these markets.

- Technological dimension: There was a need for highly technological product to reduce infections that could be designed by 3M with their highly skilled technical team.

Goals-Objectives:

- To come up with a breakthrough product in medical surgical market division.

- These opportunities can be enchased by building on the R&D skills and by concentrating in the reduction of production and labor cost, so that the product can be made available at the lower cost in emerging markets.

- The company is willing to invest funds, as necessary, to achieve these technological breakthroughs. The company’s long term goal is to have a double digit annual growth. The company also intends to boost the global presence of the MSMD division.

Guidelines:

- Considering that the company is first to market, they should incorporate a proprietary 3M technology with patent protection.

- To understand the customer needs and develop innovative products with respect to it

- Use the existing product of the mature market in the developing countries with required amendments to provide quality at an affordable price

- To keep up to the international quality standards and company’s image

- To provide the products in the market within one year to reach the customer on time, satisfying the timely need.

- The company should have an absolute minimum time of less than year of the economy product.

Concept Generation

The next phase in the new product development would be concept generation. For this phase the ‘lead user methodology’ was used which was subdivided into the under given phases:-

- Project planning – Lasted 4-6 weeks to identify the type of markets, new product of interest and new products of innovation.

- Trend needs/Identification- Lasted 5-6 weeks, to select specific need related trend, to focus upon the remainder of the study.

- Preliminary concept generation- Lasted 5-6 weeks, Lead user group acquired a more precise understanding of market needs in the selected areas of focus. The teams began to generate preliminary concepts involving ideal attributes and features that would best meet customer needs.

- Final concept generation – Lasted 5- 6 weeks, Lead user team takes preliminary concepts developed in stage three towards completion and also seek to ensure that all possible solutions have been explored. This stage centres on a workshop with invited lead users.

In the final sessions the invitees came out with numerous product concepts and the group met as a whole to rate and prioritize all concepts on the basis of commercial appeal and technical feasibility.

Concept Evaluation

The next phase would be concept evaluation phase which was done under the following conditions:-

- Customer preference.

- Creation of new growth for division.

- Boosted global presence of division.

- Higher growth through the rest of 3M through as much as possible.

Out of the six recommendation for new product development, the following are the Lead User team’s recommendation for the MSMD:-

- The “Economy” Line.

- The” Skin Doctor” Line.

- Antimicrobial “armor” Line.

Finally, it was the fourth recommendation that divided the team and formed the basis for a long heated discussion.

But, the fourth recommendation was that which was finally decided upon as the medical Community still groped with for ways to prevent infectious diseases. No health care company has stepped in to take leadership in the early area of intervention in the disease process. Thus a vacuum existed in which 3M could find a new growth area.

SWOT ANALYSIS

Strengths

- Innovation - 3M is known for its innovation. It encourage innovation through a variety of means including awards for innovation as well as in-house grants for innovative projects.

- Huge workforce - Employed 75,000 people workers, of whom 36,000 were outside the United States. Most of them were engineers, scientists and technicians.

- Dedicated technicians - 3M technicians began bypassing purchasing agents in order to better understand product needs. Often, they walked into factories and workplaces and talked directly to workers.

- Investment in R&D - 3M