2. Growing Global Healthcare Industry
“ Growth in the healthcare industry is
driven by an increase in aging
population, public health insurance
initiatives, and movement towards
improving living standards.
Most of the growth in the healthcare sector
is expected to come from developing
countries…
Due to emergence of a strong middle class
with increasing disposable incomes and the
overall development of manufacturing
and infrastructural capabilities and a shift
toward higher living standards.”
Background Strategy
Potential
Risks
Opportunities Future of 3M Appendix
Forbes Investing, “Why we 3M is worth $140”
$-
$100,000,000.00
$200,000,000.00
$300,000,000.00
$400,000,000.00
$500,000,000.00
$600,000,000.00
2010 2015 2020 2025 2030
3M Annual Sales Growth
3. 3M Healthcare SWOT Analysis
Strengths
• Innovation
• Collaboration
• Customer service
• Skilled workforce
Weaknesses
• Current distribution network
• Inventory turnover rate
• Demand forecasts
Opportunities
• Global growth in healthcare industry
• Capitalizing on growth in developing
countries
• Increase market share
Threats
• Global Competition
• Economic and political factors
• Low visibility in foreign markets
SWOT
Background Strategy
Potential
Risks
Opportunities Future of 3M Appendix
4. Problem Statement and Implementation Recommendations
The global healthcare industry is growing in both foreign and domestic markets.
3M must decide to build, expand, or continue current manufacturing processes to
capitalize on increasing profit margins and overall market share while also
mitigating fiscal and distribution pressures.
We propose that 3M
implements the following
strategy, which includes
continuing the current
manufacturing process in
Germany and adding
additional equipment in
Ohio and India to meet the
growing demand.
Background Strategy
Potential
Risks
Opportunities Future of 3M Appendix
Expand 3M building in India
Add additional machinery in India
Add additional machinery in Ohio
5. Goals and Objectives of Strategy
01
02
03
Goals and Objectives
Expand 3M facility
in India
Add additional
machinery in India
Add additional
machinery in Ohio
• Increase inventory
turns to 5.5 in 5 years
• Improve customer
service to 96% on
time
• Optimize net income
Background Strategy
Potential
Risks
Opportunities Future of 3M Appendix
6. 5 Year Timeline
Background Strategy
Potential
Risks
Opportunities Future of 3M Appendix
2016 2017 2018 2019 2020 2021
Ohio Packaging
India Expansion
India Packaging
India Coating
India Sterilization
7. Expanding Indian Manufacturing Site
Background Strategy
Potential
Risks
Opportunities Future of 3M Appendix
2015 2016 2017 2018 2019 2020
Annual Cash Inflow: $0.00 ($10,400,000.00) $6,200,000.00 $1,800,000.00 $2,400,000.00 $14,286,000.00
Cumulative Cash Inflow: $0.00 ($10,400,000.00) ($4,200,000.00) ($2,400,000.00) $0.00 $14,286,000.00
Payback Period: 4 Years
Optimize
• Capitalizing on high profit margins in developing markets
Innovate
• Improve current process with Western technology
8. Expanding North American Manufacturing Site
Background Strategy
Potential
Risks
Opportunities Future of 3M Appendix
2015 2016 2017 2018 2019 2020
Annual Cash Inflow: $0.00 ($10,900,000.00) $3,600,000.00 $5,400,000.00 $7,200,000.00 $9,000,000.00
Cumulative Cash Inflow: $0.00 ($10,900,000.00) ($7,300,000.00) ($1,900,000.00) $5,300,000.00 $14,300,000.00
Payback Period: 3 Years
Optimize
• Leverage existing facility to meet the needs of North and Latin America
to avoid exponential capital investment
Innovate
• Creative way to absorb growing demand in Latin American
9. Potential Implementation Risks
Background Strategy
Potential
Risks
Opportunities Future of 3M Appendix
Democratic growth
Allied with US
NAFTA
Subsidized healthcare
Political
Tax benefits
Growing markets in
developing countries
Highest profit margin
Largest volume of sales
Lower expansion costs
Economic
Growing population and
large population density
Increase visibility
Existing manufacturing site
Access to growing demand
in Latin America
Geographical
India India India
Ohio Ohio Ohio
11. The Future of 3M
Background Strategy
Potential
Risks
Opportunities Future of 3M Appendix
Improving the quality of life in
developing countries through
innovating processes and emphasizing:
Social Responsibility
Environmental Stewardship
Economic Success
13. Increasing Inventory Turnover
Implementation Costs
Higher than Expected Sales
Lower than Expected Sales
Payback
Revenue and Units Sold
Costs and Per Unit Costs
Current Ohio Process
Future Ohio Process
Germany Process
Current India Process
Future India Process
Contents
