Financial Analysis of 3M

1876 Words Feb 5th, 2018 7 Pages
The first issue before all others is to clarify what is meant by 12-15% organic growth is that revenues or profits? That's rather important to know.
After that has been settled, there are several issues that 3M needs to address. The first is the company's small share of MRO business. The industry only has a about a dozen players, and 3M does not have a major presence with any of them While 3M has products it can sell through this channel, it has long ignored the channel because of structural issues such as lack of control and lack of brand loyalty. This market, however, is currently experiencing the sort of double-digit growth that 3M is pursuing with its new mandate. Therefore, the company has to figure out how best to approach this market, in order to gain access to what looks like a fairly valuable channel.
The second issue that needs to be addressed is the decline in competitiveness in low margin businesses like most of the OEM lines. The dip in the CAD in the late-1990s/early 2000s was actually out of line with historical norms, so if the company thought that was a "new normal", such a view was very much mistaken. Now that the dollar has regained some strength, it is worth considering that the days of the 65-cent loonie are gone forever. The loonie is a petrocurrency, and the US is dependent on foreign oil. That fundamental fact alone means that as oil prices continue their long-term upward trend, the loonie will go higher and stay higher. This affects the ability…

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