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Porter's five force model of 3M...

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3M Porter’s Five Force Analysis

Name-Vanssh Jain Register Number-2110813 Class-2BCom SFH Department of Commerce Submitted to- Prof Subin Nair

Introduction 3M is a well-known company in the Industrial goods industry. They rank 96 in the fortune 500 company’s list and currently have a market cap of 95 billion dollars. 3M is a diversified global company that manufactures a wide range of products, such as adhesives, building materials, insulation, lubricants, tools, medical supplies, electronics components, cleaning supplies, and office supplies. Industries of 3M 1. Safety and Industrial 2. Transportation and Electronics 3. Health Care 4. Consumer

Five force analysis 1. Threat of new entrants: 

The economies of scale are needed to be very competitive in order to succeed in this sector and 3M’s economies of scale is quite efficient.

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The capital required to enter into this sector is high as this industry requires a lot of investment in machinery and R&D

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Therefore, the threat of new entrants is low

2. Threat of Substitutes: 

Because 3M has invested in product innovation, it is able to create new and innovative items for the market. It may be difficult for competitors to imitate them.

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In their sub industries of the local retailers have an edge over 3M as they can provide more focused products according to consumer needs.

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Therefore, the threat of substitutes is medium

3. Bargaining power of buyers: 

Because of the customers’ price sensitivity and an expectation of very innovative products which are difficult to imitate. But 3M is focused on innovation in order to meet its customers’ expectations.

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Therefore, the bargaining power of buyers is medium

4. Bargaining power of suppliers: 

The size of suppliers in the industrials sector of 3M is quite large and the price is similar for almost every supplier due to little differentiation in their raw material.

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Since the size is large, the competition is also very high which offers 3M with lower prices.

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Since there are large no. of suppliers there is no reliance on just one supplier

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Therefore, the bargaining power of suppliers is low

5. Rivalry amongst existing competitors: 

The intensity of rivalry in the main industry of 3M which is safety and industrials is low as they are very diversified and have also invested heavily in its R&D,so their products are highly differentiated .

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The intensity of Rivalry in their other industries like transportation and electronics is high with competitors like General Electric, Emerson Electric etc.

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Therefore, the intensity of rivalry is medium...