Economic Industry Analysis and Competition at 3M
The economic analysis of an industry is crucial in the development of the business strategies that are to be used. Before championing appropriate measures ideal for yielding the sustainability of the day-to-day operations, it is necessary to establish the causal factors and assess the variations of the profit margins (Gugler, Weichselbaumer, & Zulehner, 2015). In this perspective, some of the core factors under consideration are the bargaining power of suppliers and buyers, the threat posed by the substitute products, and the overall rivalry in the industry (Grant, 2016). The competition faced by an entity solely depends on the economic structure of the environment of the business establishment. In addition, it is also necessary to take into account particular behavior of the competitors. This paper will conduct a financial industry analysis and competition of 3M.
3M attracts many suppliers what effectively results in the competition among them; thus, the prices are lowered, to the benefit of the organization. The customers often have limited choices to make as a result of the quality services accorded by 3M. As such, they tend to pay up the prices levied on various products to meet the standards set. The entity counteracts the effects of the industry rivalry by lowering the storage costs for the consumers. The competitors, therefore, experience a diminished risk in the simultaneous unloading of inventory (3M science applied to life, n.d). There is a limited number of substitute products, reducing the chance of the customers getting better offers to meet their expectations and eventually switch allegiances. Some of the significant competitors of 3M are Johnson & Johnson, Bostik SA, and Sika AG. The robust quality product offering and fair pricing of the organization make it suited to thwart the effect of competition.
Conclusively, ideal business planning determines the success of 3M. A complete understanding of the business environment has always been crucial in anticipating the activities of the competitors. Therefore, success has been inevitable.
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