The 3M Corporation is an American multinational conglomerate company specializing in the industry, workplace welfare, health care, and consumer goods in the United States. The 3M company manufactures more than 60,000 3M brand products under different brands, including adhesives, abrasives, laminates, passive fire prevention, personal protective devices, window films, paint protection films, dental and orthodontic products.
What is 3M exactly?
Thirty-six yards of 3M adhesive tape costs merely a handful of bucks. Although a roll or two is on hand for most of us, it is not an everyday staple. Yet, as of May 15, 2020, 3M Co. (MMM), the company manufacturing Scotch Tape, had a $79.8 billion market value. Are 3M abrasives that big of a business? The response is yes when combined with hundreds of other companies under one roof.
Better Understanding about 3M
Per year, 3M achieves billions from the selling of goods through five separate market divisions. In more than a decade of history, throughout all of these markets and others, all 3M locations have been one of the world’s largest miscellaneous goods manufacturers. The business sells its goods directly to clients as well as through a host of wholesalers, dealers, and distributors. In order to continue to strengthen and expand its product lines, it also spends extensively on research and development (R&D). In 2019, the company paid more than $3.6 billion in R&D and capital investments.
By citing corundum, a mineral that is one step below diamond on the Mohs Hardness Scale, the Minnesota Mining and Manufacturing Corporation got its start in the early 20th century. 3M has grown beyond corundum these days to the extent where it offers a product portfolio more varied than just about any industrial conglomerate on the market. 3M science displays stable financials that are reliable.
3M’s Model of Business
3M brand creates an almost incomprehensible 55,000 objects beyond Scotch Tape (and the more contemporary, but equally innovative, Post-It Note). The corporation groups these diverse functions into four major business segments: Protection and Industrial, Transport and Electronics, Healthcare, and Consumer Business.
Healthcare Sector of 3M
3M’s Healthcare sector involves identifiable products, such as surgical drapes and teeth whiteners, unlike Transportation and Electronics. Yet 3M also runs the gamut, particularly in an area as specialized as healthcare. From coding tools and metered-dose inhalers to stethoscopes and personal-use pieces, healthcare devices contain everything. “Invisible” teeth braces, skin soaps, and antiseptic foam are included in the last category. In 2019, healthcare accounted for 23% of 3M’s overall net profits.
The production of 3M N95 masks and their certification happened in 1972. 3M face masks use was suggested during the COVID-19 pandemic to be able to filter viral particles, but the supply quickly became short. Prior to the epidemic, all of the company’s stock had already been sold.
The shortages led to the US government ordering 3M distributors to stop selling US-made N95 respirator masks to Canada and Latin America, and President Donald Trump used the Defense Procurement Act to compel 3M to give priority to federal government orders. When 3M decided to import more respirators, mainly from its factories in China, the conflict was settled.
3M later signed a $70MCAD contract with Canada’s federal government and Ontario’s provincial government to manufacture N95 masks at their Brockville, Ontario factory.
Consumer Business of 3M
Unsurprisingly, 3M use workplace materials in Consumer-Electronics Components. This is in addition to other items that you do not identify with the 3M name but is likely to use in daily use, such as filters for air conditioners, bandages, sponges, shower pads, and many of the insulation merchandise that line snow boots and winter coats. 3M creates household swabs that assess lead levels and stainless steel skirtings, which are less conspicuous but similarly important. Despite its stature, the smallest of 3M’s divisions is market activities. In 2019, the consumer market accounted for approximately 16 percent of the group’s overall net revenue.
3M’s Electronics and Transport
The real genius of 3M brand is bringing value to goods made elsewhere that are already marketable. Instead of manufacturing computer displays, the glare filters that protect them are made by 3M’s transport and electronics industry. 3M supplies the modular circuits that are within the cartridges for inkjet printer cartridges. Much of 3M’s transportation and energy goods are well away from regular market use, from electric cables to pressure-sensitive resins. However, as of July 2019, 3M is the largest corporation for pressure-sensitive tape in the United States, and the company supplies goods for over 25 percent of the American industry. For 2019, this division accounted for 30 percent of the overall net revenues of the company.
Safety and Commercial Business of 3M
The practices of 3M are healthy, and the commercial sector dwarfs all the other divisions. Partly since there are so many of them, it isn’t easy to come up with a representative list of 3M’s industrial offerings. Spacers for membrane switches? Manufacturers with foam? The 3M brand makes it. The former is a layer that goes onto, say, the aerobic machines’ keypads at your gym between other levels. The latter is utilized to make gaskets and insulation for soundproofing. There are products that most of us take for granted but which are marvels of engineering.
You will not find products under 3M’s safety activities. You will still find changes that make products practical, such as the reflective sheeting on road signs or the roofing granules that keep your house’s interior insulated. In 2019, 3M’s protection and the industrial sector accounted for 36% of 3M’s overall net profits.
Big goals for the future growth and competition
3M brand has begun on a large-scale reshuffling of its corporate model in recent years, going from 40 different business lines to 23. In 2018, in an attempt to further streamline, the company sold off its Consumer-Electronics Components. Investors should expect 3M to continue to make changes in the future along these same lines. 3M has financial targets until 2023, including an 8 to 11 percent rise in earnings per share and 3 to 5 percent organic growth in revenue.