Thou Shalt not kill an idea!

Group 8 Mia Osawa - 114566 Mikko M. Pesonen - 115324 Shreeya Shakya 114397

OUTLINE

3M Inside Story

Established 1902 in Minn. USA

William L. McKnight, hired in 1907 aged 20

Was a near FAILURE but founders PERSISTED.

TRANSFORMED 3M into one of the MOST INNOVATIVE companies

PRODUCT PORTFOLIO
CONSUMER Electronics HEALTHCARE

& Energy

INDUSTRIAL SAFETY & GRAPHICS

50,000+ Products through ORGANIC growth and ACQUISITIONS

UNDERLYING TECHNOLOGY

. 8,200 researchers worldwide; 4,100 in the United States

INNOVATION Principles

If you put fences around

people, you get sheep. Give people the room they need. William McKnight, 3M

INNOVATION FRAMEWORK
Heavy R n D Investment : increase RnD
spending to 6% by 2017 from 5.3% in 2011

15 per cent Rule promoted corporate

culture of freedom and innovation

New metric New Product Vitality Index To measure sales from product

3M Technology Forum encouraged

innovators network, interact and share their knowledgeand problems

Patents to protect intellectual property High Customer Interaction

RnD Spending

Culture

Helped to identify users Problems

Decentralized and Organic

Structure Genesis Grant Program - $50K to support innovative products Incentives Carlton Society highest recognition for Risk Taking Culture encouraged by Valuable employee Company principle and informal long Golden Step Award sales reaching $5m term employment contract Alpha Grants innovation in non-technical front

INNOVATION

GLOBAL REACH

70+ Countries
85 Laboratories 35+ business units

GLOBAL REACH
ORGANIZATION STRUCTURE
Matrix structure fosters collaboration across different subsidiaries

Knowledge transfer
Knowledge transfer through expatriate assignment, KM tool and Open communication channels

autonomy
Allowed subsidiaries to initiate local product development Tailored to meet local needs

ACNE Dressing story 3M taiwan analysis

ACNE DRESSING Brief Story

ACNE PRODUCT DEVELOPMENT

Technology Base: Hydrocolloid Dressing = Health care product for hospitals, drugstores.
Step 3: 3M, NPD & NPIS Step 2: wound treatment

Step 1: accidental innovation Through research From a camping trip

To an Acne treatment product

NPIS and ACNE DRESSING Analysis

POST LAUNCH

LAUNCH

SCALE-UP
Technical & Financial aspects, Target market

DEVELOPMENT

FEASIBILITY
CONCEPT IDEA

Product / sales potential

From wound recovery to Acne treatment

Accidental Innovation

Taiwan Potential in Asia Pacific

3rd RnD center after Minnesota and Japan (Shanghai, 2005)
Heavy investments from HQ (early 2000s onwards) Impressive sales

TAIWAN: STRENGTH AND WEAKNESSES

3M Taiwan Analysis
WEAKNESS
+ Location: gateway to East Asia, 3M already present in the market since 1969, important and growing market + 3M collaboration with Taiwanese government + Taiwanese Silicon Valley ++ Very innovative subsidiary ++ Infrastructure in place ++ Competent task force ++ Familiar with local NPD + + Prior work experience with HQ No prior experience in healthcare product development Chung (responsible for Acne development) not experienced with NPD

Cost of production uncertain No global market knowledge

3M Taiwan Dilemma
TO GO OR NOT TO GO?

Challenges of NPD Launch strategies Our recommendations

Challenges of the New Product Launch

TRANSACTION COSTS
Production costs on how to make affordable product High Switching cost for users

LACK OF KNOWLEDGE

Leadership with no experience No market knowledge, Demand Uncertainty

LACK OF RESOURCES

No technology experience No system in place for NPD for healthcare technology No benchmark data available

Possible Strategies for Taiwan

Local responsiveness Cost reduction pressures
Low High
Taiwan STRENGTH
> Innovative Culture > Proper infrastructure in place > Prior experience in local product development in other technologies > Prior experience working with HQ > Good Local Market Potential

Global strategy

Transnational strategy Multidomestic strategy

High

International strategy

Low

Taiwan WEAKNESS
> Leadership inexperienced in NPD > Inexperienced in healthcare NPD > Cost of production uncertain > No Global market knowledge 19

The corporate strategy defines the R&D requirements of the company Each subsidiary has substantial autonomy and control of critical business activities

Strategy for RnD in Taiwan

Approach to managing Global R&D
Less centralised Regional market More centralised

Primary focus

Autonomous regional R&D centre

Network of regional R&D centre with support of HQ

Technology

Autonomous technology R&D centre

Network of technology R&D centre with HQ coordination

Each R&D centre performs regional innovation and all centres work together on projects of common interest Utilisation of resources of the network and support from HQ

NPD Launch Management Putting it all Together

Challenges
Solution

Integration

Knowledge
Technical Managerial

Information platform Expatriate system Regional networks Incentive schemes

Communication

Resources
Technology Systems Benchmarking Cost

Resource sharing

Thank You! QnA