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Changellenge                 3M                     StubbornsAnna Putrya  Dmitry Markus  Oleg Gusev  Tatiana Pavlova
Stubborns                               Changellenge    MIPT (2011)                                     MIPT (2007)    ...
Outline•   Objective•   Strategy•   Implementation•   Risks
Objective Reach more than 50% growth rate in the firsttwo years and 25% in the following years Marketing budget amounts ...
High competition on the C&R market      may slow 3M growth unless it takes immediate actions• High quality, price         ...
Key challenges for 3M in the short-run are in the marketing and                    sales parts of value chain Manufac-    ...
Construction and Repair Department                  CommercialPrivate housing                  Industries   Government    ...
Private housing segment                    Commercial Private housing                     Industries      Government      ...
Residential construction segment                      CommercialPrivate housing                                   Industri...
Industrial segment                  CommercialPrivate housing                          Industries           Government    ...
Segment of the government                      Residential Private housing                      Industries       Governmen...
Marketing Summary• Target audience: large industrial clients and government• Key changes: become more flexible in terms of...
Sales force and Distributors across Russia          25%                                               2%                  ...
Volga region shows a great potential for 3M electric business                        expansionInvestments in capital asset...
Further penetration into 3M strongest regions• In 3M strongest regions the company has not exhausted its  potential yet, h...
Expansion of distribution channelsNegotiate contracts with cable manufacturers to cross-sell 3M productsvia their distribu...
Sales Summary            25%                                                 2%                        15%     30%        ...
3M should concentrate on developing efficient training and                    marketing programs                          ...
Time schedule for people hiring                                                      2011                                 ...
Risks and their mitigationsRisk                               Impact   MitigationOperational risks (delays on             ...
Conclusion• Target industrial clients and government• Consider more flexible contracts, introduce sales on credit• Hire ad...
Stubborns                               Changellenge    MIPT (2011)                                     MIPT (2007)    ...
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Stubborns

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Stubborns

  1. 1. Changellenge 3M StubbornsAnna Putrya  Dmitry Markus  Oleg Gusev  Tatiana Pavlova
  2. 2. Stubborns Changellenge  MIPT (2011)  MIPT (2007)  NES (2011)  UC Berkeley (2009)  NES (2011)  MIPT (2011)  MIPT (2011)  NES (2011)MIPT – Moscow Institute of Physics and Technology NES – New Economic School
  3. 3. Outline• Objective• Strategy• Implementation• Risks
  4. 4. Objective Reach more than 50% growth rate in the firsttwo years and 25% in the following years Marketing budget amounts to 2% of sales
  5. 5. High competition on the C&R market may slow 3M growth unless it takes immediate actions• High quality, price Customers• High brand awareness • Low price Western C&R market Russian/ Chinese companies $100mln, 10% growth companies3M Strengths Weaknesses • 10% of the market • Low brand awareness • Grows 3-4 times faster • Innovative • Wide range of products • High quality
  6. 6. Key challenges for 3M in the short-run are in the marketing and sales parts of value chain Manufac- Logistics Marketing Sales turing • Marketing: poor brand awareness • Sales: limited human resources and distribution channels
  7. 7. Construction and Repair Department CommercialPrivate housing Industries Government construction 10% 90%
  8. 8. Private housing segment Commercial Private housing Industries Government construction• This segment of customers is looking for affordability, while 3M is a premium product• Each of the clients makes low-volume purchases• Low brand awareness This segment is not very perspective to target in the short run
  9. 9. Residential construction segment CommercialPrivate housing Industries Government construction Contractor Project Buyer Institute Result• Buyer is interested in the quality of the final result• Contractor is looking for low price materials, satisfying the criteria Under obsolete quality standards 3M is unable to target commercial construction segment in the short run
  10. 10. Industrial segment CommercialPrivate housing Industries Government construction Literature, publications Aware Internet advertising, convenient internet site Seminars, conferences with the overview of Trust successful projects, emphasis on the quality Flexibility – sales in credit, option of renegotiation, direct contracts with large customers Affordability – attractive prices Wider range of products and services Buy Services, maintenance, implementation, consulting, large capacities
  11. 11. Segment of the government Residential Private housing Industries Government construction• Cross-selling: participation in the National Projects with other departments of 3M involved in (ACCR, infrastructure etc.)• Participate in the municipal construction, emphasizing high fire safety of the products• Lobby the introduction of strict quality standards in the long run
  12. 12. Marketing Summary• Target audience: large industrial clients and government• Key changes: become more flexible in terms of contracts• Emphasis: complex solutions, feedbacks from clients
  13. 13. Sales force and Distributors across Russia 25% 2% 15% 30% 20%4% 4% Strong regions are exactly those with sales specialists
  14. 14. Volga region shows a great potential for 3M electric business expansionInvestments in capital asset* Residential construction** Central Others Central Others 23% 27% 26% 35% Ural Siberia 16% Volga South 12% South 20% 11% Volga 15% 15% 3M should hire a business developer in this region * December,2009, ** set in operation, March, 2010
  15. 15. Further penetration into 3M strongest regions• In 3M strongest regions the company has not exhausted its potential yet, hiring additional sales specialists there could substantially increase sales.• Increased demand should be balanced via increased number of distribution channels as well as via their efficiency• New compensation and bonus schemes for distributors: emphasis on high-marginal products
  16. 16. Expansion of distribution channelsNegotiate contracts with cable manufacturers to cross-sell 3M productsvia their distribution channels Client 1 Cable Client 2 manufacturer 1 3M Client 3 Cable Client 4 manufacturer 2• Cable manufacturers have clients interested in the products of 3M• 3M could adapt its technical solutions for each cable manufacturer under long-term contract
  17. 17. Sales Summary 25% 2% 15% 30% 20% 4% 4%• Penetrate further : increase the number of sales specialists and distributors in strong regions• Cover new areas: create sales force in Volga region
  18. 18. 3M should concentrate on developing efficient training and marketing programs 2011 April MayInitial meetingSet up PM teamDevelop project planDevelop training programDevelop marketing program
  19. 19. Time schedule for people hiring 2011 June July Aug Sep Oct Nov DecHiring SS in Central, VolgaTraining processHiring SS in Ural, Siberia, N-WTraining processMarketing Campaign
  20. 20. Risks and their mitigationsRisk Impact MitigationOperational risks (delays on Keep enough items in warehouses.custom, logistics problems etc.)Government regulation (tariffs, Build facility in Russiaimport limits) Contracts in foreign (dollars) currency,Exchange rate currency futuresCredit risk Give credits to the reliable clients
  21. 21. Conclusion• Target industrial clients and government• Consider more flexible contracts, introduce sales on credit• Hire additional sale specialist in strong 3M regions• Increase distribution channels as well as their efficiency
  22. 22. Stubborns Changellenge  MIPT (2011)  MIPT (2007)  NES (2011)  UC Berkeley (2009)  NES (2011)  MIPT (2011)  MIPT (2011)  NES (2011)MIPT – Moscow Institute of Physics and Technology NES – New Economic School

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