The paper “ The Opportunities and Challenges That 3M’ s Industrial Business Division Faces from Changing the Customer Focus from OEM to MRO” is a convincing variant of assignment on marketing. 3M Company founded in 1902 had significantly grown by becoming a global enterprise with over 69,000 employees located in about 60 countries. The aim of the business was to manufacture mineral deposits. The company decided to change its investment priorities, for example, it moved from aiming at meeting production increase and cost-saving and set its focus on developing its market and increasing promotions for its products.
Arikan (2008) describes that this strategy involves the incorporation of various elements such as growing the entire business, aiming at developing business opportunities, being involved in acquisitions and finally increases in investment especially in the emerging markets. Rosenbloom (2004) describes that in order to achieve the above goals, the company would use certain guidelines which include selling its products to large markets as well as having a relative position the smaller markets. According to Baker and Hart (2008) customization of products and management of customer, retention would be another way of achieving the growth of the business.
In this, IBD gets an opportunity of driving scale and increased market share which is more at MRO. The reason for this is that MRO has a bigger market, especially in Canada. The other opportunity that IBD acquirers by using MRO are that large distributors are growing faster in the market as compared to the rate of MRO growth. There are also vacant spaces in various product lines showing that IBD will have a competitive position in the market by filling the vacant places.
Private labeling also contributes to a better opportunity for IBD in improving its revenue and profit margins. Some of the opportunities that 3M’ s IDB face include being the second largest in sales in Canada and that it sold its products to customers. IDB had two major customer groups which include original equipment manufacturers (OEMs) and maintenance, repair and over haulers (MROs). The two customer groups were different in their way of sale, for example, OEM concentrated on selling high-value items and mostly they were finished products while MRO was selling low-value products which were mostly consumables.
IBD had concentrated on distributing to the OEM segment and its growth had stated deteriorating since the segment had reached its maturity stage and therefore expansion would be difficult. MRO segment, on the other hand, was fragmented and there was a lack of brand loyalty though it was significantly growing. IBD came to the conclusion that the two major ways of attaining its target would be to find new customers for the present products and the other method would be to introduce new products to the market which will be aimed at targeting new customers in the market.
Other opportunities included improved technology platforms and have potential growth. One of the faced by changing customer focus from OEM to MRO was that IBD would get additional sales within the targeted time frame. This means that the time taken in delivering products from the manufacturer to the customer will be shortened. This is because IDB had been distributing to retailers and not concentrating on the customers.