3M's strategic focus on three "key levers" last year helped the diversified manufacturer achieve record sales and income for both 2014 and the fourth quarter while also positioning the company well in 2015.
As President and CEO Inge Thulin outlined during an earnings call with analysts, 3M targeted three business priorities in 2014: portfolio management, investment in innovation and business transformation.
Since 2012, Thulin said, 3M has realigned its portfolio from six sectors to five business groups and from 40 businesses to 27, an important streamlining measure that enhanced profitability for the St. Paul, MN-based company.
"In 2014, we combined businesses within three of our business groups, electronics and energy, safety and graphics, and industrial," Thulin said. "All in, we invested $19 million in 2014 in portfolio actions to position us for greater future success."
As for the second business lever, investing in innovation, Thulin told analysts that "research and development is the heartbeat of our company. In 2014, we invested $1.8 billion in research and development. The strings of our innovation engine helped drive organic growth of nearly 5 percent in the year. 3M also earned more than 3,000 patents in 2014. In our history, we have now earned more than 100,000 patents globally."
And the company last year also laid out plans for implementing a global ERP system, which will "create a more ideal and efficient 3M, and allow us to better serve customers around the world," Thulin said.
3M's threefold plan has the company poised for increased organic growth as well as additional M&A activity, with Thulin saying the acquisition "pipeline is robust and we are working at it constantly."
