Like most companies that are a part of the Dow Jones Industrial Average, 3M is a conglomerate. Formerly known as Minnesota Mining and Manufacturing Company, the company was added to the DJIA on August 9, 1976.
They make a wide range of products including adhesives, fire protection, car care products and hundreds of other categories covering thousands of products.
Without a doubt, their huge portfolio of products and patents are a huge strength for 3M. They continue to develop new products and continue innovations at a great rate. In 2009, they were awarded on average, more than one patent per day. In addition, while being so diverse, they don't depend on any one area for a significant percentage of their revenues. This helps them as a company, get through any downturns that will happen to various units.
Just as having so many products and patents are a strength, it is a huge weakness as well. They have to spend a significant amount of time and money, looking for trademark infringers and dealing with those that they encounter. Plus, they can't rest on their laurels, and must keep investing in R&D. R&D is not cheap, but is necessary in good and bad economic times.
Continuing to build on their product lines by innovating and expanding where they sell their products continue to provide ongoing opportunities. Along those lines, they have great opportunities by buying firms that will enhance their product offerings, expand their categorical offerings and keep the company fresh.
Major threats continue to be generic knockoffs or counterfeit products being developed by other companies. This costs time and money not only fighting these companies and products, but they also lose out on sales for their products. In addition, material costs for products continue to vary widely. This can be mitigated by obtaining long term contracts with suppliers which lock in price and as a result, bring consistency to their pricing.
Overall, the company is doing well. They must continue to innovate and avoid complacency that can set in, especially with a large company. Due to their diverse nature, it helps the company as a whole avoid major troubles whenever a particular unit faces a downturn.
Tuesday, February 21, 2012
Monday, February 20, 2012
A fun new project
Over the next four to six weeks, I am going to be rolling out an analysis of major companies.
I plan to start with the Dow component companies, since most people who would read this would be familiar with most, if not all of those companies.
I will be using publicly available information, my own personal experiences with the company (when available) and my own business experience in developing an analysis of these companies.
Think of it as a SWOT analysis (strengths, weaknesses, opportunities and threats). There will be a lot of constructive criticism and praise where needed. No mudslinging either, unless it is absolutely warranted.
Enjoy!
I plan to start with the Dow component companies, since most people who would read this would be familiar with most, if not all of those companies.
I will be using publicly available information, my own personal experiences with the company (when available) and my own business experience in developing an analysis of these companies.
Think of it as a SWOT analysis (strengths, weaknesses, opportunities and threats). There will be a lot of constructive criticism and praise where needed. No mudslinging either, unless it is absolutely warranted.
Enjoy!
Friday, February 10, 2012
The problem with Super PACs, and what to do about them
I don't think anyone knows what the full ramifications of the Citizens United decision will be on this year's Presidential election.
In the just over two years since the decision by the Supreme Court, we have not had a full election cycle to digest what would happen as a result of that decision. The 2010 federal election cycle was well underway, so while there were far more consequences for the general election, as opposed to the primaries.
But we are beginning to see what is happening and what may happen before the general election this November. Mitt Romney was the beneficiary of heavy Super PAC spending before the Florida primary, in his defeat of Newt Gingrich. The Koch Brothers and friends have indicated they will spend up to $100 million just to defeat Barack Obama in the fall, and his main opponent isn't even known yet! More recent, Obama himself has announced his support for his Super PAC allies to get to work.
There is no way that anyone who donates a significant amount of money is not going to be expecting something in return. Even though the candidates are not allowed to coordinate their efforts with the various Super PACs, anyone who believes that isn't happening, needs to pull their head out of the sand. Obama and Co. may be putting forward that their campaign is all about the small donors like you and I, but he is going to get far more money in support from the Super PACs.
Quid pro quo will obviously be in play for whoever wins in November. Most of it will come in the forms of favorable executive orders, or more discretely, favorable legislation that gets through Congress.
I don't think Super PACs will go away any time soon, at least until another Watergate happens (and trust me, it will happen at some point). So what to do about them until that point?
The only viable thing I see at this point is sunshine. Something needs to be done to force donors to be made public quickly. Announcements on various Super PAC's websites as soon as they receive money from whoever makes the donations. In advertising, large donors names need to be a prominent part of the advertisement. Any other ways to make donors public quick and very visible is good. It helps show who is trying to buy the election.
Getting rid of all of the money that flows into politics will probably never go away. But as I mentioned above, nothing of significant change will happen until some new Watergate happens. Watergate will happen someday, if it is not already happening now.
In the just over two years since the decision by the Supreme Court, we have not had a full election cycle to digest what would happen as a result of that decision. The 2010 federal election cycle was well underway, so while there were far more consequences for the general election, as opposed to the primaries.
But we are beginning to see what is happening and what may happen before the general election this November. Mitt Romney was the beneficiary of heavy Super PAC spending before the Florida primary, in his defeat of Newt Gingrich. The Koch Brothers and friends have indicated they will spend up to $100 million just to defeat Barack Obama in the fall, and his main opponent isn't even known yet! More recent, Obama himself has announced his support for his Super PAC allies to get to work.
There is no way that anyone who donates a significant amount of money is not going to be expecting something in return. Even though the candidates are not allowed to coordinate their efforts with the various Super PACs, anyone who believes that isn't happening, needs to pull their head out of the sand. Obama and Co. may be putting forward that their campaign is all about the small donors like you and I, but he is going to get far more money in support from the Super PACs.
Quid pro quo will obviously be in play for whoever wins in November. Most of it will come in the forms of favorable executive orders, or more discretely, favorable legislation that gets through Congress.
I don't think Super PACs will go away any time soon, at least until another Watergate happens (and trust me, it will happen at some point). So what to do about them until that point?
The only viable thing I see at this point is sunshine. Something needs to be done to force donors to be made public quickly. Announcements on various Super PAC's websites as soon as they receive money from whoever makes the donations. In advertising, large donors names need to be a prominent part of the advertisement. Any other ways to make donors public quick and very visible is good. It helps show who is trying to buy the election.
Getting rid of all of the money that flows into politics will probably never go away. But as I mentioned above, nothing of significant change will happen until some new Watergate happens. Watergate will happen someday, if it is not already happening now.
Thursday, February 9, 2012
It just keeps getting worse for Kodak
Kodak announced this morning that they were completely getting out of the digital business. It seemed like they exited this arena many years ago, but they made the move official today.
Sure, there will still be Kodak cameras available for sale, they are just licensing their name to other companies.
I owned a Kodak digital camera for a couple of years, and it worked pretty well for me. But the problem, was that they didn't do anything to differentiate themselves from every other company that was churning out digital cameras. Sure they had a boatload of patents, but as a casual end user, most other companies' products worked just fine for me.
But Kodak's complacency over the past 30 or 40 years has crushed them, and it has finally caught up to them. This is not unique among large companies and in fact, is a problem that most large companies have - but more on that in future articles.
Kodak will continue to get smaller while they try to figure out how to reinvent themselves and become relevant again. Sure, they can focus on photo printing, but printing will continue to be just a shell of what it once was, even just a decade ago. If Kodak ever hopes to make themselves great again, they will need to not only eventually shift back to digital, but become a leader in that area.
Kodak did not get into their current position overnight, and it will take a long time to get back on top. By acting nimbly and smart, they can reinvent themselves and become a major company once again.
Sure, there will still be Kodak cameras available for sale, they are just licensing their name to other companies.
I owned a Kodak digital camera for a couple of years, and it worked pretty well for me. But the problem, was that they didn't do anything to differentiate themselves from every other company that was churning out digital cameras. Sure they had a boatload of patents, but as a casual end user, most other companies' products worked just fine for me.
But Kodak's complacency over the past 30 or 40 years has crushed them, and it has finally caught up to them. This is not unique among large companies and in fact, is a problem that most large companies have - but more on that in future articles.
Kodak will continue to get smaller while they try to figure out how to reinvent themselves and become relevant again. Sure, they can focus on photo printing, but printing will continue to be just a shell of what it once was, even just a decade ago. If Kodak ever hopes to make themselves great again, they will need to not only eventually shift back to digital, but become a leader in that area.
Kodak did not get into their current position overnight, and it will take a long time to get back on top. By acting nimbly and smart, they can reinvent themselves and become a major company once again.
Wednesday, February 8, 2012
Come on Apple!
You can do better than this.
Reports from the New York Times have shown awful work conditions at Foxconn, one of Apple's major suppliers in China.
Apple is sitting on $100 billion. Just sitting there. Collecting nothing but interest.
While they sit around and think about what to do with it, perhaps they can invest 0.001 percent in upgrading their supply chain. $100 million could go a long way to fixing these problems.
Firstly, it is impossible to know what the agreement is like between Foxconn and Apple. But I am sure there are some provisions within the contract that mentions working conditions. If not, Apple has all of the leverage in the world to make those changes immediately.
Look, I have no problem with Apple outsourcing their work to China or wherever they choose to do so to maximize their business opportunities. But the public relations hit that Apple is taking is not going to be worth it in the long run, unless they make some sweeping changes.
They can immediately fire Foxconn and go with other suppliers in China or some other location. This would be the most dramatic change and likely erase the negative press they are getting. Obviously there are huge logistical challenges with this, especially with significant supply chain disruptions, but they may be able to pull it off.
What they will probably do is force Foxconn to make changes to how they treat their employees. It will likely cost Apple money in increased enforcement of working conditions and wages, but it would just be the right thing to do.
The company won't miss the money, they can make the lives of thousands of workers better and improve their image with customers and potential customers around the world. Step up Apple. Do the right thing.
Reports from the New York Times have shown awful work conditions at Foxconn, one of Apple's major suppliers in China.
Apple is sitting on $100 billion. Just sitting there. Collecting nothing but interest.
While they sit around and think about what to do with it, perhaps they can invest 0.001 percent in upgrading their supply chain. $100 million could go a long way to fixing these problems.
Firstly, it is impossible to know what the agreement is like between Foxconn and Apple. But I am sure there are some provisions within the contract that mentions working conditions. If not, Apple has all of the leverage in the world to make those changes immediately.
Look, I have no problem with Apple outsourcing their work to China or wherever they choose to do so to maximize their business opportunities. But the public relations hit that Apple is taking is not going to be worth it in the long run, unless they make some sweeping changes.
They can immediately fire Foxconn and go with other suppliers in China or some other location. This would be the most dramatic change and likely erase the negative press they are getting. Obviously there are huge logistical challenges with this, especially with significant supply chain disruptions, but they may be able to pull it off.
What they will probably do is force Foxconn to make changes to how they treat their employees. It will likely cost Apple money in increased enforcement of working conditions and wages, but it would just be the right thing to do.
The company won't miss the money, they can make the lives of thousands of workers better and improve their image with customers and potential customers around the world. Step up Apple. Do the right thing.
Oh Groupon
It was announced earlier this afternoon that Groupon had lost $42.7 million dollars in their first quarter as a public company.
Among many reasons, it didn't help that they had an effective tax rate of nearly 1600 percent. Sure that is due to various rates due to expansion expenses in various locations across the globe. But they will need to bring that down significantly in the near future.
However, I foresee a lot of problems going forward for Groupon.
For those that do not know, Groupon and a whole host of other companies (Living Social is most prominent), customers sign up to receive emails regarding specials for various businesses in their area. In most cases, it is for at least 50 percent off of products and services.
It is great for the customer, especially if there are offers that appeal to them on a regular basis. It can be good for a business to increase foot traffic or move product.
But many businesses just lose out when it comes to these types of products. Here is one story and there are hundreds more just like this.
When I had my business, representatives from Living Social dropped by on a regular basis wanting me to run deals, especially towards the end. I was already getting my ass kicked. I didn't need to take a greater beating.
I tried to get the reps to give me solid scenarios where I would actually be able to break even. They couldn't do it. The closest was for them where the customer would pay $10 for $20 worth of product, excluding liquor.
From there, Living Social would take 50 percent, or $5. Then they had all of these other ancillary and processing fees, that would end up yielding me around $2.70. I would take a loss no matter how much alcohol I could move. My costs were not around 15 percent. I never had a chance of breaking even, let alone making a profit. Groupon is very similar in nature.
If they are to ever achieve long term success, they will have to change their business model to attract and retain more businesses. Far too many have been chased off after losing too much money, time and reputation from experiences gone bad. If there are no businesses using Groupon and the like, there will be no customers.
Groupon needs to listen to more to their former customers like what I linked to above. If not, this type of business will go the way of pets.com.
Among many reasons, it didn't help that they had an effective tax rate of nearly 1600 percent. Sure that is due to various rates due to expansion expenses in various locations across the globe. But they will need to bring that down significantly in the near future.
However, I foresee a lot of problems going forward for Groupon.
For those that do not know, Groupon and a whole host of other companies (Living Social is most prominent), customers sign up to receive emails regarding specials for various businesses in their area. In most cases, it is for at least 50 percent off of products and services.
It is great for the customer, especially if there are offers that appeal to them on a regular basis. It can be good for a business to increase foot traffic or move product.
But many businesses just lose out when it comes to these types of products. Here is one story and there are hundreds more just like this.
When I had my business, representatives from Living Social dropped by on a regular basis wanting me to run deals, especially towards the end. I was already getting my ass kicked. I didn't need to take a greater beating.
I tried to get the reps to give me solid scenarios where I would actually be able to break even. They couldn't do it. The closest was for them where the customer would pay $10 for $20 worth of product, excluding liquor.
From there, Living Social would take 50 percent, or $5. Then they had all of these other ancillary and processing fees, that would end up yielding me around $2.70. I would take a loss no matter how much alcohol I could move. My costs were not around 15 percent. I never had a chance of breaking even, let alone making a profit. Groupon is very similar in nature.
If they are to ever achieve long term success, they will have to change their business model to attract and retain more businesses. Far too many have been chased off after losing too much money, time and reputation from experiences gone bad. If there are no businesses using Groupon and the like, there will be no customers.
Groupon needs to listen to more to their former customers like what I linked to above. If not, this type of business will go the way of pets.com.
Tuesday, February 7, 2012
Panic in Greece...Ahhhhhh!
Worries about the Greece economy put pressures on stocks today.
Tell me how many times you have heard about that. Then tell me how many times that has actually made you worried.
For me, I don't even blink. I think that has been mentioned two or three times per week, every week, for the past 18 months or so. Yet the U.S. stock market is near its all time highs. Sure there are troubles economically in Greece, but there is no need to freak out.
Greece did not get into their economic troubles overnight. They will not get out of their trouble overnight. It will take time, perhaps longer than 'analysts' want, but eventually Greece will get their problems straightened out.
There is no need for the average person to follow every single thing that happens with the Greece economy. Sure, if you conduct business in Greece or have other financial interests, definitely stay in tune with what happens. Otherwise, keep a casual eye on what goes on there.
Business writers need to have something to write about. Every minor thing that could possibly happen in the long road to recovery will send someone into a panic. Trust me, there is no need for panic - everything will work out for the positive in the end.
Tell me how many times you have heard about that. Then tell me how many times that has actually made you worried.
For me, I don't even blink. I think that has been mentioned two or three times per week, every week, for the past 18 months or so. Yet the U.S. stock market is near its all time highs. Sure there are troubles economically in Greece, but there is no need to freak out.
Greece did not get into their economic troubles overnight. They will not get out of their trouble overnight. It will take time, perhaps longer than 'analysts' want, but eventually Greece will get their problems straightened out.
There is no need for the average person to follow every single thing that happens with the Greece economy. Sure, if you conduct business in Greece or have other financial interests, definitely stay in tune with what happens. Otherwise, keep a casual eye on what goes on there.
Business writers need to have something to write about. Every minor thing that could possibly happen in the long road to recovery will send someone into a panic. Trust me, there is no need for panic - everything will work out for the positive in the end.
Monday, February 6, 2012
Why I am writing what I am writing about
I was miserable.
I spent several years working for a giant corporation and I was nothing but a number. I did not like what I was doing and foolishly didn't think there was a good way out or to improve my situation.
So, that lead to a mistake. A big one. I bought what I thought was a good business, but it lead to me being bankrupt at the age of 28. And without a job.
As a result, I am going to try and find my way hopefully doing something I enjoy. This is a good start.
I plan on writing about several things. Politics, economics and globalization will be the main focus. I will also write about my experiences in the professional and political worlds that will give some credence to what I am saying.
Why am I qualified to write about these topics? I grew up in a middle class family outside of a 'Rust Belt' city. I ended up obtaining a Bachelors degree and M.B.A. from a Big 10 school. I've worked for a Dow component company. I had an internship for another through a small company. I've not only worked for a small company, I've owned my own small company. I ran for public office twice, and won twice.
Needless to say, I have done a lot and experienced a lot. I want to put that to good use. I will say things that go against the conventional wisdom and will probably be controversial at times. But there is no use in trying to hide my thoughts or censor myself for no good reason. Enjoy what you read. Hopefully you will learn something. I would love to hear your thoughts.
I spent several years working for a giant corporation and I was nothing but a number. I did not like what I was doing and foolishly didn't think there was a good way out or to improve my situation.
So, that lead to a mistake. A big one. I bought what I thought was a good business, but it lead to me being bankrupt at the age of 28. And without a job.
As a result, I am going to try and find my way hopefully doing something I enjoy. This is a good start.
I plan on writing about several things. Politics, economics and globalization will be the main focus. I will also write about my experiences in the professional and political worlds that will give some credence to what I am saying.
Why am I qualified to write about these topics? I grew up in a middle class family outside of a 'Rust Belt' city. I ended up obtaining a Bachelors degree and M.B.A. from a Big 10 school. I've worked for a Dow component company. I had an internship for another through a small company. I've not only worked for a small company, I've owned my own small company. I ran for public office twice, and won twice.
Needless to say, I have done a lot and experienced a lot. I want to put that to good use. I will say things that go against the conventional wisdom and will probably be controversial at times. But there is no use in trying to hide my thoughts or censor myself for no good reason. Enjoy what you read. Hopefully you will learn something. I would love to hear your thoughts.
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