3M

3M Co. on Thursday said fourth-quarter net income jumped 74%, but shares fell as the company said it faces price pressure in its business of optical films for improving the performance of LCD screens.


Looking across its many industrial businesses at 3M's prospects for 2010, company executives told analysts that they don't expect much positive news in residential housing, commercial construction or the automotive business but that consumer markets are expected to grow "slightly."

I'm sure most of you are extremely familiar with this friend of yours, named 3M am I right? They are famous for the provision of adhesives, where else can you get your Scotch Tape? Also, they are famous for the Post-It notes as well. You stick them all over the place so you better remember 3M for that!

And how can we ever forget the Probation Plate that all first year drivers have to place in their car before they drive off during the first year?


A little background information for you guys on 3M.

3M is actually a company notoriously famous for the diversification of its products. It has a total of 50,000 products and they are still diversifying with a introduction rate of 100 new products per year. However, they stick very closely to their strength and source of energy which is the bonding and chemical technology. No matter what they produce, it is always related to the above mentioned technology.


The company said on a conference call with analysts that its film business within its Display and Graphics unit has drawn strong interest from makers of LCD screens because it improves energy efficiency by more than 30%.

Everyone is concerned about saving of energy now! That is why 3M is extremely shrewd, they know how to move with the flow of the market. They know that LCD screens now are extremely competitive with competition on the thickness of the screen and the quality of the colours displayed.


Also, with the introduction of the movie "Avatar", 3D has been brought to an all new high level. This movie has triggered the move to bring 3D into video games and television shows. Recently, the Argentina's soccer match has been premiered in 3D over 9 lucky countries and the results is tremendously successful.


In no time, people will be moving into 3D even as they are watching their favourite Ellen Degeneres show or their favourite HD movies at home during a Saturday night. Hence, more people will be buying great television sets to help them better visualize the 3D effects and this is the best opportunity for 3M to reap alot of profits too.

So, 3M's move into the film business for the LCD screens is the most apposite move you can find right now! They always diversify consistently and they move out of an industry once competitors start to catch up. This way, they will move out with no losses and that they can enter new business where the cycle starts all over again. Money just keeps falling into their pockets!



However, customers "continue to drive price reductions, and we will need to respond with continued aggressive cost reduction and productivity in order to fund needed new products," he added.


Price competition is always notoriously famous in the industry where products are priced at a low cost. Cost leadership is extremely crucial in this industry so 3M has no choice but to capitulate at times.

However, bear in mind that their cost cutting is not to thrive and compete in the industry. They look at the bigger picture, their aim is to reap enough money until it is saturated whereby any more cost reduction will term their profits as being insignificant. Then, they will use all the money and reinvest them into the new products and they start working again!


That's the beauty of 3M.


Gorgeous isn't it?


Credits -marketwatch, -conference, -tinypic, -cnet, -kssupplies, -techdigest, -planet