Case Study: Industrial Business Division (IBD)
| ← Pepsico E-Business Analysis | Business Environment Assignment → |
One of the greatest line of focus for any given business organization is the customer focus. Customers are the ultimate gateway to the success of the business since they steer forward the other sectors of the business such as production and marketing as they bring in the final input and profits which is the main goal of the business operation. This paper will evaluate and analyze the different aspects and strategies associated with 3M’s Industrial Business Division changing the customer focus from OEM to MRO.
The first question that comes into place when analyzing the relevance of changing business strategies is that of availability of opportunities and challenges. One of biggest opportunity that goes along with MRO is the vast market opportunity that this customer focus may be open to which gives the company the optimum chance to expand its operations which will allow the adoption of high tech technology platforms which consequently leads to other diversified marketing strategies such as outsourcing production and exclusive supplier expansion.
However, one of the biggest challenges that might prove a hurdle for Industrial Business Division (IBD) is the fact that the company has exposure to only a few segments of MRO. Apparently, IBD needs to be connected with the major distributer stores in the region which will open up the market for the products to the customers. The big challenge is the strategy that IBD will engage so as to make strong business bond with these large distributers termed as ‘growth drivers’ and without shifting the entire company resources to the distribution sector and operation costs.
All the operations regarding sales of the IBD have always been relationship-driven. The initiative to change the customer focus from original equipment manufacturers (OEM) to Maintenance, repair and Overhaulers (MROs) will necessitate the company to change its sales relationship with the new found customers, i.e. with the MROs. For along time, IBD has adopted the person to person interaction sales model and it has proved to work out well with the OEM strategy. However, new development comes in with new approaches.
With the integration of MRO as the customer focus strategy, the sales relationship will definitely differ from the traditional person to person interaction. IBD’s sales model will have to change to the provision of a single face to the customer as opposed to approaching and interacting personally with very customer. With this, the company will analyze all the products that it offers in the market and come up with a generalized description of all the products which the various customers will evaluate and make decisions on there own. This has been so due to the fact that the customer base with the MROs is quite big and will go on expanding thus the need for a more comprehensive and generalized form of sales model. This sales model which aims at providing a single face to the customer is also expected to bring the complete line potential products and technologies that 3M offers to the market has also been perceived as an instrumental initiative which grants an effective sales stimulus to the company customers.
Furthermore to this change, the IBD management has established an effective manifesto that is supposed to see the sales of the company go global mainly through national distributers. The main idea beyond reaching and maintaining the national distributers to the company is to secure the large contracts from clients, which despite their low unit margins of profits; they guarantee high sales volumes of the company products which offset the low unit margins. True to their plan, MRO has proved a success and IBD has seen a new light which is rapidly transforming it into a global company that can stand international demands and competition thereof.
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