One of the best ways to develop a picture of any company is with the SWOT analysis -- a look at a company's strengths, weaknesses, opportunities, and threats. Today, I'd like to focus on 3M (NYSE: MMM), the Minnesota-based conglomerate.


  • Leadership. CEO George Buckley is highly respected, and 3M is repeatedly recognized as a top company for developing leaders.
  • Innovation. Get a load of these stats: 567 patents awarded; 6,700 researchers worldwide; more than 1,000 Ph.Ds on staff; and nearly $1.3 billion spent on R&D in 2009.
  • Geographically diverse. Sixty-three percent of sales are outside of the United States; the company has operations in more than 65 countries.
  • Diverse in terms of revenue streams, too. 3M has six key business units, none of which account for more than 33% of sales.
  • Financially strong. Paid a dividend every quarter since 1916.


  • Litigation. The company needs to fight its patents in court and in the recent past has brought or settled suits against fellow well-financed companies DuPont (NYSE: DD) and Avery Dennison (NYSE: AVY).
  • Continual reinvestment. The downside of innovation: Continual reinvestment is necessary for 3M to maintain innovation and keep the product pipeline strong.
  • Pension obligations. 3M has a well-funded pension and last year moved from defined-benefit to defined-contribution plans for new workers, but it still faces rising expenses related to pension and retirement benefits.


  • Growth in emerging markets. In the recently completed second quarter, sales in emerging economies grew 38% year over year.
  • Growth by acquisition. This strategy has served 3M well of late, and it plans to continue spending money on acquisitions this year.
  • As the company calls it, "Managing the entire pyramid." What this means is owning the entire value chain in current product classes it controls -- not just the high end.
  • Adjacencies. Enter markets similar to areas it is currently in, such as renewable energy, water infrastructure, architecture, and lighting.


  • Acquisitions gone wrong. From the company's 10-K: "Future results will be affected by the Company's ability to integrate acquired businesses quickly and obtain the anticipated synergies."
  • Rules, regulations, and lawsuits. Again, the 10-K says it best: "The Company's future results may be affected by various legal and regulatory proceedings, including those involving product liability, antitrust, environmental or other matters."
  • Raw materials costs. Fluctuations in commodity or energy costs pose a threat to profits.
  • Cheaper competitors. The company may have to accept lower margins to compete on price with lower-cost manufacturers.
  • Currency rates. Because the majority of 3M's sales are abroad, a strong dollar would dent the bottom line.

What have I missed? Fill in the SWOT blanks in the comments box below.