3M at Bernstein Conference Notes

posted in: Notes | 0

Emerging market operations are higher margin because not using things that we built for the way things were done in the 60s and 70s

” I think you have to think about this, there’s always – you’re coming from somewhere, right, and I think when you start to build businesses back in to 1960s and 1970s and so forth, you build another type of infrastructure that you know in emerging and developing market do not need, you can capitalize from other entities around the world. And I think you learn, right. The world has changed in a way as you move ahead and my view is that 3M successfully was built on innovation and empowerment locally. That was the power. But that’s also meant that you build your own entities in many, many countries. I think that was very successful in the 1960s and 1970s, 1980s and 1990s. Today it’s not, right. So I think you need to be bigger and more relevant and drive leverage in your organization”

A lot has changed in six years

” when I came here six years ago, if you think about six years ago, at that time the developing world looked different for everyone, right. We talked about BRIC, if you think about BRIC today, you’d wonder where did they go, right; Brazil, Russia, India and China, right. So if you think about that perspective, that have changed for everyone. It’s not 3M, everyone. And you think about United States today, we thought six years ago, we were not overly excited about United States or West Europe. You look upon it today in relative terms United States and West Europe is okay, slightly better than okay. And then you looked upon the developing economy have slowed. ”

If you want to be a global growth company you must grow in the US and China

“If you decide to be a global growth company, global growth company, if you decide that, we have, then you need to grow two places guaranteed: the United States and China. You need to grow everywhere, but if you don’t grow in United States and China, you will not be a global growth company.”

…” if you are a global growth company, if you don’t grow in the United States and China, you have an issue. It doesn’t matter if you grow very well in Chile and Norway and Sweden and Finland, it doesn’t matter, you have to grow there, but you must grow in the United States and China.”

China is the second biggest economy in the world and it’s not moving from export to domestic

” I view China is the following way. It’s the second biggest economy in the world. It will be big and it is big and it’s growing. It’s also wrong perception to say that they are going from export to domestic. They’re not. They are continuing with export and they complement and build out domestic businesses. That’s what they do.”