The economy is chief among threats to 3M's growth and profitability, although its diversification and innovation strategies help to mitigate that threat somewhat. There is a significant threat in the optical film business. This product line, which was 16% of the firm's revenues in 2006 (Jayson, 2006) has suffered a slowdown since that point. The company is transitioning this division towards the LCD market. Competitors represent another significant threat, especially in fast-paced technology-driven markets like optical film (3M 2007 Annual Report). Another threat is increased costs of inputs. In 2007, raw materials costs increased significantly as global commodities prices increased significantly. This in turn squeezes 3M's margins.
It is difficult to analyze 3M's competitive environment, given that the firm is a diversified conglomerate. 3M has strong buyer power, a function of their size and purchasing capacity. 3M also has strong seller power, given the quality of their goods...
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