3M – Avery Synergies a Smart Business Growth Strategy
Printing owners often get tunnel vision when it comes to growing a business. We think that the only way to grow is to get a hot new product, or generate more revenue by adding customers. But a smart business growth strategy involves a panoramic view – like the move made by 3M to acquire Avery.
The key to this acquisition for 3M is its cost synergies. According to Nomura Analysts Shannon O’Callaghan, “3M has been making an organic push into the US label market over the last several years, and we think Avery Dennison’s Office & Consumer business gives them scale, while offering a cost synergy opportunity.”
Some put that cost synergy figure in the neighborhood of $80 million. A nice chunk of change.
It’s smart business on the part of 3M, and an excellent example of why the rich often get richer in this world. 3M thinks very strategically in terms of growth, and it’s not always about developing the latest and greatest. It’s also about doing business smarter.
Cost Synergies for the Little Guy?
So how could 3M’s strategies work for you? Isn’t this just a strategic move for a big company with a ton of resources?
The answer is no. It is true that you will need to surround yourself with a team of experts to engage in a successful merger and acquisition or a partnership. But by no means should you prohibit yourself from doing it.
If you’re in the commercial printing business, this is especially a smart strategy to consider. We all know that in a flat economy, sales are hard to come by. That’s why you can’t just think in terms of adding more sales people, or cutting your costs.
You may have to reconsider the fundamental structure of your business. Are there parts of your business that are heavy burdens, and that you could achieve great synergies by teaming with someone else?
This is a case where you could work with a competitor to achieve a win-win situation.
Naturally, there are risks involved, as there are in any business. But the greatest risk a printing owner can make is to be constrained in his or her definition of a business growth strategy. Hopefully, 3M’s example can open a few eyes.
(Photo by modenadude)
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Rock LaManna provides executive coaching for printing owners looking to grow their printing business, merge with a synergistic partner, make a strategic acquisition, or create a succession plan.