Dear Mr. DeSimone, 3M company became known for their adhesive tape after starting out making sandpaper. It took the company 14 years to turn a profit but as soon as they came out with scotch tape, William L McKnight, and his creative team was able to turn a bankrupt venture into a successful business. As 3m grew larger operations became difficult to manage, so McKnight had designated a division for adhesive and other components. With each unit, the company set financial performance targets of 25% for Return on Equity and 27% Return on Capital Employed. Mr. DeSimone, you succeeded Jacobson in 1992 becoming the new CEO of 3M. AS CEO you continued with the financial performance targets set for each division but in the midst of a worldwide economic slump it became difficult to reach the financial goals set. In 1992 Return of Equity fell to 18.8% and Return on Capital Employed decreased to 19.7%. To bring the Return on Equity and Return on Capital Employed, I have a few recommendations that can help your company reach your financial targets. Recommendations: Return on Equity …show more content…
To increase profit margin is to enhance profits about equity. Increasing the margin can be done be increase the price of each product. With increasing the price, it expresses that your products are of high quality in comparison to your competitors which may help garner more sales in the process. Another way to increase the profit margin is to cut cost. Cutting cost is done by lowering the cost of goods sold and reducing overhead cost. Speaking to your vendors will allow you to get a lower deal which also helps with cutting cost. This method will provide the quickest results of the recommendations mentioned in this