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Herman Miller Case
Transcript of Herman Miller Case
Reinvention and Renewal Herman Miller Background SWOT Porters Five Forces Strengths Opportunities Weaknesses Threats Risk of Entry Rivalry Among Established Firms Bargaining Power of Buyers Bargaining Power of Suppliers Substitute Products Complementors Strategies Herman Miller's challenge is to continue to reinvent and renew itself in times of economic uncertainty Main Issue We have developed three alternatives to solve this company's problem Alternatives Focus their efforts on marketing Alternative One Recommendations Continue to use the same business model or develop a new strategy? Continue to use the same business model Alternative Two Use the current business model but continually update based on the economic activity Alternative Three Why focus marketing efforts? Advances in technology have decreased need for office furniture Increase in the need for ergonomically correct furniture due to increased time in front of a computer Why use the same business model? Current business model has proven effective in past recessions Why update the current business model? Current model has many effective policies currently in place We cannot effectively predict how the economy will change Most effective strategy to combat an uncertain economy is to stay with what has worked well and update it as change occurs Current business model is still fitting with company values and goals Office furniture industry is constantly in a state of flux 2002 March (cc) image by jantik on Flickr Equa Chair Established in 1905
Began as Star Furniture Company in Michigan
Only manufactured bedroom suites until 1942
Today it is a $1.3 billion global company
Expanded internationally in the 1950's
In the 1960's created the Action Office System
In 1970 became a publicly traded company
In the 1980's the Equa chair was named design of the decade
1994 Herman Miller Home was launched
9/11 caused 38% of the company to be laid off Background Continued Voted Fortune's 100 best companies to work for Social Contract Introduced Employee transparency and inclusiveness Strive to create a better world 1992 first CEO and President was hired from outside the company Potential to increase marketing efforts Increase in demand for ergonomic furniture Take advantage of the growing desire for green products Technological advances decreasing the need for office furniture Industry in a constant state of flux Prices of raw material constantly changing No advantage from economies of scale
do not produce in mass quantities Have a cost advantage because of just in time inventory
have created a structure that allows for higher variable expenses and lower fixed costs Established Brand Constant change in the needs of consumers
based on technology and social influence Three main competitors are Haworth Inc., Steelcase, HNI Consumers are willing to pay a premium for quality and socially responsible products Rely on suppliers heavily to provide inventory just in time Greatly affected by changes in the cost of raw materials High threat of consumers choosing alternative products
ergonomic chair vs. ordinary chair Complementors of Herman Miller's products:
computers, laptops, tablets
telecommuting systems Objectives Focus on:
Green initiative To "Design and build a better world" Values operation excellence Operations Employee empowerment Innovation Production Lean manufacturing techniques Assembly-based production Inventory Just in time inventory low inventory turnover (10-20days) order driven production Action Plan Focus marketing on the residential market Create a product to serve new needs Survey consumer to find a way to satisfy their needs Conduct research to gather data that will assist in advancing innovation Action Plan Maintain focus on internal customers empowerment Maintain current operational controls Stay focused on sustainability 1- Focus their efforts on marketing 3-Update the current business model 2-Continue using the current business model Action Plan Actively forecast the future continue healthy relationship with suppliers Ensure products continue to be in line with society's values We recommend the third alternative