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Herman Miller case Case Study

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Updated: Jul 15th, 2019

Identify problems and the issues

Herman Miller, one of the leading companies in the office furniture industry is widely recognized as an innovative company (Stephen, Frank, Karen & Charles, 2012). However, despite being the leader in the industry, the company has faced several challenges since its start. During the period of recession, the company’s sales decreased by 19 per cent. The 911 terror attacks also affected the company in several ways.

The economic downturn during these two periods greatly contributed to the company’s slowed performance. It is impossible for Herman Miller Company to foretell or predict changes in the economy, and as a result, the company cannot tell how the future changes in the economy will affect it.

In addition, the focus on management practices in the company gets distorted, making the innovation programs fall apart, due to harsh financial pressures (Stephen, Frank, Karen & Charles, 2012).

The other challenge is that the operational costs incurred by Herman Miller Company are unbearable (Stephen, Frank, Karen & Charles, 2012). During the period of economic down-turn, the company realized a high workforce against little sales. Changes in the costs of low materials also affected Herman Miller Company.

This shows wasted efforts. It is obvious that when the operational costs are too high, any company can incur huge losses. The company laid-off its employees in order to lower or cut on costs.

The company faces problems in its supply chain management. Consumer satisfaction requires sellers to make the right quantity and quality of products to customers at the right time and in the right place (Stephen, Frank, Karen & Charles, 2012). The company lacks healthy relations with suppliers, and this leads to customer dissatisfaction.

Herman Miller faces problems in its supply chain distribution due to lack of enough technology in communication. In reference to Stephen, Frank, Karen & Charles (2012), Fortune named Herman Miller as one of the most admired companies, as the only non-high-technology company among the four companies.

Herman Miller also faces stiff competition from other companies in the industry. Some of the main competitors of the company include Haworth Inc. HNI and Steelcase Company. This gives the consumers an opportunity to shift their preferences by choosing alternative products from the competitors. A case whereby ergonomic products compete with ordinary chair confirms this, considering that consumers of furniture products are price sensitive, and prefer high quality products.

SWOT analysis of Herman Miller Inc. (Stephen, Frank, Karen & Charles, 2012)

The strengths include

  • The company voted as Fortune’s 100 most admirable companies.
  • Introduction of social contract
  • Employee satisfaction
  • Firm management in the company
  • Inclusiveness and transparency of employees
  • Herman Miller strives to make the world a better place.
  • Herman Miller maintains a strong position compared to its competitors.
  • The company has been showing financial stability in the recent times.
  • The consumers of the Herman Miller’s products exhibit loyalty to the brand.
  • The company has a well-designed and executed marketing strategy

The weaknesses include

  • High operational costs.
  • Lack of potential to increase marketing due to little integration of technologies.
  • The company hired the first CEO and president from outside the company in 1992. This can result to intuitive decision making based on his former company. The CEO might also lack the experience in the company.
  • The company has ineffective vision, mission, goals and HRM directions.
  • The HRM department needs to be improved.

The opportunities include

  • Consumer’s Increased demand for ergonomic furniture.
  • Herman Miller has gone green.
  • The advancing technology.
  • The office furniture industry has shown remarkable growth in the past few years.
  • Globalization has opened an opportunity for organizations to expand their businesses internationally.
  • Emerging markets.
  • Room for innovations and inventions.
  • Increasing security measures by governments in market places.

The threats include

  • The office furniture industry is facing social shift forces such as; caring for the environment, shifts in customer preferences, and companies adhering to legal requirements, among others.
  • The advancing technology is a threat to the furniture industry considering that most people work using their computers.
  • The terror attacks pose a challenge to the company considering that it has many stores distributed all over the world.
  • The economic meltdown is unpredictable and hence a threat to the company.
  • Introduction of new unfavorable laws to govern the industry’s operations.
  • Stiff competition from both its direct and indirect competitors.
  • Shifts in customers’ preference to other products from other companies.

Implementation and recommendation

Herman Miller needs lots of adjustments in its operational strategies, in order to continue gaining competitive advantage over its competitors. The company should take advantage of its strengths and opportunities, and find appropriate strategies to curb its weaknesses and threats. To start with, Herman Miller should continue holding on strategies that have helped it to perform well in the past.

This will ensure that the company will not be affected by any change introduced in it. It is recommendable that the company formulates strategies to reduce operational costs to avoid working at a loss, or falling out. It is not recommendable for the company to lay off its employees as a way of cutting on costs. This can make the company lose potential talents, and hence will face difficulties in reinventing and renewing itself.

It should instead consider other strategies such as sourcing raw materials at cheap prices, recycling materials, integrating technological systems in its operations, opening stores in markets to avoid logistics costs and cutting the pay of the top managers, among others.

The company should also improve on its mission, vision, long term objectives and HRM directions. This will ensure that all the staff get committed and focus their duties on meeting the company’s goals.

Improving the HRM department is one of the most significant steps that can help the company to improve its competitiveness. Measures such as training employees, motivating, creating good relations and sharing the company’s focus with them can help Herman Miller Inc. to dominate the market in this industry.

It is also very crucial for the company to promote its staff for top positions, instead of hiring managers from other companies as top executives. The employees of the company might be demotivated by the move and hence may refuse to collaborate with the new CEO. Furthermore, the new CEO may misguide the company considering that he or she lacks the knowledge and experience in the company.

The company should also consider integrating Customer Relations Management systems and other technological systems in its operations. This will help Herman Miller Inc. to provide relevant information to its customers at all times. Through the technological communication systems with suppliers, customers and departments will be cheap and efficient.

It will also help Herman Miller to keep pace with the shifts in customers’ preferences and hence produce exactly what fits their specifications. The company will achieve customer satisfaction, leading to more attraction and retention of customers.

Herman Miller Inc. should also consider investing in advertising campaigns in order to; create awareness, inform and educate consumers in emerging markets about its products. This will increase the company’s sales, profits, market-share and revenues among others. The aforementioned recommendations can put the company in a better position in terms of performance.

Reference

Stephen A., Frank S., Karen, P. M. & Charles, C. M. (2012). Herman Miller: A Case for Reinvention and Renewal Researchomatic. Web.

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IvyPanda. 2019. "Herman Miller case." July 15, 2019. https://ivypanda.com/essays/herman-miller-case/.

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IvyPanda. (2019) 'Herman Miller case'. 15 July.

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