Herman Miller Case Analysis

Herman Miller Case Analysis

Herman Miller started to develop from a Michigan furniture company. Initially, it just produced some manufactured bedroom suites and there was no big difference with other competitors. However, due to the focus in design and innovation, this company stepped in the high-end furniture market and developed strongly gradually. After that, Herman Miller began to make extension in all over the world in Europe and Asia. Up to now, Herman Miller has been a company that concentrated on production of modern office furniture. Besides, Herman Miller focuses on the environmental stability and sustainable development in the production process. Miller is building the good brand reputation and occupying sizable market share by stepping on a reinvention and renewal path, which also will be its medium and long term mission.

For Herman Miller we can collect many resources in this company. Strong management, excellent entrepreneurship, innovation technology, brands and abundant experience gained from its long run history.

Internal analysis looking at resources and capabilities

Herman Miller has taken good use of its resources to add value for itself. Strong management improve the employees participation in management and increase the whole production efficiency. The organization begin to develop with a different view on management and worker treatments. Each employee can contribute his ideas to company and excellent ideas will come out continually. Herman Miller even codified its excellent entrepreneurship in website, which is wonderful to build relationships and communities. Unique innovation technology is also a key factor for Herman Miller to make his products different. Herman Miller never stop the investment in R&D. Due to experience from the former recession, Herman Miller learn how to make profit and invest in R&D department instead of cutting cost. At last, the Herman Miller’s some famous products are recorded in many fashion magazine article for many years. This brand will be a intangible assets for Herman Miller to add value.

Because all these resources add value to Herman Miller’s production output and keep its products a high recognition than those of its competitors. Herman Miller always uses these advantage to make increase need of customers over its competitors, which will gain the customers loyal and brand effect.

Porter’s Five Forces Model Analysis

The force is very strong in furniture and office equipment market and hard to entry. I will give the precise analysis as follows:

Risk of Entry

In general, economical stability of office equipment industry is poor and is easy to be affected by Macro-economic environment, which increase the risk of entry for new companies. Besides, even though it is a low-tech market, the furniture and equipment industry market trends to a saturated market with lots of strong competitors. The new entry will even gain few profits by intense competition. What is more, nowadays the telecommuting are extensively used in companies will have a negative effect on this market. Therefore, the risk of entry for new companies is high.