Herman Miller Case Study Essay

3539 Words May 1st, 2013 15 Pages
Herman Miller

1. Do a 5 Forces analysis of the office furniture industry.
In Porter’s Five Forces Model, the forces are listed as Risk of Entry, Bargaining Power of Suppliers, Bargaining Power of Buyers, Threat of Substitutes, and Rivalry among Established Firms. For Herman Miller, the rivalry between the established firms is high, and the most important force in their industry. Design is the key feature in the furniture industry, so the company that can come out with new and favored designs will win out in market share and profits. The company that is able to continually win the design battle will have the opportunity to establish brand loyalty and clout, creating a buffer for future downfalls in the economy, entry of new
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3. What are the key industry life-cycle factors in the office furniture industry, and how should Herman Miller respond?
The office furniture life cycle is a mature industry that has been established since the earlier part of the twentieth century. As such, the factors that affect Herman Miller are ones that affect industries within a mature industry. The main factors that affect Herman Miller are its ability to minimize costs, adjust to volatile changes in demand, and to maintain its brand loyalty. Throughout its history, Herman Miller has used a system of employee empowerment to develop new ideas that would, in the long run, minimize costs and increase profitability. Committees were created that could share ideas on improvement, as well as a plan for employee. As time went on, this structure was updated, but the core idea remained the same; giving employees platforms with which to share their ideas on how to better the company. Herman Miller also began a policy with which employees became shareholders within the company. The benefits of empowering the employees are obvious. With this policy it became possible for employees to recognize areas that might need improved that management might have missed. It gives the employees a sense of purpose that goes beyond their job, and has the employees tuned into the overall success of the

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