Herman Miller

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Introduction Herman Miller, Inc. is primarily concentrated in the business and institutional market. Herman Miller is one of the leading players in the US office furniture industry with a 12% market share. Over the last several years, the entire industry has experienced significant declines in sales due to poor macroeconomic conditions. However, Herman Miller has managed to outperform most of its competitors in terms of profitability, illustrated through strong operating margins and return on sales. Herman Miller has a strong reputation for high quality, innovative products, strong customer service, high customization, and reliability. This strong brand equity enables the company to leverage its brand strength across different market…show more content…
Threat of New Entrants Herman Miller specializes in the design and manufacture of high-end office furniture. The company has established itself as a premium manufacturer of these products. With research and development costs being over $20 million a year, most companies are not capable of entering into this high end market. With the future of the industry currently looking to be on the downside due to prolonged effects of the recession, most potential new entrants will be driven away from investing into the office furniture industry. Also, Herman Miller’s high-end product line would be difficult for competitors to imitate due to high research and development costs, and moderately high capital expenditures needed to start up. These factors would determine a Low Threat of Entry. Threat of Substitutes There are a number of available substitute products in the office furniture industry. Customers can easily switch to another product because of price, service, or several other factors. These factors determine the Threat of Substitutes to be high. Bargaining Power of Suppliers The items used in healthcare furnishings are standard throughout the industry. Suppliers are plentiful and manufactures can easily switch suppliers. Bargaining Power of Buyers Customers of office furniture have a number of companies to choose from, and an even larger variation of products to choose from. Buyers can choose between a large range of prices and

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