Herman miller Essay Example

Herman miller Essay Example Herman miller Paper Herman miller Paper Review the companys strengths and weaknesses. What are the short-term and long-term implications of its internal environmental conditions? Herman Miller produced Its first office furniture in 1942 by a man Gilbert Rhode, he died 2 years after the design was made and De Pre had to find a new designer then he hired George Nelson as Herdsmans first designer. Herman miller Is a 1. 3 billion dollar manufacturer that produces office furniture. It Is one of only four organizations and the only non-high technology that was selected for Fortune magazines 100 Best Companies to Work For. Herman Miller has a rich legacy, they go back to 1905 and the Star Furniture Company which was a manufacture of traditional bedroom suites. In 1909 it was renamed Michigan Star Furniture and hire DC Pre as a clerk then he became president. His father in law bought majority of the shares and in honor of that he named the company Herman Miller. This is where strength comes in because they are loyal to their employees and De Pre was committed to treating all of his employees individuals. They are lead innovators; they have to make sure that they are keeping up with what everyone expects from them which requires Intense research. Early In the history of Herman Miller, It survived the Great Depression, which Is saying a lot considering that the Depression was the biggest economical tragedy to date. In 2000 Herman Miller started off with record high profits and sales in 2000 2001. One of their strengths was when they offered and Employee Stock Option Plan. This gave employees a sense of empowerment because they knew that they had a hand in the company. In 2010 Herman Miller published their long practiced organizational values on a website What We Believe. These are used for uniting employees and building relationships and also contributing to communities. These principles that Herman Miller go by are some of their biggest strengths. Curiosity and exploration, they are a research driven company they respect and encourage risk taking and practice forgiveness. They mention that everyone makes mistakes and If It is an honest mistake then It needs to be learned from and move on. Engaging Is about their owners being actively committed to the life of the community. Stock ownership Is very Important to them but they needs more than that. The mall strength that comes from this and the payoff really come when people are aware of their problems, solutions, and behavior. Herman Miller is about performance and performance is required for leadership. They want to be leaders and they are committed to performing at the highest level possible. They are an inclusive company; they want to include all the expression of human talent and potential that they offer. They design things by looking at the world and how it works and how it doesnt work; there is a method for getting something done and solving a problem. Herman miller is environmentally friendly, which has a significant impact. This will have a long term positive impact in this entity which will add to its value as a many. They are also a well-known brand; people know what Herman Miller Is when you show them the logo or if asked who make office furniture. A companys biggest asset Is their customers and they have great customer loyalty. Herman Miller is somewhat of a more luxurious and comfortable high tech furniture that will benefit off the Cannon Plan that De Pre brought to the table and they still use today. They use teams and they are usually cross functional. They are based on product development and when that product has been developed the members of that team are given new projects. Because Herman Miller has instilled these values into their company they have a long term benefit from the foundation that they have laid which also are intangible. Their weaknesses is the fact that their market is always changing, they are somewhat in the fashion industry and what design was good for 2011 is not going to be the same for the next year. They must always be on top of what is new and what trends people will want to follow. They are also very expensive, much more expensive than their competitors, which in turn during an economic downfall, people will want to go with the cheaper version of the same thing. Another long term implication is the fact that they have always treated their employees well. The company offers them stock at a 1 5 percent discount and they are offered a 401 (k) and receive a 50 percent match for the first 6 percent of their salaries. They are also offered a retirement plan and the company deposits 4 percent of compensation on which interest is paid quarterly. Once again they are automatically eligible when they join Herman Miller. 2. Review the opportunities and threats present in Herman Millers external environment. How will these conditions affect the companys tragic decisions? Herman Miller has many opportunities, as any other business does it Just depends on how they decided to take the opportunity on. Financial Leverage allows Herman Miller to quickly expand into other markets especially in fragments industries. For example everyone is about going green, and Herman Miller took that into consideration and it used it to sell its products. They introduced a Mira Chair that was made out of 45 percent of recycled materials and 96 percent of the materials we recyclable. Builders that use Herman Miller, have cooperative advertising with strategic partners. Hilton Garden Inn rooms are equipped with the Mira chairs and if you look in the booklet on the desk it will tell you how you can order the chair for your personal gain. Herman Miller also has an online store that customers can visit; by having a store online you are appealing to a much wider group of people than normal. It is important that they keep this online market because it is easy and accessible but also is a very cost effective way to get do business. Along with their strength, innovativeness is an opportunity that Herman Miller has going for them. Being in the generation where people are looking to be comfortable and are learning more about the human body, Herman Miller can team up with scientist and any other expert that you can think of to make furniture more appealing physically and at a comfort level. Intense competition is a threat to Herman Miller; because their cost structure is high their competitors can produce other products that arent as expensive as Herman Millers products. Other companies can also look into brining in researchers to find the best fit for the human body, a chair that will help your back rather than make it worse. Another threat is the fact that Herman Miller already survived the Great Depression, they dont want to have to repeat it, but a bad economy is always a factor when you are trying to operate a profitably company. This will take away some customers, but if you are buying Herman Miller furniture sometimes a bad economy wont affect your spending habits. Affected by low growth rates which generate a more intense competitive environment and drive market prices down. A bigger threat that is becoming more common is telecommuting, where workers can carry out their responsibilities in a non-office eating and that reduces the need of office equipment. . Define the components of Herman Millers business strategy. Given the situation analysis, what modifications should be considered? Under the guidance of Dry. Frost was the first to implement a Cannon Plan. They are principles of equity and Justice for everyone in the company. The two major functions of this plan the use of teams and committees fo r sharing ideas on improvements and a structure for sharing increased profitability. This plan and relationship with Frost continued on for four decades. In 2003 Herman Millers tragedy helped the company recover from the collapse of the dotcom events of September 1 lath 2001. Sales fell 34 percent and profits dropped. Even with this happening the company bounced back by adopting a social contract with the workforce, restructuring and place in emphasis on the customer. This approach reinforced cultural elements and sustained the value of the organizational culture. In the past Herman Miller applied strategies that fuel growth and also restructured operations to reduce costs, reintroduce classic models, and launch new ideas and products. The idea for new items can be weak and the company. Herman Miller made up an Accessories Team that was an outgrowth for the project purple. A goal for this project was to stretch beyond the regular business lines. Office accessories is something that Herman Miller wasnt always involved in apart from the fact that it is a big part of what the independent dealers sell. Two people we assigned to come up with a team to launch a new product within 16 months. They hired people with different disciplines that were needed to help support the goal of the team. Leadership and decision making are shared both within the team and across the whole organization. In order for Herman Miller to keep leading the industry with office furniture they need to fit the needs of the changing market. They do maintain the strategic resources to introduce a promising new product that is a growing market segment. They should always be looking for ways to be a diverse company with their products by going into different industries and looking for markets with more long term goals. Herman Miller should consider expanding its global operation to increase its revenues and always have their dedicated cross-cultural teams. Another plus that Herman Miller has is the fact that their human resources is insider a strength in the company. Herman miller has 278 applicants for almost every Job opening. In 2009 they cut their workforce by more than 15 percent and reduced pay for the remaining workforce by 10 percent. The company sponsored 401 (k), even though this was a major problem employees praised the management for handling this with care and class and doing what is best for the company. Its strategy is Business as Usual it seems that Herman Miller will share the good and the bad with the employees, more specifically with compensation. Pay is determined by company performance. They receive a base pay in addition they participate in a profit sharing program where employees receive stock based on the annual performance. 4. Consider the companys international strategy and performance. What options are available to improve results in overseas markets? Herman Miller is considerable manufacturing in the I-J, Asia, and China. Herman Miller products are sold internationally through wholly owned subsidiaries in a lot of countries including Canada, Japan, Mexico, Australia, Singapore, china, India, and the Netherlands. They offer their products through independent dealerships. Herman Miller needs to cure a better return on its international business investments, that way that can take immediate action and have stronger levels of profitability. They can consider the high costs and the complexities of managing wholly owned subsidiaries. They can seek for strategic alliances for entry in new markets where knowledge and understating and competitive conditions are weak. They can seek for entry in growing markets especially India, Brazil, and China. If they do decide to enter new markets they need to conduct research to determine if international strategy is more suitable for the market they are attempting to enter.