Herman Miller Case Summary

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Strategic options for Herman Miller’s future success include:
• Expanding existing product line and therefore, increase the target customer base.
• Continue global expansion, specifically in emerging nations as well as increase current capabilities through acquisitions.
• Focus on residential market.
• Expand regionally with the current business model and focus on marketing efforts.
Herman Miller’s first option is to expand its product line. Apart from selling office furniture and equipment, it can partner up with companies to provide complementary products. These products can include textiles, upholstery, wallcovering, curtains rugs. In this way they will be able to provide a complete solution to customers and as well as attain a strategic …show more content…
This alternative is feasible as it solves a lot of issues. By expanding internationally, there would be an increase in customer base which would result in improving sales. With globalization, it would be easy for Herman Miller to establish subsidiaries in different countries as well as institute a distribution network. With this alternative, Herman Miller could also avoid economic slowdown in a specific country as the profits would continue to pour in from other countries, with only the exception of a global economic crisis. Emphasis on emerging nations is a strategic preference, as these countries are growing and their capacity to invest is increasing. Also acquisitions in these new geographies would help Herman Miller in increasing its current resource capability and gain insights into customer preferences. This would ultimately help the company in penetrating these new markets easily.
Third option for Herman Miller is to focus on the residential market. As trends are changing in office furniture industry, Herman Miller can introduce a new product line especially for homeowners as well as increase their marketing and advertising efforts on this target segment. Creating home solutions will help them avoid disruptive trends such as telecommuting which cause decrease in …show more content…
Targeting large customer base would require substantial production capacity and complete control over its manufacturing process to maintain consistency. Also, high price products might be a deterrent in converting potential customers, and therefore, Herman Miller might need to rethink their pricing strategy for overseas customers. For providing complementary products through partnerships, they need to increase their marketing efforts as well as actively forecast future sales in order to combat uncertain economy.
Resources and Capabilities: Herman Miller’s net earnings in 2010 was $28.3 million which increased to $70.8 million in May 2011. Thus, they have the kind of investment required for the above strategy. Also, they have manufacturing units in U.S, Europe and China which would support the increase in demand. It’s highly sophisticated production system has the potential of producing high quality and consistent products.
Management preferences: Management focus has always been on overseas expansion. Their current goal is to emphasize on emerging markets and acquire POSH, which is aligned with the strategy stated above. Also, management has always been open to new strategic options and therefore, suggesting partnership up with other companies to increase product offerings would be viable
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