A) Company Background
Herman Miller started its operation back in 1905. They started manufacturing traditional style bedroom suites. Early in its history, the company name was Star Furniture Company. Dirk Jan De Pree entered the company as a clerk and by 1919 he became the president. De Pree’s father in law, Herman Miller, purchased the majority of shares of the company and renamed it Herman Miller Furniture Company. The company’s culture originated from the story of Mr. De Pree’s visit to one of his workers who died unexpectedly. “This led Mr. De Pree to wonder whether the millwright was a person who wrote poetry or poet who was also a millwright”. This experience made Mr. De Pree dedicated to treat “all workers as individuals with special …show more content…
They had multiple locations the US and overseas. A committee of 54 employees was selected from every segment of the company, in 1978, to study the need for changes and make recommendations. They use tablets a structure based on work teams, and councils. Hugh De Pree stepped down after 18 years and his younger brother Max De Pree became chairman and CEO in 1980. Since 1981 Herman Miller has been an environmentally friendly and efficient company. In 1994, they opened Herman Miller for the Home, which main emphasis was to residential market. This move gave them the ability to reinstate designs from the 40s, 50s, and 60s. By the year 2000 they have established an Employee Stock Option Plan …show more content…
Internal Weaknesses
• Long lead times, high turnover ratio,
• Herman Miller’s cost structure is high (their debt to equity ratio is high at 148.9 %). They have lower than average operating margin (from 2002-2006 was 4.2%). The industry average is 8.4 %.
External Opportunities
• Developing markets
• Expansion of internet access to developing countries (Growing online sales)
• Demand for low priced products
External Threats
• Abundant substitution for the product
• Intense competition
• The cost of raw materials is volatile and it’s been constantly increasing
• Shortage of timber supply
Trends
According to Abouthome.com the furniture industry is going green. Companies are more aware that consumers are more concern about the environment. Furniture manufactures are using less toxic material and recycled material to manufacture their product. Living spaces are shrinking, therefore, furniture is getting smaller. People are looking to live in smaller places. Since the houses are getting smaller, people are looking into multifunctional furniture to save space. Although this concept is not new, under the circumstances that living spaces are smaller, consumers are demanding furniture that can multi task. In addition, consumers are looking for technology built
Herman Miller started its operation back in 1905. They started manufacturing traditional style bedroom suites. Early in its history, the company name was Star Furniture Company. Dirk Jan De Pree entered the company as a clerk and by 1919 he became the president. De Pree’s father in law, Herman Miller, purchased the majority of shares of the company and renamed it Herman Miller Furniture Company. The company’s culture originated from the story of Mr. De Pree’s visit to one of his workers who died unexpectedly. “This led Mr. De Pree to wonder whether the millwright was a person who wrote poetry or poet who was also a millwright”. This experience made Mr. De Pree dedicated to treat “all workers as individuals with special …show more content…
They had multiple locations the US and overseas. A committee of 54 employees was selected from every segment of the company, in 1978, to study the need for changes and make recommendations. They use tablets a structure based on work teams, and councils. Hugh De Pree stepped down after 18 years and his younger brother Max De Pree became chairman and CEO in 1980. Since 1981 Herman Miller has been an environmentally friendly and efficient company. In 1994, they opened Herman Miller for the Home, which main emphasis was to residential market. This move gave them the ability to reinstate designs from the 40s, 50s, and 60s. By the year 2000 they have established an Employee Stock Option Plan …show more content…
Internal Weaknesses
• Long lead times, high turnover ratio,
• Herman Miller’s cost structure is high (their debt to equity ratio is high at 148.9 %). They have lower than average operating margin (from 2002-2006 was 4.2%). The industry average is 8.4 %.
External Opportunities
• Developing markets
• Expansion of internet access to developing countries (Growing online sales)
• Demand for low priced products
External Threats
• Abundant substitution for the product
• Intense competition
• The cost of raw materials is volatile and it’s been constantly increasing
• Shortage of timber supply
Trends
According to Abouthome.com the furniture industry is going green. Companies are more aware that consumers are more concern about the environment. Furniture manufactures are using less toxic material and recycled material to manufacture their product. Living spaces are shrinking, therefore, furniture is getting smaller. People are looking to live in smaller places. Since the houses are getting smaller, people are looking into multifunctional furniture to save space. Although this concept is not new, under the circumstances that living spaces are smaller, consumers are demanding furniture that can multi task. In addition, consumers are looking for technology built