Herman Miller Case Study

Case Study On Herman Miller

Herman Miller is one of the biggest furniture manufactures in us and it is based in Zeeland, Michigan. It mainly manufactures office furniture, equipment and home furnishing.

HISTORY

Herman Miller was a manufacturer of high quality bedroom suits, founded in 1905 and was first named as Star Furniture Co. In 1909 it was renamed as “Michigan Star Furniture Company”. At the same time Dirk Jan De Pree was hired as a clerk and became the president of the company in 10 years. In 1909 the company purchased the major shares and the name of the company has changed after De Pree’s grandfather’s name as “Herman Miller”.

Like many companies Herman Miller also faced a failure in 1930.Company was suffering with financial problems. At that time De Pree was looking for a solution and met Gilbert Rhode, a designer from New York.Gilbert Rhode designs were antithetical to traditional designs but he convinced De Pree to” move away from traditional designs and focus more on the designs that will be better suited with the changing life style of Americans”

In 1942 De Pree hired George Nelson as companies first design director and after four years in 1946 Charles and Ray designers were hired to design furniture.

In 1950 Herman miller introduced a plan called Scanlon flan which states that all the employees are fee to express their ideas and contribute their thought to the company. This allowed company to attain employee loyalty. In the same year Herman miller has introduces its first molded fiber glass chair and Eames lounge chair. The first overseas foray was also happened in the same year .

In 1962 D.J became the chairman of the board after 40 years serving as a president and now Hugh Dee Free became the president who is the son of DE Pree. In 1962 the company has established its dealers in South and Central America, Australia, Canada, Europe, Africa, the Near East, and Japan .

The first stock offering was made in 1970. In 1976 The ergon Chair is the first designed based on scientific observation and ergonomic principles, was introduced. It was also very successful.In 1980 when Hugh De Pree stepped down his younger brotherbecame chairman and cheaf executive officer of  Herman Miller.In 1992 J. Kermit Campbell became Herman Millers fifth CEO and president

In 1995, Campbell resigned and Mike Volkema was promoted to CEO.

http://www.hermanmiller.com/about-us/who-is-herman-miller/company-timeline/1930.html.

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SWOT ANALYSIS

STRENGTHS

Environmental advocacy

As mentioned by Dj De Pree  “Herman miller will be a good corporate neighbor by being a good steward of the environment”1 it followed and believed that future quality of human life is dependent on healthy and sustainable natural environment. Herman millers put forward some environmental goals in 2004, they include zero operational footprint and 100 percent renewable electrical energy. The company has achieved some of its goals in 10 years it reduced footprint by 91 percent and usage of 100 percent of electrical energy from renewable resources. By 2020 the company goal is to reduce the operational footprint to ZERO.The purpose behind these goals is to reduce all negative environmental factors as much as possible and create a better world for the future.1(Herman Miller.com)

Following these principles has helped Herman Miller to maintain its image in providing environmentally green furniture. People started showing their interest in more eco friendly products now a days. Looking at the environment in the future there is a need for each and every person to cut down products that are harmful for the environment. So from this point of view in a long run If Herman Miller can achieve all its goals and set new goals which tend to save the environment and go green ,It will be able to maintain its brand image and there is a chance that all the people will trust and prefer Herman Miller’s products which directly helps the company to increase its profits. Herman Miller being eco friendly helped the company to be unique compared to its peer competitors.2 

1. http://www.hermanmiller.com/about-us/our-values-in-action/environmental-advocacy.html

(2) Herman Millar,Inc. Traditional Case Study,June 18th 2012 by David Maillie, Andrew Hatfield-O’Hern, Andrew Withers, Isil Ecevit, Nawaf Nizamudeen

Brand name

Brand name can be the most important intangible assert that a company owns. Tangible assets might become worthless at some point but brand name stays. Brand name earns customer loyalty. Customer loyalty is important for a company at times when it introduces new products into the market. This is the area where the company stands out from its competitors. So for short-term brand names help to gain customer loyalty and also it helps when the company is facing economic problems. Generally ,when a company does not have enough money they cut down the charges for advertising. Companies with good brand name don’t have to spend a lot when it is facing economic problems. In long term it helps the company to retain substantial value and helps business to sustain for many decades. 3(marketing insights to help your business grow by Peter Francese,2002)

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Strong Orientation towards R&D

Herman miller always concentrated on customer needs which paved a way to research and develop new products of customer interests.so, looking back in the history of Herman Miller, It came up with many innovative products like Eames molded Fiber glass chairs, Eames lounge chair, Aeron chair were some of them. In 2013 the company introduced an ergonomic work chair, which was named as Mirra2 work chair and it was a great invention. There are many innovative products released in the market in 2013 according to the customer needs.

Spending the company’s cash on research and development enabled them to come up with innovative thoughts and come up with successful products. The company by doing this is giving a very great competition to all its competitors. R&D also helps the company to maintain the high quality standards, which it is recognized for. In long run R&D development helps the company to gain customer trust.4

(4)Herman Miller, Inc. SWOT Analysis. (2015). Herman Miller SWOT Analysis, 1-8.

Strong Management

Strong management always encourages employee participation in management and increase whole production efficiency5. Herman miller in 1950 implemented Scanlon plan. Scanlon plan states that all the committees should be involved in sharing ideas on improvements and structure of increased profitability. As the years passed some changes were made to this plan in 1977 as it was designed originally for the production workforce. In 1979 the company has established new organizational structure when 96% of the employees voted to accept.