Herman Miller

With a combination of three analytical tools we were able to determine the major obstacles Herman Miller need to overcome in order to obtain and sustain success. The first analytical tool we used PEST, this is a acronym for Politics, Economy, Social and technological forces that will effect a organization in a particular industry. For politics there are no strong political factors effecting Herman Miller or the furniture industry for that matter. As far as the economy goes the service and supplies industry is an economically volatile industry. The recession hit the office furniture segment hard resulting in a 26.5 decrease in industry sales. This resulted in Herman Miller’s sales being down 19%, the domino effect cause Herman’s debt-to Equity
This measures the strength, weaknesses, opportunities and threats the organization faces. The strength of Herman Miller’s lies in its loyalty to employees, rich legacy, strong management, brand name and customer loyalty. The weakness of Herman Miller is that their revenue is widely impacted by the change of the market and trends. The opportunities that Herman Miller can take an advantage of is it financial leverage. Herman Miller can quickly expand into other markets and products, especially in fragmented industries, “Financial Leverage" has a significant impact, so an analyst should put more weight into it. "Financial Leverage" will have a long-term positive impact on this entity, which adds to its value. So analyst should put more weight into it. Financial leverage will have a long-term positive impact on this entity, which adds to its value. Another opportunity that could be taken a advantage is creating new products. With the resources that Herman Miller has at their disposal they are highly capable of expanding its product line to obtain
The first force is the threat of new organizations entering the market. The furniture industry has many competitors many of whom are new to the industry. The next is bargaining power of suppliers. The next force is bargaining power of the customer, for the industry that Herman Miller is in the buyers requires special customization. This gives Herman Miller an advantage due to the fact they are creating value in offering one of a kind furniture to the consumer. The next force effecting the organization is threat of substitute, substitutes in this industry offer lower quality and performance standards, which happens to cause a high cost in switching to substitutes. The threat of new competitors is always looming around the corner. The difference between new entrants and new competitors is that new entrants are entering the market for the first time. Were as new competitors could have already been in the market just not in that specific segment. So the threat of new competitors will not necessarily have n impact on Herman Miller profit. The reason is because this industry requires economies of scale along with high capital requirements. So Herman Miller will be able to retain a high level of it customers to help the organization accomplish its