Herman Miller Inc is a leading company in the manufacture of office and home furniture. This success is largely attributed to proper and comprehensive business strategies put in place by the management of the company, especially the leadership of the founding family members. The company remains a top contender for honors in its line of business despite having been in existent for a very long time. However, the fiscal analysis for the three years, 2008, 2009 and 2010 shows a company that is facing instability in all categories of finance including cost of sales, gross profit and the net income. It is based on the shortcomings that this document seeks to a detailed analysis of the strategies to the strategic and gives appropriate recommendations to enable proper tackling of the challenges.
The management of the company is currently faced with many strategic problems. The main problem is the high level of competition provided by new companies in the furniture manufacturing industry. These new companies make products, which do not just pose competition to Herman Miller Inc’s products; they also eat into the company’s market share. This is the main cause of the fluctuating and unstable figures in the fiscal report. Herman Miller Inc is also faced with the pressure to conform to new standards, especially those pertaining to environment. The furniture industry relies heavily on wood for sustenance. Thus, it becomes a challenge when the question of environmental conservation is raised. Although the company takes a leading role in environmental conservation, the use of wood to make its products still makes conservation a strategic challenge.
The company’s fiscal report shows a fluctuating cost of sales between the three years on which the report is based. There is need to stabilize the sales of reports to ensure smooth financial operations. Likewise, the profit of the company is unstable, ranging from 35.2% in 2008, 33.4% in 2009 and 34.5% in 2010. However, the operating income and the loss in the Steelcase sections have decreased gradually in the three completed years. There is need to reconcile these figures to ensure maximization of the company’s profit.
The key to dealing with these challenges is to increase the sales of the company. Herman Miller Inc needs to take a bold step of increasing its sales to maximize profit and beat the competition they face. The best way to increase sales is to explore market niches never before explored. This way, the company will have an increased market for their products. The new market could be a new geographical location or a section of the market that was not catered for previously. Apart from increasing their sales, exploring new markets will enable Herman Miller Inc beat the competitors in the business.
The main challenge pertaining to expanding the market base is uncertainty since there is guaranteed success. However, the benefits of this risk taking outweigh the cons thus it is a worthy initiative since it will help increase the sales and profits and to beat the competitors. The management needs to conduct a proper SWOT analysis on the new market base before they start the sales of their products.
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