1. Introduction1.1 Executive Summary As one of the leaders in the office furniture industry, Herman Miller Inc. has creates their own innovation and processes. Herman Miller promise that they will take the society into the account first rather than the companys profitability. Therefore, Herman Miller will ensure that the entire product that produces by the company is socially environment to society as well as take initiative to involve in the CSR activities. In order to achieve the companys vision and mission, the company has set various long term objectives so that it can attain it and more forwards to the next stage. Today, more and more company move towards globalize, therefore the company should analysis its external and internal environment, SWOT analysis, strategies choice. Due to this analysis that had conduct, it will help the company to ensure that what are the threats or weakness that the company facing now and how to prevent, what are the opportunities that the company can grab, and so on. Furthermore, by doing this, it will help the company to have a better understand about the strength of the company. 1.2 Company BackgroundHerman Miller Incorporation is the leaders in the office furniture industry, which have high reputation in term of innovation as well as the processes. DirkJan (D.J.) De Pree as a clerk and sooner promoted as the companys president in 1919. After few years, he convinced his father-in-law, Herman Miller to buy over the majority share. During 1970s, Herman Miller Incorporation has been listed and at the same times, the company first stock (IPO) has been issued. Furthermore, the company had be awards as Fortunes Most Admired Companies, The 100 Best Companies to Work For and FastCompanys Most Innovative Companies in 2008 and 2010.

1.3 Company Vision and Mission StatementThe vision statement of the company, Economic vitality, healthy and environment friendly is the elements that cause the future quality of human life [Therefore] we have launched Perfect Vision, a broad initiative that sets significant sustainability targets for the year 2020. Source: adapted from Maillie, and et. al. (2012)Its shown that the company is placing the society and the environment in the first place rather than their companys profitability which related to corporate social responsibility and ethical practise.The mission statement of the company,By design the furniture and providing related services that can help to enhance the human experience in workplace as well as socially responsible to the community which cause the world better around youSource: adapted from Maillie and et. al. (2012)Its shown that the company promise to provide the better quality of furniture to the consumer, so that it caters to their unique demands in good condition. Other than that, the company also provides a productive and healthy workforce to their employees.1.4 Corporate Social Responsibility and EthicsThe CSR activities that perform by the company:1.4.1 Community ServicesThe company has set the goals to each employee which each of the employees must participate at least up to 16 paid hours a year with the charitable organizations. 1.4.2 Environmental AdvocacyThe companys policy is not to produce unnecessary wastes and fully rely on green energy at the end of 2020 by ordering the raw materials which not hazardous chemical. 1.4.3 Health Risk AssessmentBy providing the health risk assessment to employees is also one of the corporate social responsibilities, so that the employees can have a strong feeling which the employer is concern about them. 1.5 Long Term Objectives (LTO)According to Maillie et. al. (2012) cited that:1.5.1 Environmental AdvocacyThe company concern on the internal and external point of views that towards the company by providing their work environment, and the goal in 2020 by eliminate all the pollution that the company produces. 1.5.2 InnovationThe company will ensure that the product that the company produces always in modern design as well as usefulness to entire consumer.1.5.3 QualityBesides, the company also ensures that the products qualities that the company produces are good and meant to be used.1.5.4 PerformanceHerman Miller treat all their employees as team members and make them put 100% effort for their job every day, so that it can ensure the employees can achieve what the company want to be. 1.5.5 Market GrowthTo ensure that the company grow and gain the market shares in furniture market at home market as well as in the international level.

2. Macro-environment Analysis2.1 Political and LegalThe regulation which imposed by politician which are forced the company to involve in Carbon Credit Exchange System, which related to carbon tax credit and pollution caps (Watson, 2009). Besides, Herman Miller had comply with the U.S. Securities and Exchange Commission (SEC) which appointed majority of the 14 member of the board which must independent (Shipper, et. al. 2012).2.2 EconomicsDue to dot-com bubble burst and terrorist attacks in 11th September 2001, was affected the U.S. economy. At the same time, it also causes the company sales dropped from $2.0 billion in 2008 to $1.6 billion in 2009. Moreover, the profit of the company has been dropped from $152 million to $68 million during recession. In 2012, the company had also facing turbulent and uncertainty economy condition.2.3 SocialMaillie, et. al. (2012) cited that the growing trend in the society toward the environmental issues, therefore, the society will demand more on the product which is environment friendly. Hence, it creates a good opportunity to the company and further ahead of its competitors.2.4 TechnologyIn 1998, the company had introduce a new website (www.hmhome.com) to boost the sales by connecting with 180 small businesss retailers as well as made a 3 dimension (3D) design computer program to provides customization services to customers. Besides that, Herman Miller Production System (HMPS) with Just-in-Time (JIT) is tried to minimize inventory amount (Shipper, et. al, 2012, p334).2.5 Environment The company starts to take the initiative by using their Energy Centre to generate the electrical and steam power to run the facility by burning the waste. Furthermore, the company is using the substituted raw materials which are walnut and cherry wood to replace the endangered rosewood to sustain the resources (Shipper, et. al. 2012). Formation of the Environmental Affairs Teams, which responsible for the recycle activities and reduce the solid wastes have been authorized by Max De Pree.3. Industry Analysis3.1 Porters Five Forces3.1.1 Supplier PowerThe bargaining power of the suppliers for Herman Miller is low due to the product that the company produce become merchandise or commodity. Besides, bargaining power is low also because Herman Miller has alternative choice in choosing suppliers (Herman Miller, 2012).3.1.2 Buyer PowerIn contrast, the bargaining power of the buyers is high. It is because they are a lot of competitors are offering the similar products to the consumers. Therefore, consumers can change their preference towards Herman Millers product to competitors product (Severianogarza. 2012).3.1.3 Competitor RivalryHerman Miller is facing the high competitor rivalry. It because there are a lot of the existing furniture manufacturer or company such as Steelcase, Haworth, HNI and so on which competing directly by selling the similar and high quality products (TermPaperWarehouse, 2014).3.1.4 Threat of SubstitutionDue to the high competitor rivalry, it cause the company have the high threat of substitution. The more the different types products which can replace and used as chairs and table, example modern look in office (Severianogarza, 2012). The consumer will have the high chance to change their preferences.

3.1.5 Threat of New EntryThe threat of new entry is high due to the office furniture industry have the low barriers of entry, and it has many local and global company easy to start their business in the country (Severianogarza, 2012). Therefore, Herman Miller will compete with more and more local as well as the global competitors.3.2 Porters Diamond3.2.1 Firm Strategy Structure and RivalryThere is a low entry of barrier to the furniture industry, therefore, it cause a huge number of rivalries enter into the this industry such as Steelcase, Haworth, HNI and so on (Chhantyal, 2012). Due to this, it shown that the rivalry became more and more intense.3.2.2 Related and Supporting IndustriesAs the market leader in the office furniture industry, Herman Miller have built up the relationship with various companies that help the company to ensure that can produce the high standards and quality of the products and services and meet the consumers needs and wants. Based on Herman Miller (2014), the collaboration companies include CORT Rental furniture, Eagle Group, Luxo and so on.3.2.3 Demand ConditionThe trend of the people that like to spend their time in-front of computer, keep on increase slightly. Therefore, to minimizing the bargaining power of the buyers, Herman Miller had come out a new concepts which producing the ergonomic furniture and make it become their companys core competence to retain the customer bases. The ergonomic furniture can help to lower possibilities of fatigue and injuries like carpal tunnel syndrome (Shipper, et al. 2012).3.2.4 Factor ConditionDue to the scarcity of the natural resources and high demand of the customer towards Herman Millers unique products, the company stop to using the endangered rosewood and replace using the walnut and cherry wood to ensure the sustainable of the resources and product the better qualitys products (Shipper, et al. 2012).3.3 Yip Globalization3.3.1 Government DriversIn order to enter into global market or globalization, Herman Miller must comply with all the applicable rules and regulation of that particular country (Herman Miller, 2012). Furthermore, Herman Miller should also deal with the variation of the exchange rate and to act ethically to the society even though operate the business overseas.3.3.2 Market DriversAs the market leader in the office furniture industry, Herman Miller has understood the common customer preference towards the company products. Due to these factors, it help the company to gain a huge number of customer over hundred countries and wholly owned subsidiary company at Canada, France, Germany, Japan, Mexico and so on (Shipper,et al. 2012).3.3.3 Cost DriversBy establish the Herman Miller Production System (HMPS) allow the company to maintain the efficient and cost saving through the inventory control (Shipper,et al. 2012). It is because the system helps the company to minimizing the inventory level on hand and the just-in-time process. Therefore, when this system use in other countries, it will make the company operating in effective and efficiency.3.3.4 Competitive DriversDue to threat of entry is high and the increase rivalry among existing competitors, it makes Herman Miller more productivity and innovative in order to operate their business overseas for gaining the market shares. Besides, it also helps the company to build up the reputation of the customer towards the brand of the company.

4. Internal Assessment of Company4.1 Value Chain Analysis (VCA)It adapted from Pearce II, JA & Robinson (2013), it can divided to:4.1.1 Primary Activities4.1.1.1 Inbound LogisticsHerman Miller had efficiency of raw material warehousing activities by using its own system such as Herman Miller Performance System (HMPS). This system helps in managing, controlling and storing inventories or raw materials of Herman Miller.4.1.1.2 OperationHerman Miller used Herman Miller Performance System (HMPS) to maintain efficiency and cost saving by minimizing the amount of inventory on hand through a just in time process. Therefore, it assist the company to limit fixed production cost by outsource components parts from supplier and retain control over production processes (Karen, M 2012, p338).4.1.1.3 Outbound LogisticsHerman Miller has implemented planning software-HMPS to improve their production scheduling and delivery with the specific goal. Moreover, it allows the company to querying about the completion date of each plant about the time taken in building an ordered item. It also is one of the appropriate automation of production processes which speed up productivity (McGraw 2003, p34).Moreover, it established 180 retailers which digitally linked among the company and its suppliers, distributors, and customers. Therefore, it can reduce the shipping time because it will be deliver once the product is built and take between 3 to 10 business days (Herman Miller, 2014).4.1.2 Support Activities4.1.2.1 Human Resource ManagementHerman Miller has put a lot of effort in attracting and retaining the employees with talents. Besides, it also implement a principle of equity and justice for everyone in the company called Scanlon Plan, it use of committees for sharing ideas on improvements and a structure for sharing increased profitability. Furthermore, employees not only receive a base pay, they also will receive the profit sharing plan based on companys financial performance. As a result, it can increase the level of employee motivation and job satisfaction (Karen, M 2012, p333).4.1.2.2 Research, Technology and System DevelopmentHerman Miller used Herman Miller Performance system to maintain efficiencies and saving cost through minimize the amount of inventory stored. Meanwhile, Herman Miller is subsidiary to Integrated Metals Technology (IMT) analyzing, inquiring, and enlisting help and ideas of everyone. Hence, it reduce quality defect from 9,000 in 2000 to 1,500 in 2006. Furthermore, the shipping improves from 80 percent to 100 percent. Lastly, safety incidents dropped from 10 to 3 per year (Karen, M 2012, p338).4.1.2.3 ProcurementThere are few ways that developed by Herman Miller to reducing its cost in procuring raw materials by using timely basis like JIT, at lowest possible cost (HMPS), and using acceptable level of quality such as walnut and cherry woods.Thus, it has a 300,000 square foot distribution centre that used for shipping, receiving, warehousing, fabrication and logistics services as well as a Green House which around 295,000 square foot factory and office building near its headquarters in Western Michigan (William, M & Michael, B 2007).4.2 Resource Based ViewThe unique capabilities of Herman Miller (refer to appendix) are:4.2.1 Leadership and CultureD.J. De Pree is a capable leader that the group he led have a strong and adaptable culture. The culture of the company is focusing on Corporate Social Responsibility and Environmental Friendly. Herman Miller Inc. was control by Hermans family members. He encourage employee to involve in corporate social responsibility. In the same time, it creates another culture for the company. The other unique capabilities of Herman Miller are the company culture whose take care about the environment friendly (Karen, M 2012, p337).4.2.2 NetworkA network of 180 retailers have been established and established dealers in South and Central America, Australia ,Canada ,Europe ,Africa and Japan (Karen, M 2012, p334). Moreover, products were sold internationally by wholly owned subsidiary. The customer based was spread over 100 countries (Karen, M 2012, p338).4.2.3 Innovative ProductInnovative product for Herman Miller is the first molded fiberglass chairs and the Eames lounge chair and ottoman. In addition, it was the first one began overseas foray, selling its product in the European market (Karen, M 2012, p333). Next, the Equa chair is based on the ergonomic principles. Moreover, some groundbreaking designs introduced the Aeron chair. Aeron chair won the Design of the Decade Award (Karen, M 2012, p334).Other than that, Mirra chair is introduced in 2003 with Posture Fit Technology. Mirra made of 45 percent recycled materials and 96 percent of its materials were, in turn to recyclable. In addition, 100 percent of renewable energy has been used (Karen, M 2012, p338). Moreover, the Office Automation System in 1960s is the first world open modular office arrangements (Karen, M 2012, p333).4.2.4 SystemMoreover, Herman Miller has it software (HMPS) to plan and produce furniture with same quality for every product. By the way, just in time also apply to Herman Miller that controls the inventory level. In addition, it helps the company to save cost (Karen, M 2012, p338 - p339).4.2.5 Substitute WoodHerman Miller Inc. also seeks for substitute wood. For example, they replace the rosewood with walnut and cheery woods because those woods are cheaper (Karen, M 2012, p334).4.3 Financial Analysis4.3.1 Liquidity RatioThe current ratio of the Herman Millar has constantly increased from 2006 to 2009 but it still not able to achieve 2:1 and less ability to meet its short-term obligation. For current ratio of 2010, it has dropped to 1.26. It may due to lower cash and cash equivalents, and increase in current maturities of long-term debts. Besides, the results of acid test shows that the Herman Miller is able to meet its short-term obligation without rely on inventories.4.3.2 Activity RatioHerman Millar has a stable in days of inventory turnover which average in 12 to 16 days in 2006 to 2009 but in 2010, it has increased double to 24 days to clear its inventory and decreased in inventory turnover to 15.38 times. It may due lower sales in 2009 because of the recession of 2009 which the economic still in bad condition in 2010. Profits dropped from $152million to $68million. In other word, the sales dropped lead to slower inventory turnover. Besides, the average collection period has also effected by poor economic condition in 2009 and it need to take longer time to collect the credit sales.4.3.3 Leverage RatioDebt-to-equity ratios and long-term debt-to-equity ratios have risen precipitously in 2007 to 2009. This is because the total stockholders equity has dropped seriously in 2007 to 2009. The factors influence in 2008 is reduction of retained earnings due to adoption of FIN 48 for unrecognized tax benefits. For 2009, accumulated other comprehensive loss has affected total stockholders equity dropped double with included foreign currency translation adjustment ($14millions), pension liability adjustments ($59.9millions) and unrealized holding loss ($0.1millions) in 2009.4.3.4 Profitability RatioThe operating profit margin and net profit margin has dropped constantly from 2008 to 2010 due to sales of the Herman Miller has dropped due to the economic recession. Another reason is U.S. dollar strengthened against most major currencies throughout fiscal 2009 and 2010 indirectly influences the sales in others countries. (Financial Statement of Herman Miller, 2009)5. Key Strategic Issues5.1 EconomyDue to recession in 2009, Herman Miller sales were dropped 19 percent. The sales is dropped from approximately $2.0 billion to 1.6$ billion in the year 2008 and 2009 respectively. The profit of the year 2009 was dropped from $152 million to $68 million (Shipper, 2012). Herman Miller was laid off from 500 to 1000 employees due to economy down in year 2009 (Julia, 2009).5.2 Intense competitionIn furniture industry, Herman Miller is facing the threat from competitor which is Haworth, Steelcase and HNI Corporation. Some of these competitor offer the furniture product that cheaper than Herman Miller. It is affecting sales for their furniture. HNI Corporation have offer Stoves Furniture while Herman Miller does not produce (Nicholas, 14 December 2009).Referring to the Appendix ()5.3 Foreign ExchangeHerman Miller Inc. has run its business outside the United Stated. Therefore, it will face some risk in foreign exchange rate while in trading products. In some countries, the currencies are differing in import and export products. Besides, the fluctuations in the rate of exchange between these currencies could negatively impact to Herman Miller. It also had brought an impact to the international operational expense (Herman Miller, 2014).6. Discussion6.1 Vision & MissionThe vision and mission of Herman Miller company is quite confused due to it is vague. It is because two of the vision and mission is quite similar. Therefore, it will cause the members in the company confusing in on what are the things they need to achieve in the future.6.2 Costs of Environmental AdvocacyTaking the initiative for corporate social responsibilities is one of the important components for the company. However, it will lead to high prices in the end products. Due to the price increase, it may cause a substantial drop in the sales. Besides, when the company keep on conducting the CSR activities and did not concern to the shareholders interest, it will cause the member of the company unhappy. 7. RecommendationThe strategies that suggested to Herman Miller is grand strategic. It is because it help the company to solidify its position by reinvesting their resources to increases the companys strength. Among two alternative approaches which are market development and product development, the company can choose to use product development, which the customers may be interested for the products that based on technological, or other competitive advantages. In order to practice these product developments, the company can expand its healthcare product by offering patient beds. There is sophisticated technology that is deviates from traditional products of Herman Miller. Company may focus on offering full patient room solution. By providing this, it may improve its attractiveness to strong healthcare dealers in the market. Since the bid cycle is long due to the extended live of a product. In addition, Herman Miller may seek to average the sale. Free cash flow for company can let them to utilize the cash and invest to a new product. By entering to healthcare segment, it may also help company to diversify its revenue to a stable and growth industry.Besides using the market development strategies, the company also can apply other solution such as

7.1 EconomyTo overcome bad economy conditions, the company may have contingency plan therefore they may not face any problem when recession occurs. 25 % of profit should be keeping as retained earnings. Other than that, when the economy is bad, it can cut down their employee cost by 10 % for that period. Retrenchment should be implementing if they have no choice.7.2 Intensive CompetitionHerman Miller may focus more on the healthcare segment and try to developed new product for healthcare segment. Herman Miller should improve their diversification and pay attention on healthcare segment because of healthcare industry show steady growth from year 1989-2007(Nicholas et al, 2009). By doing so, the company can minimizing the intensive of the competition7.3 Commodity future contractBy avoiding the production cost increase due to material price increase, Herman Miller can use commodity future contract to fix the materials price in the future. The company must have foresight with the price floatation of materials to predict the future prices to avoid purchasing higher price in the future. But it must get consent from the supplier by bargaining the price fixed in the contract.7.4 New Vision and Mission StatementThe companys vision must be some phase which will monitor and motivate the member in the company towards the future strategies. Therefore, the company new vision statement should be easy to communicate, it mean the members of the company can easy to understand, simple, short and precise on what it is. The recommended new vision statement should be Herman Millers Modern Furniture to EveryoneBased on the Mission statement which stated on above (Section 2.1), a better mission statements should be explain the companys business makeup and purpose in language specific, so that it can help the company to differentiate themselves from competitors. Therefore, the recommended new mission statement should be To achieving by take care the society as well as environment7.5 Corporate Social Responsibility ActivityRegarding to the CSR, the company should continue to practise the CSR activities, at the same time, the company should disclose the entire shareholder, so that the shareholder can know well about what are the company is doing. Other than that, the company should also listen to the shareholders voice to minimizing the misunderstanding or dissatisfaction on the CSR activities.8. ConclusionHerman Miller Incorporation is the leaders in the office furniture industry, and over the year, the company had gain through a high reputation that the customer towards the company. Today, Herman Miller can become so success in the furniture industry, is because they not only take care to the society but at the same time it also take the initiative to conduct the corporate social responsible. Therefore, the companys long term objective have been listed that few way to achieve such as (1) environment advocacy, (2) innovation, (3) quality, (4) performance, and also (5) market growth.Herman Miller is facing the difficulties to overcome the problem which come from the external environment as well as the internal environment. The company had facing the hard-time during the financial crisis which occurs in 2008. Besides that, the company is facing several problems such as economy downturn, intense competition, and foreign exchange. In term of operation, the companys vision and mission statement and the company aggressive in doing the CSR activities was also the problem of the Herman Miller.However, the grand strategy of the company is more towards the concentrated strategies which include product development and innovation. After the analysis the problem, we had recommend few solution to overcome the problems that the company facing.