Herman Millar Inc.

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Question: How strong are the competitive forces in the furniture manufacturing industry? Do a five-forces analysis to support your answer. Answer: Although Herman Miller company is one of the largest office furniture manufacturers in the world, it competes with several manufacturers that have greater resources and sales as well as many smaller companies. In the United States, the company's most significant competitors are Haworth, HNI Corporation, Kimball International, Knoll, and Steelcase. Five forces analysis

Intensity of rivalry
The office furniture manufacturing industry market in the United States is very competitive since many companies offering similar products. Companies compete primarily on price, product and service quality, differentiation, design, speed of delivery and customer service. Firms compete within each market segment and are pressured by growing competition from overseas manufacturers particularly from China and Vietnam. Six manufacturers-Steelcase, Herman Miller, Haworth, HNI, Kimball International and Knoll-account for approximately 60% of the U.S. office furniture market. The remainder of the market is captured by a large number of small and privately owned businesses that successfully supply the local community's retail demand. The large number of existing companies definitely shaped the landscape of the Chinese market competition. Furniture manufacturing industry concentration has increased in last couple of years because many operators have gone out of business. Following the downturn of US economy, high unemployment rates, have created an intensely competitive environment for existing players; faced with low margins and volatile input costs, many underperforming operators were forced to exit the market. However, as the economy will recover, demand for new office furniture is expected to increase, expanding the number of companies over the five years to 2016.

In conclusion, the intensity of rivalry is moderately high....
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