Netflicks Case Analysis

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Table of Contents
Strategy:| |
Issue 1 | 3|
Strategy 1| 3|
issue 2| 4|
strategy 2| 4|
Issue 3| 4|
Strategy 3| 5|
Appendices| |
Appendix A: External Environment 1. Key economic and industry variables (A-1) 2. Porter’s 5F analysis (A-2) 3. Key drivers for the industry (A-3) 4. A positioning map of the industry (A-4) 5. KSF’s in the industry (A-5) 6. Conclusion about the attractiveness of the industry (A-6)| 6667777| Appendix B: Internal envernment 1. Herman miller’s strategy (B-1) 2. Herman miller’s vision and mission/purpose (B-2) 3. Functional strategies (B-3) 4. Herman miller’s value chain and competitive advantage (B-4) 5. Herman Millers attention to the 10 components of strategy 6. Financial analysis (B-5) 7. SWOT analysis (B-6) 8. Competitive Strength Assessment (B-7) 9. Issues that herman miller should address in the suggested strategy (B-8)| 7788889101010|

strategy

Issue 1: The current economic downturn and the state of the credit markets in the U.S pose a prominent risk of prospective bankruptcy among Herman Miller’s (HM’s) customers, resulting in a larger risk of uncollectible outstanding accounts receivable. According to HM’s consolidated balance sheets for fiscal years 2010, the company has a book value of $144.7 million as account s receivable, which accounts for 37 percent of the company’s current assets. The amount of account receivable reduces the company’s liquidity ability and exposes the company to the risk of bad debts. Moreover, demand for office furniture is greatly influence by macroeconomic factors such as white-collar employment, corporate profit, and commercial office construction. Therefore, persistent downturn in the global economy not only affects the company’s account receivables collectability, but also impact on its customers’ ability to sustain financial health. For example, losses of key contract customers within specific industries could reduce revenues and profitability and increased the firm’s bad debt. Therefore, the continuing success of HM is highly dependent upon collection of its $144.7 million of accounts receivable, and on the financial health of its customers and the economic climate.

Strategy 1: Although, Herman Miller cannot predict the timing or the duration of any downturn in the U.S economy with certainty, there are some opportunities that can still be exploited. The company could offer various sales incentive programs to existing customers through the use of rebates, discounts and in unique financial circumstances may offer alternate payment solutions. However, such incentive programs have minimal impact on cash management. In order to offer greater value to its customers and sustain financial health, the company needs to continuously improve its internal operations. This can be accomplished by the further employment of lean practices focused on reducing and in some instances eliminating waste, which would translate into reductions in operational costs. These savings can then be passed on to Herman Miller's customers, thereby, providing direct assistance to its customer base in managing their costs, more efficiently. Issue 2: Globalization of business, and advances in technology such as telecommuting had changed workforce demographics and change in work styles. There is a reduction in the need of the typical workstation, and a growth in work arising in more collaborative settings as well as intense competition among suppliers of office furnishings. Furthermore, the company’s core markets include office furniture solutions that focused on furniture solutions for larger commercial offices. HM must identify a strategy to expand its customer base, and product portfolio to gain market share in the mid-market, less complex and lower cost aspect of the office furniture market. Strategy 2: HM’s brand is acknowledged as one of the top market leaders in office furnishing and this success has been built...
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