Herman Miller (B): Creating Innovation Streams SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Herman Miller (B): Creating Innovation Streams
To maximize their effectiveness, color cases should be printed in color.In 1997, Mike Volkema faced the difficulty of attempting to revitalize a once dynamic organization. Volkema wondered how he could incorporate advances made within subsidiaries, such as Miller SQA's business model innovation, into the company as a whole while also reinvigorating the product focus that had made Herman Miller great. This case details Herman Miller's development of business model designs for each of its target market segments and the evolution of its famed cubicle office system to a new design for the twenty-first century. Herman Miller's traditional focus on product design has been supplemented by a new focus on targeted business models. Students can analyze the changes, including market expansion, reintegration of the fragmented value chain, and sharing capabilities throughout the organization that Volkema introduced to redirect the firm toward greater growth. The details of customer-oriented business model design are examined. Concludes with a series of issues for organizational processes and structures to enable a firm to manage innovation on multiple fronts. Includes color exhibits.
Swot Analysis of "Herman Miller (B): Creating Innovation Streams" written by Sandra J. Sucher includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Herman Volkema facing as an external strategic factors. Some of the topics covered in Herman Miller (B): Creating Innovation Streams case study are - Strategic Management Strategies, Design, Organizational culture, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Herman Miller (B): Creating Innovation Streams casestudy better are - – challanges to central banks by blockchain based private currencies, geopolitical disruptions, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , there is increasing trade war between United States & China,
increasing government debt because of Covid-19 spendings, increasing energy prices, etc
Introduction to SWOT Analysis of Herman Miller (B): Creating Innovation Streams
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Herman Miller (B): Creating Innovation Streams case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Herman Volkema, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Herman Volkema operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Herman Miller (B): Creating Innovation Streams can be done for the following purposes –
1. Strategic planning using facts provided in Herman Miller (B): Creating Innovation Streams case study
2. Improving business portfolio management of Herman Volkema
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Herman Volkema
Strengths Herman Miller (B): Creating Innovation Streams | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Herman Volkema in Herman Miller (B): Creating Innovation Streams Harvard Business Review case study are -
Effective Research and Development (R&D)
– Herman Volkema has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Herman Miller (B): Creating Innovation Streams - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Technology & Operations industry
– Herman Miller (B): Creating Innovation Streams firm has clearly differentiated products in the market place. This has enabled Herman Volkema to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Herman Volkema to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Herman Volkema has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Herman Miller (B): Creating Innovation Streams HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Herman Volkema is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Herman Volkema has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Innovation driven organization
– Herman Volkema is one of the most innovative firm in sector. Manager in Herman Miller (B): Creating Innovation Streams Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Technology & Operations field
– Herman Volkema is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Herman Volkema in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Herman Miller (B): Creating Innovation Streams Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Herman Volkema is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Herman Volkema is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Herman Miller (B): Creating Innovation Streams Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Herman Volkema in the sector have low bargaining power. Herman Miller (B): Creating Innovation Streams has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Herman Volkema to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Herman Volkema in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Herman Volkema
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Herman Volkema does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Herman Miller (B): Creating Innovation Streams | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Herman Miller (B): Creating Innovation Streams are -
No frontier risks strategy
– After analyzing the HBR case study Herman Miller (B): Creating Innovation Streams, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Herman Volkema has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Herman Miller (B): Creating Innovation Streams should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Herman Volkema products
– To increase the profitability and margins on the products, Herman Volkema needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Herman Volkema has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Aligning sales with marketing
– It come across in the case study Herman Miller (B): Creating Innovation Streams that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Herman Miller (B): Creating Innovation Streams can leverage the sales team experience to cultivate customer relationships as Herman Volkema is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Herman Volkema needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Need for greater diversity
– Herman Volkema has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Herman Miller (B): Creating Innovation Streams has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Herman Volkema 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Herman Volkema is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Herman Miller (B): Creating Innovation Streams can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Herman Volkema, firm in the HBR case study Herman Miller (B): Creating Innovation Streams needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Herman Miller (B): Creating Innovation Streams, in the dynamic environment Herman Volkema has struggled to respond to the nimble upstart competition. Herman Volkema has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Herman Miller (B): Creating Innovation Streams | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Herman Miller (B): Creating Innovation Streams are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Herman Volkema can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Herman Volkema can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Herman Volkema has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Herman Miller (B): Creating Innovation Streams - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Herman Volkema to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Herman Volkema to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Herman Volkema can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Herman Miller (B): Creating Innovation Streams, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Herman Volkema is facing challenges because of the dominance of functional experts in the organization. Herman Miller (B): Creating Innovation Streams case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Herman Volkema can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Developing new processes and practices
– Herman Volkema can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Herman Volkema has opened avenues for new revenue streams for the organization in the industry. This can help Herman Volkema to build a more holistic ecosystem as suggested in the Herman Miller (B): Creating Innovation Streams case study. Herman Volkema can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Herman Volkema can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Herman Volkema can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Herman Volkema can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Buying journey improvements
– Herman Volkema can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Herman Miller (B): Creating Innovation Streams suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Herman Volkema can use these opportunities to build new business models that can help the communities that Herman Volkema operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats Herman Miller (B): Creating Innovation Streams External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Herman Miller (B): Creating Innovation Streams are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Herman Miller (B): Creating Innovation Streams, Herman Volkema may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Stagnating economy with rate increase
– Herman Volkema can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Herman Volkema.
Shortening product life cycle
– it is one of the major threat that Herman Volkema is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Herman Volkema business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Herman Volkema high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Herman Volkema needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Herman Volkema with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Herman Volkema needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Herman Volkema in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Herman Volkema can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Herman Miller (B): Creating Innovation Streams .
Weighted SWOT Analysis of Herman Miller (B): Creating Innovation Streams Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Herman Miller (B): Creating Innovation Streams needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Herman Miller (B): Creating Innovation Streams is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Herman Miller (B): Creating Innovation Streams is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Herman Miller (B): Creating Innovation Streams is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Herman Volkema needs to make to build a sustainable competitive advantage.