Distinctive competencies and competitive advantages What distinctive competencies has Herman Miller built over the years

to achieve competitive advantages? How sustainable are the distinctive competencies of the company? Distinctive competencies are the unique capabilities of firms which differentiat e the firms from rest of their competitors. Simply to say, they are those things which a company has and its competitors do not have. They are rare things. On t he other hand, competitive advantages are those advantages which assist firms to compete over their rivals in the market. The companies which are able to come u p with the distinctive competencies may have more competitive advantages over re st of its competitors. In the case of Herman Miller, the company has built various distinctive competen cies from the time of Dee Pree to present which have given the company competiti ve advantages over its rivals. Those unique competencies of Herman Miller are in novation, reinvention, renewal, different thinking (philosophy), organisational culture, research and development, and human resources. Innovation at Herman Miller is noticeable in terms of design (antithetical desig n), products (Aeron and Equa chairs), ideas (ergonomic principle), and process ( adoption of technology in production). Another capability of Herman Miller (HM) is to reinvent products. According to the case there is information given that H M has reinvented some of its modern classic designs from 40s, 50s, and 60s to fo cus on residential market. Furthermore, HM renews its products by using recycled materials as given information in the case the issue of Mira chairs can be take n. Mira chairs are built from 45% recycled materials, and 96 % of its materials are recyclable. In addition, it is assembled using 100% renewable energy. Anothe r notable thing with HM that is different from rivals is their belief. They beli eve that customers health is more important than looks of furniture so they desig n product giving priority to usefulness. Another excellent thing they have is th eir culture. They treat their workers as their assets. They make them participat e in happy and sorrow moment. If the firm is in downturn, they cut their salary and when they recover they provide them back. Senior staff members sacrifice mor e than juniors. When company make extra profit, they share. Amazing thing is the ir workers are so supportive and loyal to the company. Even at time of company c ut workers, they support instead of doing strike or other things. The above mentioned things which are not with their competitors have given lots of competitive advantages to the company. The first advantage is company has bee n able to increase profitability. Another thing is the company has got wonderful reputation in the world. Customers have the good attitude towards the company a nd its product. Not is that only, the company has been nominated as most innovat ive company for couple of years. The company has been known as one of the best c ompany to work, and awarded as the most admired company by different means of me dia. From the information available in the case, it is clear that company is keep on focusing in innovation and continuing it. HM has very positive and supportive cu lture. Human resources are so loyal and they are very positive toward company. T he belief what the company has is quite unique in the industry. The company has support from the societies as company has contributed lots for society in the ma tter of environment and health wise. Looking at those competencies of the compan y, they are quite distinctive and not easily imitable. So, there is no doubt, th ey will sustain longer period time. Business strategy, situation analysis and consequent strategy modification Business strategy Business strategy is a long term plan made by firms regarding achieving their ob jectives or goals. The main propose of the business firms are delivering value t o targeted customers. Until and unless the firms create and deliver value to cus tomers; their products or services are not sold in the markets. Before it they c

annot even imagine of profit. So, for all, company needs to make a long term pla n in terms of how to compete with competitors. Thats why; firms should plan for b etter pricing, placing, promoting, etc. so that the company could offer comparat ively better value. Making a plan for these all comes under business strategy. A well planned business strategy can provide more competitive advantages over its rivals. When customers find more advantages compared other available same kind of products, they are likely to purchase them. Besides these, planning for tackl ing with new entrances, chances of being products substituted by the competitors products, emerging different threats, grabbing the opportunities available in th e market all come under business strategy as well. Business strategy of HM While looking at HM, company is dedicated to create and deliver value to its cus tomer from their superior product. They have strategy working with excellent des igners so far available in the market so that they can provide excellent value t o their target segments. Another thing is that they have the strategy of sustain ing their competitive advantages for longer period as well. For that they have b een focusing on research and development as evident by even they invested for re search and development program in the critical period too. Further, they are app roaching market through product development strategy, and they have market devel opment strategy as well. On the other hand, they have diversified the through ma inly vertical integration. They have the followed differentiated strategy in ter ms of targeting segments as evident by they are have different products and for different segments such as residential market, office market and health/science market. Situation analysis Situation analysis is a method which is used to analyse both the internal and ex ternal environments of an organization in order to understand the firms own capab ilities, customers and business environment. The situation analysis can be done using different ways such as using SWOT, 5Cs, Porters five forces etc. From the S WOT, the firms strength, weakness, opportunities and threats can be identified. 5 Cs provides ideas about company, competitors, customers, collaborators, and clim ate. On the same way, Porters five forces gives the information about the threat of the new entrance, bargaining power of consumers, bargaining power of supplier s, threat of substitute of products, and rivalry among existing competitors. Bes ides these situation can be analysed through looking at environmental factors su ch PESTLE, drivers of competitors etc. Situation analysis of HM SWOT Analysis: Strength: leading market position, well-known brand name, excellent R&D, innova tive and user friendly products, excellent organisation culture and HR, wide and diversified channels Weakness: overdependence in US furniture industry, cost structure Opportunity: Financial leverages, online market, emerging markets, innovations, new products, new markets etc. Threats: high competition, time to time economic crises (bad economy), political risk, volatile costs, substitute products etc Porters 5 Forces Analysis: Threat to new entrance: medium to high Substitute of product: high Bargaining power of suppliers: high Bargaining power of customers: high Rivalry among competitors: high While looking at environmental factors, the trend shows that economical factors such as recession has impact positively as well as negatively as evident by when economy booms HM booms as well, when it goes down, it has gone down as well. En

vironmental factors are supportive for the company. The technological factor is also supportive for it as it can go online. While looking at the situation of company, the company looks like it will have g ood situation as back up by its distinctive competencies. Consequent strategy modification While looking at the HM, the firms situation has not been always same. Though it has been most of the time in profit but it had to face some bad moments as well. In that case, HM has modified its strategies to suite the situation. As in 200 3, the company had been in problem because of economic downturn caused by sep. 2 011. To save the company, management has done consequent strategy modification a t that time. The strategy adopted was the cut of staff and close of one manufact uring plant in Georgia, USA. Not is only that later coming in 2009, again the co mpany has cut staffs and modify the strategy in reimbursement etc. Moreover, com pany has acquired another company to save the situation from downturn situation as well. International strategy for enhancing performance in oversees market International strategy refers to the strategy that company plans for long term s uccess in international market which helps to accelerate performance of the busi ness if it well planned. It is also related to how to tackle market, what segmen ts to choose it they have not gone, how provide better value to customers, how t o sustain longer, what marketing strategy to follow, how much to invest, to as a wholly subsidiaries, joint venture, FDI, or how, to do production in foreign ma rket as well or supply from home country, how to supply, through Just in Time or how etc. It is almost like same in business strategy in home country but there is something extended as the company need to make about to tackle local market, meaning how to employ workers, all from local market or to take some from home country, and many things. While looking at the international strategy at HM, the company has entered in ov ersees market through wholly subsidiaries system first. Then later, it has opene d dealers. First it sold products only, but later it has started production in d ifferent parts of world. First it chose European market and it has been able to enter and do business in Asian market as well. As in home country, the company i s targeting the same segments like offices, health related facilities and reside ntial customers. Moreover, HR has been trying to enhance its performance through innovative, rein vented, and renewed products as it does for countrys customers. It has made the strategy to include employees working in overseas outside production as well so made participated them in Scanlon Plan. HR has not differentiated the national w orkers and oversees workers benefits. Furthermore, the company has diversified its product for international market th rough vertical integration. Though it has not been given in the case, the compan y adopted the strategic alliance with a Chinese company called Posh for designin g ideas from 2008. The external environment and implication on strategic decision All outside factors that may affect an organization are the external environment . They may affect in positive way or negative way. Similarly, their impact may b e very quickly noticeable or may be slow. Those factors can be political, legal, societal, technological, economical etc. Because of these factors strategic dec ision may get also influenced. Or, sometime it may be necessary to change as wel l. In the case of HM as well, the company definitely has the probability to get inf luenced from the above mentioned factors or may have already influenced. From th e study it is very obvious that the company has been affected by economical fact or many times in its past in both way. When the USA was facing economic downturn from very bad recession as in 2001- 2003 or in 2008 -2009, company has been aff

ected in a negative way as companys sales and profit has gone down badly due to w hich the company has been compelled to cut off many staff as well as close down the production plant in the USA. It has impacted in companys strategic decision a s evident by company has to go for acquisition with Meridian Company. On the con trary, at the time of booming economy, the company has boomed. Another example of the effects of external environment is the influence of techn ology in the world and because of that adoption of technology in HR as evident b y companys online sales, order connecting from computer software as mentioned in the case. But in the case of problem of in the technology or software, the compa ny will be affecting negatively. In the same way the world is worried for global warming. People are talking to save environment. For this HR has shown lots ini tiatives and done many things for it so it has got attitude of society and custo mer. While trying to look as differently, upon the case of destruction of jungle , HR will be suffering as they will have no wood left or very less to use in the ir furniture. In the same way political, legal and societal factors may be barrier or supporti ng for affect making strategy or already made strategy. Beside these factors, other factors also affecting business such as shareholders , customers want and demand, competitors and nature of competition, suppliers, em ployees and trade unions etc due to which made strategy is being supportive or required to change and think of new one. In the case of HR, nature of competitio n is being intense, the company seems to be making the strategy of focusing in R & D so that they can make innovative products and can sustain longer in the mar ket. Another thing is that to meet the customers changing want and taste, the com pany seems to be adopting the strategy of vertical integration. Anyway, it is obvious that external environment affects the strategic decision a s well. Innovation and business growth, critical factors for success Competences, resources and strategies for continued success and how to build, pr ocure and sustain them