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|===Marketing Strategy===||===Marketing Strategy===|
|-||Steelcase offers a wide variety of products to their consumers. Their products range anywhere from interior architectural structures including furniture and building materials, to technology and health care. [[Image:scsproduct.jpg|230px|left]]Steelcase's architectural solutions integrate style and technology to provide an effective workplace with maximum flexibility. A modular building system allows for movable walls that are easy to build and simple to change. Steelcase offers interior solutions for virtually any environment. From the workplace including at the office or in a hospital, to at home or in a school, Steelcase offers it all. Steelcase offers a comfortable seating solution for any setting that enhances style and productivity in a multifunctional chair. Complimentary, Steelcase also offers table solutions for conference rooms to outdoor patios. They also offer storage solutions that include shelves and cabinets. Their educational segment includes the desks and chairs mentioned above with the addition of an interactive whiteboard which is a glimpse of the future from the traditional blackboards. Steelcase has also made a push in the health care industry to provide furniture solutions to not only patients but also doctors and nurses.||+||Steelcase offers a wide variety of products to their consumers. Their products range anywhere from interior architectural structures including furniture and builImage:scsproduct.jpg|230px|left]]Steelcase's architectural solutions integrate style and technology to provide an effective workplace with maximum flexibility. A modular building system allows for movable walls that are easy to build and simple to change. Steelcase offers interior solutions for virtually any environment. From the workplace including at the office or in a hospital, to at home or in a school, Steelcase offers it all. Steelcase offers a comfortable seating solution for any setting that enhances style and productivity in a multifunctional chair. Complimentary, Steelcase also offers table solutions for conference rooms to outdoor patios. They also offer storage solutions that include shelves and cabinets. Their educational segment includes the desks and chairs mentioned above with the addition of an interactive whiteboard which is a glimpse of the future from the traditional blackboards. Steelcase has also made a push in the health care industry to provide furniture solutions to not only patients but also doctors and nurses.|
Steelcase. is an international office furniture company based in Grand Rapids, Michigan. It is a global, publicly traded company leading our industry with fiscal 2010 revenue of approximately $2.3 billion dollars and nearly 13,000 employees around the world. .
Steelcase Inc. is an international office furniture company that was founded in 1912, in Grand Rapids Michigan.. The company is primarily in North America, Asia, and Europe. The company offers a large variety of products and furniture inspired by nearly 100 years of insight gained. Steelcase has over 650 dealers and bases their designs on social, economic, and environmental sustainability. Steelcase Inc. is made up of three core brands, Steelcase, Turnstone and Coalesse. The primary focus of the core three brands is in the office furniture segment, but Steelcase Inc has started to serve the healthcare, education, and distributed work industries. The company also offers visual communication products, web-based communication tools and surface materials primarily to architects and designers for use in business, residential, healthcare, and hospitality applications. Steelcase Inc. wants to grow their company by offering solutions for new ways of working, new customer markets, and new geographies. Steelcase Inc. markets their products through a group of independent and company owned dealers. Steelcase Inc. became a publicly traded company in 1998. They employ 11000 workers and in 2010 had revenue of approximately $2.3 billion dollars. .
1912- Founded in under the name, The Metal Office Furniture Company.
1914- Received first patent for a steel wastebasket
1954- Changed name to Steelcase, which was a brand name of The Metal Office Furniture Company.
1972- Enters the wood office furniture market
1974- Forms a 50% joint venture interest with Forges de Strasbourg to manufacture seating in France.
1985- Acquired Stow & Davis Furniture Company
1998- Became a publicly held company trading on the New York Stock Exchange under ticker symbol SCS.
2001- Steelcase’s wood furniture factory became the world’s first manufacturing to receive LEED certification
2006- Steelcase international opens its new headquarters in Strasbourg France.
2008- Steelcase announced its commitment to purchase all of their renewable energy credits from a United States wind farm. This is the first time a corporation had made an upfront commitment like this.
2010- Steelcase announced it would only be using bio-based packaging material that uses 1/10 of the energy that it takes to produce normal packaging..
North America Segment-- Serves customers in the United States and Canada. Marketed to corporate, government, healthcare, education, and retail customers through several Steelcase Inc brands. Mainly serve customers through 230 independent and company owned dealers, but also sell directly to end-use customers. The healthcare, government and higher education represented approximately 38% of 2010 North America revenue.
International Segment-- Serves customers outside of the U.S and Canada. Their largest presence is in Western Europe, where they have leading market share in German, France and Spain. As of 2010 70% of international revenue came from Western Europe. No individual company represents more than 8% of the international revenue.
Other-- This category includes the Coalesse Group, PolyVision and IDEO. The Coalesse group is made up of Coalesse and Designtext brands. IDEO is an innovative and design firm used to generate new offerings and build new capabilities for its customers..
Steelcase Inc offers many different brands. Their brands offer a variety of furniture systems and seating. Their furniture is offered in panel based, and freestanding systems, as well as products such as storage units, tables, and work tools. Their seating products include chairs for specific markets such as healthcare and education. They also have interior architectural products to help decorate home. Steelcase Inc has technology solutions and also offers services to help enhance performance and reduce costs. Below are the different brands offered by Steelcase Inc.
Steelcase-- Core customers are leading organizations (such as corporations, colleges, government entities) that are often large and have complex needs. Within this brand are two sub categories
Turnstone-- Makes it easy for emerging companies to create a new workspace. Provides simple solutions for complex problems of emerging companies through thoughtful products and solutions..
Coalesse-- Collaborates with some of the world’s best brands to create inspired solutions that challenge generic approaches to home and office environments.Their Key clients are designers and architects. Coalesse’s customers expect premium performance that can be used at home and as well as a professional office. The name Coalesse signifies coming together.
PolyVision-- With over 100 years of commitment, it is one of the most sustainable organizations in the world. Tries to understand the needs of K-12 teachers and students and develop tools that create a better learning experience for students. This brand also includes interactive electronic whiteboards, and educational software. .
Steelcase Inc. is an international office company that is engaged in the design, manufacture and marketing of office furniture and related products and services. The company has strengths in terms of its strong foothold in the North American market and its comprehensive product portfolio. During the economic downturn, the company has undertaken several restructuring activities to reduce costs and taken the initiative to strengthen its presence in the emerging markets. However, the intensity in the market and the bleak economic outlook are the factors in stalling the firm's growth.
The company's improved financial performance for the fiscal year ended February 2011 presents a promising prospect for the company. The net income of Steelcase increased from a net loss of $13.6 million in 2010 to a positive net profit of $20.4 million in 2011. .The dramatic improvement in its financial performance was driven by operating leverage from organic revenue growth across all segments as well as a number of restructuring activities. .In addition, the company focuses on cost reduction. Its cost of sales as a proportion of sales was reduced, while the growing revenue was still maintained. The cost reduction effort allows the company to improve its return on assets and return on average equity from -0.8% and 2% respectively in 2010 to 1.02% and 2.8% respectively in 2011.. The continued strong financial performance would enable to company to compete against competitors and survive this sluggish economy.
Steelcase operates on a worldwide basis through its North America and International segments. A strong market position across these geographical segments gives the company a competitive advantage over its competitors. In its North America segment, the company focuses on customers in the US and Canada by offering them the Steelcase, Turnstone, Details and Nurture by Steelcase brands, through approximately 220 independent and company owned stores and direct selling.. In the international market, Steelcase has its largest presence is in Western Europe, where it has the leading market share in Germany, France and Spain. The company has a global manufacturing base spread across America, Europe, Asia, and Middle East & Africa. Steelcase serves the International customers by principally offering Steelcase brand through approximately 440 independent and company-owned dealers.. In fiscal year ended February 2011, the company reported 56% of its revenue from the North America segment, 32% from International segment and 12% from the Other segment which comprises Coalesse Group and PolyVision. .Thus, the company’s strong presence offers the company a competitive advantage over its competitors while attracting and building a loyal customer base.
Steelcase has a strong portfolio of products and brands selling furniture systems and seating, user-centered technologies and interior architectural products across a wide range of price points. Such a strong product portfolio can support the company's innovation process and the launch of new products. It also provides potential for the company to increase its revenue by capitalizing on cross selling opportunities. It also helps Steelcase to attract and serve a diverse customer base in the global office furniture market.
In the most recent report by Steelcase Inc., the company disclosed a large amount of debt in its balance sheet. Over the past years, Steelcase's debt ratios, as shown in the graph, have been increasing..The debt to equity ratio is a measure of a company's financial leverage. As disclosed in the annual report, the debt to equity ratio for Steelcase increased 20.61% in 2007 to 76.1% in 2011. .This creates concerns with respect to the firm's operation. A highly leveraged balance sheet could cause a substantial amount of cash flow from operations to be used for the interest payment. This would restrain the company's chance of securing additional financing at better costs and limits the company's ability to adjust its capital structure to the significant changes in the market and economy.
In the fiscal year ended 2010 and 2011, Steelcase had a number of restructuring activities. The focus of these activities was to "reinvent the company's industrial system through implementation of lean manufacturing principles, manufacturing facility consolidation and simplifying the product portfolio, reducing operating expenses through white collar workforce reductions, applying lean-in-the-office principles, reinventing work processes and opening shared services centers in Malaysia and Mexico.". This restructuring event would help the company reduce more than $100 million of annualized fixed cost by the end of 2011. .In addition, Steelcase decided to close three additional plants in North America which is expected to reduce annualized costs by an additional $35 million when completed over the next 18 months. .This strategic move would enable the company to reduce operational cost and improve efficiency.
Steelcase’s PolyVision manufactures steel and ceramic surfaces for sale to third-party fabricators to create static whiteboards sold in the primary and secondary education markets in the US and Europe. The sales of such products could see a strong growth as enrollments in schools in the US are increasing rapidly. It is expected that the number of school-age children would continue to grow and reach approximately 54 million by 2017. .The company can capitalize on the growing demand for classroom furniture, as the increasing school enrollments would spur the expansion of existing classrooms and establishment of new classrooms.
The cost of raw materials has been volatile in recent years due to changes in global supply and demand, which leads to supply interruptions. A similar fluctuation can be observed in the ongoing rising cost of fuel and energy, which directly influences the manufacturing and distribution cost of the company. The company's gross margins could be affected if the costs of these goods continue to fluctuate. Any disruption in the supply and delivery of these commodities could have an adverse impact on the business operation and financial condition of the company.
The global financial crisis and vague recovery scenario are very likely to create challenges for the company over the next years. Though economic recovery continued during the first half of 2010, the global economy was affected by the turmoil in sovereign debt markets during the second quarter of 2010. In November 2010, the IMF warned about a possible full blown sovereign debt crisis in rich nations. The ongoing war in Libya and inflation concerns could adversely affect Steelcase’s earnings and exert pressure on its equity returns.
Coming out of the hard times post the real estate debacle, Steelcase continues to attempt to keep its revenue streams as diversified as possible to help recoup losses from the past and protect itself into the future. Steelcase is moving forward and expanding more into offerings such as health care, education, and government. Steelcase is also diversifying into the emerging markets with operations in China, India, and the Middle East.  These moves are believed to help Steelcase stay ahead of the evolving business work place.
In 2010 Steelcase began restructuring to create cost savings and help the bottom line. The restructuring project is believed to save $100 million of fixed costs by the end of 2011. There will also be three plant closings in North America that will save another $35 million. Steelcase wants to combine cost reductions with the industry recovering after a rough few years. Revenue in 2010 was $2.44 billion compared to $2.3 billion the previous year. An increase of 12 percent. 
This table compares Steelcase's EV/EBITDA to its top competitors. The EV/EBITDA ratio is sometimes better to use than the P/E ratio because it ignores the company's capital structure by comparing the value of a business, free of debt, to earnings before interest. The average for the furnishings industry is 8.93 showing Steelcase is significantly below its competitors at 7.91. Steelcase's two major competitors Herman Miler and HNI Corp. are both above Steelcase and are projected to stay there for at least the next 12 months. 
Steelcase maintains a well diversified customer base. In 2010 not one independent dealer selling Steelcase products accounted for more than 4 percent of total revenue. The top five independent dealers combined did not account for more than 10 percent of Steelcase's total revenue. This is a great hedge from any one dealer dropping Steelcase products or not meeting expected sales in any given quarter. The fact Steelcase does not rely on any one source for a majority of its revenue helps Steelcase keep a steady and predictable amount of sales. The same is true of its direct-sale revenue sources in that Steelcase does not rely on any specific store. In 2010 the largest direct-sale accounted for only 0.4 percent of their revenue. The top five of which combined for only 1.5% of revenue.  Again the diversification of Steelcase's revenue streams protects them from any variation or unexpected happenings in any one customer.
Steelcase has seen recent declines in revenue. They suffered in 2008 and 2009 with the rest of the economy during the bust of the real estate bubble. Steelcase was especially hit because their sales are connected to the amount of new construction and development. As a result of a broader recover by the economy Steelcase began to see increases in revenue in the first quarter of 2010. The trend continued into the second quarter as the market as a whole began to see more office buildings being built and more construction projects. Steelcase was able to keep revenues up into the third quarter as well. They realized higher revenues than the same quarter the year before across all their market segments. In the third quarter of 2010 Steelcase recorded a net income of $18.3 million. When compared to the third quarter of 2009 of $0, it is clear they are headed in the right direction. This was mainly helped by the ever improving health of the economy, but was also due to a lower effective tax rate. This growth is not exclusive to Steelcase though, as it is the trend in the entire industry as the economy strengthens. Steelcase's competitors have dealt with the same downswing in 2008 and 2009 and recent increases in sales. There were increases in some expenses in 2010. Commodity prices have seen a recent uptick in price as the dollar weakens and global crisis's drive them up. This caused an increase of $6 million of commodity prices for Steelcase. 
Steelcase offers a wide variety of products to their consumers. Their products range anywhere from interior architectural structures including furniture and builImage:scsproduct.jpg|230px|left]]Steelcase's architectural solutions integrate style and technology to provide an effective workplace with maximum flexibility. A modular building system allows for movable walls that are easy to build and simple to change. Steelcase offers interior solutions for virtually any environment. From the workplace including at the office or in a hospital, to at home or in a school, Steelcase offers it all. Steelcase offers a comfortable seating solution for any setting that enhances style and productivity in a multifunctional chair. Complimentary, Steelcase also offers table solutions for conference rooms to outdoor patios. They also offer storage solutions that include shelves and cabinets. Their educational segment includes the desks and chairs mentioned above with the addition of an interactive whiteboard which is a glimpse of the future from the traditional blackboards. Steelcase has also made a push in the health care industry to provide furniture solutions to not only patients but also doctors and nurses.
Steelcase offers a unique breadth of pricing strategies that aims to pass on the most effective consumer cost reductions possible. Steelcase works diligently with its suppliers to achieve a cost effective pricing strategy that is competitive across all of its product segments. Steelcase's pricing strategy was designed by NuTech Solutions, a company that worked with Steelcase in order to discover beneficial cost-savings solutions in order to not only save the company money but to also pass on those cost savings to their customers.
Steelcase offers their line of products both online and in store. They offer their products online directly from their company at Steelcase.com.  Shopping online will offer the customer the lowest price with the ability to eliminate secondary dealers. Steelcase products are offered worldwide in numerous private retail stores. These stores consist of large retail entities such as Target, and private furniture retailers such as Crate and Barrel. Naturally these retailers offer their own websites where Steelcase products are sold to consumers.
Steelcase uses various forms of techniques to promote their product line. Their product line is marketed through a series of private and independently-owned retailers as well as directly from Steelcase.com to the end users. Their presence in retail stores as well as on the web allows Steelcase to cover all areas of product promotion for maximum profitability through product outreach. Their strong track record with customer satisfaction keeps customers returning for newer and more innovative products.
Steelcase has manufacturing plants in three continents worldwide including North America, Europe, and Asia. They employ a make-to-order manufacturing process which allows for minimal inventory at any given time. Steelcase has developed a global network of integrated suppliers that is operated under a single centralized organization which streamlines communications between all segments to allow for maximum efficiency.
Steelcase utilizes a physical distribution system that uses commercial delivery services through regional distribution centers. Several of these distribution centers are located directly within their manufacturing centers in order to decrease lead times and pass on consumer savings.
Steelcase obtains its raw materials for manufacturing through a large number of suppliers worldwide. Of these raw materials are steel, wood, particleboard, and petroleum-based products. It goes without saying that these raw materials are priced based on global supply and demand which changes almost daily. Steelcase employs a supply chain management team that focuses solely on using the most cost effective products from the available suppliers worldwide. 
Threat of New Entrants
As Steelcase specializes in the design and manufacture of premium office productivity furnishings, it has established its place as the premium and higher end manufacturer of these products. With high research and development costs being expended over several years to create elite products, many companies may not want to enter into this higher end of the market for a few reasons. Competitors such as Herman-Miller and Knoll focus on a wider array of furniture, but not specifically on office and productivity furniture, as does Steelcase. Also, this type of industry historically has struggled greatly during a recension, as new business offices are not being built or expanded, thus creating decreased demand for office and productivity products. The health of this industry can be greatly correlated with the real estate market, more specifically, commercial real estate. Steelcase's 10-K warns that the entire office furniture industry usually lags behind in the economic recovery by anywhere from two to three quarters, so outlook may still be weary even in a recovering economy. With the industry outlook currently looking to be on the downside from prolonged effects of the recession, potential new entrants will be driven away from investing in the office furniture industry. Also, Steecase's premium product line would be difficult for competitors to achieve due to high research and development costs, and moderately high capital expenditures needed to start up. These drivers have led to determine a Low Threat of Entry. 
Threat of Substitute Products
Office furniture offers a unique market niche within the overall furniture industry. For example, office chairs offer a perfect mix between comfort and productivity achieved by offering the right amount of padding, and the ability to sit straight up while also adjusting the height of the chair. Attempting to substitute the productivity and comfort of an office chair with, perhaps a reclining chair or a folding chair simply would not prove as a viable substitute for the office chair. This same comparison can be made across the entire product line with regards to meeting tables and desks, as office furniture is difficult to substitute. These factors showing a lack of viable substitures drive the Threat of Substitute Products to be Low.
Bargaining Power of Buyer
Customers in the office furniture industry are given a fair number of companies to choose from, and an even larger variation of products to choose from. Buyers can choose between a large range of prices and quality to suit their needs pertaining to office furniture. These two factors would drive Buyer Power or Bargaining Power upwards. On the other hand, buyers seeking ultimate quality and performance from their office furniture are defined to selecting the high quality brand of Steelcase. As office furniture overall has a large variety, but premium quality merchandise is limited, Bargaining Power is driven lower in this respect. Given the overall mixed drivers regarding Bargaining Power of Buyers, this force has been given a Moderate rating.
Bargaining Power of Suppliers
Steelcase has very high criteria and standards that it sets for its suppliers of materials. Before considering a supplier, Steelcase requires the potential candidate to meet certain financial and management criteria, as well as having their product meet the high quality standards that Steelcase has. If any supplier does not meet Steelcases standards, there are many other firms availiably to be a supplier of raw materials. Steelcase prides itself on producing the highest quality merchandise, and therefore expects its suppliers to provide them with the highest quality in materials. Given the extremely high standards that Steelcase sets for current and existing suppliers, the Bargaining Power of the numerous Suppliers is Low. 
Competitive Rivalry within an Industry
As mentioned prior, the office furniture industry is directly correlated with the overall recession, and lack of new businesses being created and expanded. The entire industry is struggling, as demand is shrinking during a recession, causing each company to battle for the smaller concentration of customers. The similarity of office furniture products creates the need for each company to differentiate their own products to stand out from the crowd and make their brand name known. With Steelcase focusing more on premium office furniture, several competitors offer lower quality, and therefore lower priced merchandise. This pricing war, and all of the players creating products for the same use, once again raises the overall rivaly within the industry. Another factor to consider is the low switching costs for consumers for office furniture. For the most part, any chair, table, and desk combination can be interchanged to work across different brands. This ease of switching for customers once again raises rivalry, as the players in the industry are constantly competing with little ability to "lock-in" consumers to their products. With all of these drivers signaling a high rivalry, the overall Competitive Rivalry can be rated as Very High. 
Steelcase is primarily involved in the office furniture industry and that is where a majority of their revenue comes from. This industry is heavily influenced by the macroeconomic environment and therefore tends to be cyclical and follow the general trend of the stock market. This is the case with the office furniture industry because it is heavily impacted by the general health of the economy. In a down economy factors such as commercial office building construction, corporate profit, and employment in white collar type jobs directly effect Steelcase. There have been two major declines in sales in the past decade in the office furniture industry. The first from 2000 to 2003 when there was more than a 30 percent decline in furniture sales and then again in 2007 to 2009 when it suffered another 30 percent plus drop in sales.  Steelcase experienced the same declines during these times and revenues were down. Steelcase has attempted to protect themselves from these macroeconomic factors, but they can never completely avoid the profit hindering effects of being involved in the cyclical market.
Due to a constantly changing work environment and a shift toward using technology in creative ways have caused a trend away from traditional offices and work spaces. The average office and workstation is becoming consistently smaller and smaller and this shift is hurting the sale of office furniture. Technology has encouraged and made simpler the idea of working outside of the traditional office. Smart phones keep everyone up to date and teleconferencing allows a meeting to take place between two people anywhere in the world. The changes in the traditional office have made the office supply industry more competitive for firms entering the market with products addressing the new needs of the new worker. The office furniture industry is already very competitive with lots of firms all offering very similar products. Steelcase attempts to differentiate itself using its reputation, brand name, price, design, and established relationships with dealers and customers.