MillerKnoll, Inc. (MLKN): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at MillerKnoll, Inc.'s competitive footing as of late 2025, and honestly, the picture is one of tight margins battling for every dollar of growth. After posting just 1.1% net sales growth on $3.7 billion in revenue for the fiscal year, the core challenge is clear: suppliers are squeezing on commodity costs, evidenced by the $7.0 million in tariff hits just in Q4, which helped drag the gross margin down to 38.8%. Buyers are pushing back hard on those big corporate contracts, while rivals like Steelcase and Haworth are fighting for every inch of market share. To really understand where MillerKnoll, Inc. stands-and what you should do next-you need to dig into how these five forces are shaping its next move.

MillerKnoll, Inc. (MLKN) - Porter's Five Forces: Bargaining power of suppliers

Higher commodity costs pressured gross margin to 38.8% in Q2 FY2025.

Tariffs added significant cost, about $7.0 million in Q4 FY2025 alone. This impact was part of an expected range of $5 million to $7 million before tax for the fourth quarter guidance.

The need for specialized, sustainable materials inherently limits the pool of suppliers capable of meeting MillerKnoll, Inc.'s specifications, which can increase supplier leverage. The company's commitment to ESG is evidenced by achieving 100 percent renewable energy across all manufacturing facilities worldwide in FY2025.

MillerKnoll, Inc.'s large scale, evidenced by $3.7 billion in net sales for fiscal year 2025, provides leverage in negotiations. Still, supply chain disruption, particularly from trade actions like tariffs, remains a tangible risk that can quickly erode profitability, as seen with the $7.0 million Q4 impact.

The company's extensive brand portfolio suggests a broad base of material requirements, but specific inputs create pinch points. Key brands contributing to MillerKnoll, Inc.'s operations include:

• Herman Miller
• Knoll
• Design Within Reach
• HAY
• Maharam
• Muuto

MillerKnoll, Inc. (MLKN) - Porter's Five Forces: Bargaining power of customers

You're analyzing MillerKnoll, Inc. (MLKN) and the customer side of the equation is definitely where the pressure mounts in the contract space. Large corporate buyers hold significant sway, primarily because they can negotiate substantial price concessions.

Large corporate contracts demand discounts in the 15-25% range. This isn't just a small price break; it directly impacts MillerKnoll's gross margin, which stood at 38.8% for the full fiscal year 2025. To put that in perspective, a 20% discount on a contract order cuts the revenue realization by over half of the gross margin percentage.

The environment has recently favored the buyer, too. Contract market demand was sluggish, increasing buyer leverage. For instance, in the third quarter of fiscal 2025, which ended March 1, 2025, MillerKnoll noted that 'overall demand in most geographies was sluggish' within its contract businesses amid macroeconomic uncertainty. This softness gives procurement teams more room to push for better terms.

Average large contract value is high at $1.2 million, making each customer critical. When a single deal is that large, the risk of losing it-or the cost of granting a deep discount-is magnified. This criticality is underscored by customer concentration data; for the fiscal year ended June 1, 2024, the largest single end-user customer represented approximately 5% of the Company's net sales, which totaled $3,628.4 million for that year. Also, the ten largest customers in aggregate accounted for approximately 16% of net sales in fiscal 2024. For the most recent full fiscal year (FY2025, ended May 31, 2025), total net sales were $3,669.9 million.

Here's a quick look at how customer concentration translates to potential revenue impact:

What this estimate hides is that the contract segment, which sees these large deals, is often more price-sensitive than the retail channel. Still, losing any of these top-tier clients would be a material event for MillerKnoll, Inc.

The power dynamic shifts when looking at the other end of the spectrum. Retail customers have low switching costs for non-iconic products. If you are buying a standard office chair or storage unit from a MillerKnoll retail channel, like Design Within Reach (DWR), and it isn't a signature piece, you can easily pivot to a competitor like Steelcase or a high-end direct-to-consumer brand. The switching friction is low because the product isn't deeply embedded in a long-term, custom-designed office ecosystem.

Consider the channels through which MillerKnoll sells its goods:

• Sales through independent dealers (FY2024): 57.4%.
• Sales through direct/retail channels (FY2024): Approximately 42.6%.
• Global Retail Segment Net Sales (Q3 FY2025): $262.5 million.

The low switching cost in the retail segment means MillerKnoll must compete fiercely on design appeal and brand equity for those non-contract sales. If onboarding takes 14+ days, churn risk rises, especially for less brand-loyal retail buyers.

Finance: draft 13-week cash view by Friday.

MillerKnoll, Inc. (MLKN) - Porter's Five Forces: Competitive rivalry

The competitive rivalry within the office furniture sector remains fierce, directly impacting MillerKnoll, Inc.'s operational leverage and pricing power. You see this pressure reflected in the top-line growth figures, which tells you the fight for every percentage point of market share is costly.

Top 4 manufacturers control 46.2% of market share, making rivalry intense. This level of concentration suggests that the top players, including MillerKnoll, are locked in a direct battle for large contract business, which is where the real margins are won or lost. The market structure itself mandates aggressive competitive action.

For the full fiscal year 2025, MillerKnoll, Inc. reported Net sales of $3.7 billion, representing a year-over-year increase of only 1.1% as reported. Honestly, that modest growth rate signals a tight fight for share, as the overall market expansion is not easily translating into robust top-line gains for MillerKnoll.

The competitive set is defined by established giants and a sprawling retail environment. Key competitors include Haworth and Steelcase Inc., though Steelcase Inc. was acquired by HNI Corporation on August 4, 2025. This acquisition consolidates power, potentially intensifying rivalry with the remaining large players. The retail channel, meanwhile, remains fragmented, presenting a different set of competitive challenges for MillerKnoll's direct-to-consumer brands.

Here's a look at the revenue scale of some key players based on the latest reported full-year figures, which helps frame the competitive magnitude:

MillerKnoll's defense against this rivalry hinges significantly on its breadth. The company utilizes its diversified brand portfolio as a key competitive moat. This collection allows MillerKnoll to target multiple price points and design aesthetics simultaneously, something a more narrowly focused competitor might struggle with.

The strength of this portfolio includes, but is not limited to, these design brands:

• Herman Miller
• Knoll
• Design Within Reach
• HAY
• Muuto
• Maharam
• NaughtOne
• Geiger
• Colebrook Bosson Saunders
• DatesWeiser
• Edelman
• Holly Hunt
• Knoll Textiles
• Spinneybeck|FilzFelt

The ability to cross-sell and leverage the combined scale of these entities-such as the consolidation of showrooms like the one in Chicago featuring Design Within Reach, NaughtOne, HAY, and Muuto-is a direct countermeasure to the intense rivalry you are facing. Finance: draft 13-week cash view by Friday.

MillerKnoll, Inc. (MLKN) - Porter's Five Forces: Threat of substitutes

You're assessing MillerKnoll, Inc. (MLKN) in late 2025, and the threat of substitutes is definitely a major headwind, largely driven by the structural shift in where work happens. The corporate spend MillerKnoll is known for is now competing directly with individual spending on home setups.

Remote work trends drive substitution to lower-cost home office setups. As of August 2024, about 22.8% of United States employees, translating to approximately 35.1 million people, worked remotely at least part-time. This isn't just a temporary shift; 91% of employees worldwide prefer to work fully or almost completely remotely. This preference fuels a massive, decentralized market for home office furniture, which was estimated at USD 38.40 billion in 2025. This segment is projected to grow to USD 56.30 billion by 2030, showing a 7.95% Compound Annual Growth Rate (CAGR) from 2025.

To put this in perspective against MillerKnoll's core market, the global commercial office furniture market was valued at USD 59.68 billion in 2025, while the commercial segment specifically was valued at $43.9 billion in 2025. The home office market, while smaller, represents capital expenditure shifting from corporate budgets to individual consumer wallets, often for less expensive, non-contract-grade items.

Mass-market, lower-quality furniture is a constant, cheaper alternative. The home office segment shows that wood, a common material for both high-end and budget furniture, accounted for 46.39% of the material share in 2024. While MillerKnoll competes on design and durability, the sheer volume and lower price points available through online and direct-to-consumer channels in the home market present a significant substitution risk, especially for employees setting up secondary or temporary spaces. For instance, in the home office segment, Desks & Tables held 34.37% of the market share in 2024.

The rise of refurbished and circular economy furniture is a direct threat. Sustainability is a growing factor, and this creates an alternative to buying new, premium products from MillerKnoll. The furniture recycling market was valued at $4,312.1 million in 2025, with a projected CAGR of 3.4% through 2033. This is part of the larger Global Circular Economy Market, which was valued at USD 656.23 Billion in 2024. Companies like IKEA, a major player in the broader furniture space with an estimated 15% market share, are investing in resale initiatives, directly competing in the second-hand space.

Smaller businesses often use non-commercial-grade, off-the-shelf products. While the commercial market is large, the fragmentation at the lower end is substantial. In the United States, B2B/direct sales commanded 75% of the office furniture market share in 2024, but smaller enterprises and startups often bypass these formal contract channels for faster, cheaper procurement. These smaller entities frequently opt for products sourced from the rapidly growing home office or general retail channels, which are not subject to the same rigorous testing or volume pricing structures that MillerKnoll's commercial sales rely on. The Asia-Pacific region, despite its rapid commercial growth, has a lower average fit-out cost at USD 1,524 per sqm versus the global average of USD 1,949 per sqm in 2025, indicating a strong underlying price sensitivity that translates to substitution opportunities at the small-business level.

Here's a quick look at the scale of the substitution environment:

• Home Office Market Size (2025): USD 38.40 billion.
• Global Circular Economy Market (2024): USD 656.23 Billion.
• US Remote Workers (Aug 2024): 35.1 million people.
• US B2B/Direct Office Furniture Share (2024): 75%.

Finance: draft 13-week cash view by Friday.

MillerKnoll, Inc. (MLKN) - Porter's Five Forces: Threat of new entrants

You're assessing the barriers to entry for MillerKnoll, Inc. (MLKN) in late 2025. The threat from new players isn't zero, but several structural elements make a direct challenge difficult, especially at the premium end of the market.

High capital investment is required for manufacturing and global distribution

Setting up shop to compete with MillerKnoll, Inc. requires serious cash. You can't just start selling high-end office furniture from a garage. Manufacturing capacity and establishing a global distribution footprint demand significant upfront spending. For context, MillerKnoll, Inc.'s capital expenditures for the first nine months of fiscal year 2025 totaled $68.1 million, which was already a substantial investment compared to the $78.4 million spent in the entirety of fiscal year 2024. Building out the physical infrastructure-factories, logistics hubs, and inventory-to support a global presence like MillerKnoll, Inc.'s, which posted full fiscal year 2025 net sales of $3,669.9 million, is a massive hurdle for any startup. Plus, maintaining a strong balance sheet to weather market shifts, like MillerKnoll, Inc. did with liquidity of $575.9 million as of May 31, 2025, takes deep pockets.

Iconic brand equity creates a high barrier to entry for premium segments

Brand recognition is a moat, and MillerKnoll, Inc. has spent decades building theirs through iconic names like Herman Miller and Knoll. When a corporate client is spending millions on office fit-outs, they lean on established trust and perceived quality. This legacy equity is tough to replicate quickly. As of November 2025, MillerKnoll, Inc. is ranked 3rd among 188 active competitors in its space. That ranking reflects years of marketing spend and product development that new entrants simply haven't accrued. The company's focus on brand development and communications is vital for maintaining this premium positioning.

Industry HHI of 1,275 suggests a moderately concentrated market

Looking at the overall structure, the Herfindahl-Hirschman Index (HHI) for the industry is cited at 1,275. This figure generally suggests a moderately concentrated market, meaning a few large players hold significant combined market share, but there's still room for smaller firms to operate. Still, breaking into the top tier requires displacing established giants. For perspective, the broader Office Furniture Market size in 2025 is estimated around $59.68 billion.

New entrants can bypass dealer networks via e-commerce/DTC, lowering one barrier

Here's where the barrier gets a little lower. The traditional model relied heavily on established, often exclusive, dealer networks, which are hard for newcomers to penetrate. However, MillerKnoll, Inc.'s own Global Retail segment includes direct-to-consumer (DTC) sales through e-commerce. This shows the channel is viable. New entrants can definitely start by focusing on digital-first strategies, bypassing the high friction of securing dealer contracts. In the wider market, B2C online channels are projected to rise at a 7.6% CAGR through 2030. So, while manufacturing is expensive, a digitally native competitor can start smaller and scale online, which is a definite strategic avenue to watch.

Here's a quick look at some relevant 2025 figures for MillerKnoll, Inc. and the market:

The primary defenses MillerKnoll, Inc. has against new entrants boil down to scale and brand recognition, but the digital route offers a potential workaround for smaller, well-funded startups. You should definitely track any new entrants focusing exclusively on high-margin, digitally-sold product lines.

• High fixed costs for manufacturing facilities.
• Brand recognition is a key differentiator in premium sales.
• Dealer network complexity favors incumbents.
• E-commerce allows for lower initial channel investment.
• MillerKnoll, Inc. has 188 active competitors.

Finance: draft 13-week cash view by Friday.