Corporate Communication: Steelcase, Inc. (Case Study Sample)

Read Case 8-1 (“Steelcase, Inc.”) in Corporate Communication and respond to the following questions. 
• Where should Grueber report and why? 
• What resources should Grueber ask for? What are the biggest challenges for IR? 
• How would you position the function to handle those challenges? How do you see these issues relating to empowerment? 
• What changes would you have made to strengthen empowerment and hence strengthen (possibly) Steelcase, Inc.?

STEELCASE AS A PUBLIC COMPANY (IPO TO JUNE 2000)
Steelcase hit an all-time closing high of $37.94 per share on March 13, 1998, less than one month after the IPO. Almost everything that followed with respect to the company's stock price, however, was disappointing. Uncertainty caused by the 1997 Asian crisis and the 1998 Russian default significantly disturbed many companies' capital expenditures. In addition, as the year 2000 approached and "Y2K" fears loomed, corporate spending was focused almost solely on technology and information systems. Although traditional indicators of furniture system demand remained strong, those indicators did not translate into end demand for Steelcase's products.
In 1999, just as the company's profitability started to weaken, Steelcase purchased the remaining 50 percent of Strafor, a previous joint venture interest in Europe and Africa with annual sales of $500 million. Because the two companies concentrated on different aspects of the furniture business, the addition of Strafor's business to the balance sheet had a material effect on several of Steelcase's financial ratios. All of Steelcase's products were "made to order." This business model had allowed it to carry only a small amount of inventory, and Steelcase's dealers typically paid for purchases in less than 30 days. Strafor did not have the same inventory constraints. Also, many of Strafor's customers were accustomed to paying closer to 90 days after receiving an order. With the Strafor acquisition, inventory at Steelcase rose and inventory turnover fell. At the same time, however, a new customer base increased Steelcase's collection risk. The softness in the balance sheet reinforced investor concerns over deteriorating earnings performance.