To maximize their effectiveness, color cases should be printed in color.In April 2012, Jenne Britell, the Chairman of the board of directors of United Rentals, Inc. (NYSE: URI) was preparing her notes for an upcoming stockholders' meeting. It was a meeting unlike most other meetings she had chaired. Stockholders were about to vote on a transaction that was perhaps the ultimate fulfillment of the founders' original vision. She was reminded of the company's founding just 15 years earlier and its meteoric growth. With a considerable sense of achievement and satisfaction, she reflected on her tenure as board chair commencing five years ago. Elected to the board in 2006 and then unanimously selected by her peers as Chairman in June 2008, Britell led the board through the aftermath of a tumultuous period that included senior management and board changes, a SEC investigation, financial restatements, the jilting of the company by Cerberus Capital Management in a transaction to acquire URI, and the deepest recession to hit the global economy since the Great Depression. At the meeting, stockholders would be asked to consider approval of a merger agreement between URI, the largest equipment rental company in the world, with RSC, the second largest equipment rental company in the world and URI's largest competitor. The meeting would mark the triumph of a new governance model and company strategy whose development and implementation Britell and CEO Michael Kneeland had led. As Britell reflected on the hard won gains, she also looked forward to the challenges and opportunities that lay ahead as the company managed the integration of RSC's operations with URI and the integration of three new board members from the acquired company. She also reflected on how governance and strategy could continue to evolve as the company planned for the next five years.
Swot Analysis of "United Rentals (B)" written by Jay W. Lorsch, Kathleen Durante includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Britell Uri facing as an external strategic factors. Some of the topics covered in United Rentals (B) case study are - Strategic Management Strategies, and Organizational Development.
Some of the macro environment factors that can be used to understand the United Rentals (B) casestudy better are - – increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing transportation and logistics costs, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of United Rentals (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in United Rentals (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Britell Uri, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Britell Uri 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 United Rentals (B) can be done for the following purposes –
1. Strategic planning using facts provided in United Rentals (B) case study
2. Improving business portfolio management of Britell Uri
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Britell Uri
Strengths United Rentals (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Britell Uri in United Rentals (B) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Britell Uri in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Britell Uri are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Britell Uri is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Britell Uri in the sector have low bargaining power. United Rentals (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Britell Uri to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Britell Uri has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in United Rentals (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Britell Uri is present in almost all the verticals within the industry. This has provided firm in United Rentals (B) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Britell Uri has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Britell Uri has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Britell Uri digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Britell Uri has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Britell Uri 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 United Rentals (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Britell Uri has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Britell Uri to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Britell Uri
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Britell Uri does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Britell Uri is one of the most innovative firm in sector. Manager in United Rentals (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses United Rentals (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of United Rentals (B) are -
Products dominated business model
– Even though Britell Uri 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 - United Rentals (B) should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the United Rentals (B) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Britell Uri has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Britell Uri has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study United Rentals (B), in the dynamic environment Britell Uri has struggled to respond to the nimble upstart competition. Britell Uri has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study United Rentals (B) 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 Britell Uri 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Jay W. Lorsch, Kathleen Durante suggests that, Britell Uri is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Britell Uri is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study United Rentals (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study United Rentals (B), it seems that the employees of Britell Uri don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study United Rentals (B), is just above the industry average. Britell Uri needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Britell Uri supply chain. Even after few cautionary changes mentioned in the HBR case study - United Rentals (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Britell Uri vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Britell Uri 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.
Opportunities United Rentals (B) | 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 United Rentals (B) are -
Using analytics as competitive advantage
– Britell Uri 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 United Rentals (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Britell Uri to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Britell Uri 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. Britell Uri can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Britell Uri is facing challenges because of the dominance of functional experts in the organization. United Rentals (B) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Britell Uri to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Britell Uri to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Britell Uri can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
Better consumer reach
– The expansion of the 5G network will help Britell Uri to increase its market reach. Britell Uri will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Britell Uri 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 Organizational Development segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Britell Uri can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Britell Uri in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
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 Britell Uri 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.
Learning at scale
– Online learning technologies has now opened space for Britell Uri to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Britell Uri has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats United Rentals (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study United Rentals (B) are -
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 Britell Uri business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Britell Uri will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 Britell Uri.
Technology acceleration in Forth Industrial Revolution
– Britell Uri has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Britell Uri needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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. Britell Uri needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Britell Uri 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Britell Uri 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 United Rentals (B) .
Environmental challenges
– Britell Uri needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Britell Uri can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Britell Uri with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Britell Uri can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Britell Uri in the Organizational Development industry. The Organizational Development 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.
Weighted SWOT Analysis of United Rentals (B) 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 United Rentals (B) 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 United Rentals (B) 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 United Rentals (B) 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 United Rentals (B) 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 Britell Uri needs to make to build a sustainable competitive advantage.
