United Rentals (A), Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of United Rentals (A), Spanish Version
In December 1997 United Rentals (URI) went public on the NYSE. Ten years later, during the peak of the economic meltdown, the company's performance was in decline. United Rentals had experienced its share of problems in the prior years and was still struggling to emerge from this turmoil.In the spring of 2008, the recession had decimated the company's core business, construction equipment rental. The economic downturn resulted in a significant decrease in North American construction and industrial activities and had adversely affected the company's revenues and operating result. The stock of the company quickly fell from the mid-$30 range in late 2007 to $3 in March 2009. In addition, two of the company's former chief financial officers had been charged with securities fraud and other violations, by both the U.S. Attorney's office and the SEC. The Board was faced with the resignation of the founder and chairman, management succession issues, the failed merger with Cerberus, and the lawsuit in Delaware. The Board was responsible for overseeing the change in a number of senior management and board positions which became increasingly difficult due to the turmoil and poor performance of the company. Recruiting and retaining talent in senior management and the board was central to the success of the company, which relied on their people for strong performance. In addition the company's total indebtedness was approximately $3.3 billion, including $146 million of subordinated convertible debenture. The company's substantial indebtedness had the potential to have adverse consequences in a number of ways, including: increase their vulnerability to adverse economic, industry or competitive developments; require the company to devote a substantial portion of their cash flow to debt service, reduce the funds available for other purposes; limit their ability to obtain additional financing; and decrease their profitability or cash flow. And the company was still dealing with multiple purported class action and derivative lawsuits that had been filed against it. It was during this time the board started looking for candidates both for the CEO and Chairman positions.
Authors :: Jay W. Lorsch, Kathleen Durante, Emily McTague
Swot Analysis of "United Rentals (A), Spanish Version" written by Jay W. Lorsch, Kathleen Durante, Emily McTague includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rentals Indebtedness facing as an external strategic factors. Some of the topics covered in United Rentals (A), Spanish Version case study are - Strategic Management Strategies, Boards, Ethics, Marketing, Mergers & acquisitions and Organizational Development.
Some of the macro environment factors that can be used to understand the United Rentals (A), Spanish Version casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of United Rentals (A), Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in United Rentals (A), Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rentals Indebtedness, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rentals Indebtedness 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 (A), Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in United Rentals (A), Spanish Version case study
2. Improving business portfolio management of Rentals Indebtedness
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 Rentals Indebtedness
Strengths United Rentals (A), Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rentals Indebtedness in United Rentals (A), Spanish Version Harvard Business Review case study are -
Ability to recruit top talent
– Rentals Indebtedness is one of the leading recruiters in the industry. Managers in the United Rentals (A), Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Rentals Indebtedness digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rentals Indebtedness 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.
Low bargaining power of suppliers
– Suppliers of Rentals Indebtedness in the sector have low bargaining power. United Rentals (A), Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rentals Indebtedness to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Rentals Indebtedness 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.
High switching costs
– The high switching costs that Rentals Indebtedness has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the United Rentals (A), Spanish Version Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Sustainable margins compare to other players in Organizational Development industry
– United Rentals (A), Spanish Version firm has clearly differentiated products in the market place. This has enabled Rentals Indebtedness to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Rentals Indebtedness to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Rentals Indebtedness in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Rentals Indebtedness has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in United Rentals (A), Spanish Version 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
– Rentals Indebtedness is present in almost all the verticals within the industry. This has provided firm in United Rentals (A), Spanish Version 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.
High brand equity
– Rentals Indebtedness has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rentals Indebtedness to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Rentals Indebtedness is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Rentals Indebtedness is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in United Rentals (A), Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses United Rentals (A), Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of United Rentals (A), Spanish Version are -
Increasing silos among functional specialists
– The organizational structure of Rentals Indebtedness is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Rentals Indebtedness needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rentals Indebtedness to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Rentals Indebtedness, firm in the HBR case study United Rentals (A), Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the United Rentals (A), Spanish Version 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 Rentals Indebtedness has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Rentals Indebtedness has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study United Rentals (A), Spanish Version, it seems that the employees of Rentals Indebtedness 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Jay W. Lorsch, Kathleen Durante, Emily McTague suggests that, Rentals Indebtedness 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.
Capital Spending Reduction
– Even during the low interest decade, Rentals Indebtedness 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study United Rentals (A), Spanish Version, is just above the industry average. Rentals Indebtedness 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Rentals Indebtedness needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As United Rentals (A), Spanish Version HBR case study mentions - Rentals Indebtedness takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Rentals Indebtedness has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities United Rentals (A), Spanish Version | 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 (A), Spanish Version are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rentals Indebtedness is facing challenges because of the dominance of functional experts in the organization. United Rentals (A), Spanish Version 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rentals Indebtedness can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, United Rentals (A), Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Rentals Indebtedness can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Rentals Indebtedness 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 (A), Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rentals Indebtedness to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rentals Indebtedness 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.
Learning at scale
– Online learning technologies has now opened space for Rentals Indebtedness 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.
Creating value in data economy
– The success of analytics program of Rentals Indebtedness has opened avenues for new revenue streams for the organization in the industry. This can help Rentals Indebtedness to build a more holistic ecosystem as suggested in the United Rentals (A), Spanish Version case study. Rentals Indebtedness can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Rentals Indebtedness 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.
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. Rentals Indebtedness can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rentals Indebtedness 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rentals Indebtedness can use these opportunities to build new business models that can help the communities that Rentals Indebtedness operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Developing new processes and practices
– Rentals Indebtedness can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Manufacturing automation
– Rentals Indebtedness 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.
Threats United Rentals (A), Spanish Version 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 (A), Spanish Version are -
High dependence on third party suppliers
– Rentals Indebtedness high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Rentals Indebtedness has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Rentals Indebtedness 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rentals Indebtedness with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Rentals Indebtedness 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.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Rentals Indebtedness in the Organizational Development sector and impact the bottomline of the organization.
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.
Consumer confidence and its impact on Rentals Indebtedness demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing wage structure of Rentals Indebtedness
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Rentals Indebtedness.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study United Rentals (A), Spanish Version, Rentals Indebtedness may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
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. Rentals Indebtedness can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Rentals Indebtedness is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. Rentals Indebtedness 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.
Weighted SWOT Analysis of United Rentals (A), Spanish Version 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 (A), Spanish Version 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 (A), Spanish Version 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 (A), Spanish Version 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 (A), Spanish Version 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 Rentals Indebtedness needs to make to build a sustainable competitive advantage.