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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, talent flight as more people leaving formal jobs, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs,
central banks are concerned over increasing inflation, technology disruption, 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 -
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.
Sustainable margins compare to other players in Organizational Development industry
– United Rentals (B) firm has clearly differentiated products in the market place. This has enabled Britell Uri to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Britell Uri to invest into research and development (R&D) and innovation.
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.
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.
Effective Research and Development (R&D)
– Britell Uri has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study United Rentals (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Britell Uri is one of the leading recruiters in the industry. Managers in the United Rentals (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Britell Uri 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.
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.
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.
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.
Learning organization
- Britell Uri 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 Britell Uri is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in United Rentals (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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 -
Interest costs
– Compare to the competition, Britell Uri 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.
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.
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.
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.
Slow to strategic competitive environment developments
– As United Rentals (B) HBR case study mentions - Britell Uri 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 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.
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.
High cash cycle compare to competitors
Britell Uri 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Britell Uri 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.
No frontier risks strategy
– After analyzing the HBR case study United Rentals (B), it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Britell Uri, firm in the HBR case study United Rentals (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 -
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.
Creating value in data economy
– The success of analytics program of Britell Uri has opened avenues for new revenue streams for the organization in the industry. This can help Britell Uri to build a more holistic ecosystem as suggested in the United Rentals (B) case study. Britell Uri can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Britell Uri 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, 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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Britell Uri 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 (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
Developing new processes and practices
– Britell Uri 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.
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.
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 -
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) .
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 (B), Britell Uri 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 .
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.
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.
High dependence on third party suppliers
– Britell Uri 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.
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.
Shortening product life cycle
– it is one of the major threat that Britell Uri is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
Consumer confidence and its impact on Britell Uri 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.
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.
Regulatory challenges
– Britell Uri needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
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.
