Shurgard Self-Storage: Expansion to Europe (Abridged) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Shurgard Self-Storage: Expansion to Europe (Abridged)
This case is accompanied by a Video Short that can be shown in class or included in a digital coursepack. Instructors should consider the timing of making the video available to students, as it may reveal key case details.Shurgard, a U.S.-based firm that rents storage facilities to consumers and small businesses, is considering financing options for rapid expansion of its European operations. Five years after entering Europe, Shurgard Europe has opened 17 facilities in Belgium, France, and Sweden. Along the way, Shurgard has encountered skepticism from both European consumers and investors about the unfamiliar self-storage concept and internal debates on how much to adapt the U.S. business model to European lifestyles. Wall Street analysts also do not value the impact that the European expansion could have on Shurgard's U.S. performance as a publicly traded Real Estate Investment Trust (REIT). As an alternative, to finance this expansion, Shurgard received a proposed deal from a consortium of banks and other investors where they would provide private equity financing spaced over the next few years plus a line of credit. In return, the investors would receive a large share of Shurgard's equity and control of its board, which could force a public offering in less than two years. The decision focuses on whether Shurgard Europe should accept the conditions and valuation of the proposed deal or seek another deal at a later point in time. Students must assess whether the self-storage business model can deliver the growth rate in Europe that the company has promised its potential investors. Involves calculating some basic estimates of the company's value from financial exhibits (enterprise value using an EBITDA multiple). Main focus is to assess this as an entrepreneurial venture. Students do not need to be familiar with REITs.
Swot Analysis of "Shurgard Self-Storage: Expansion to Europe (Abridged)" written by Richard G. Hamermesh includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shurgard Storage facing as an external strategic factors. Some of the topics covered in Shurgard Self-Storage: Expansion to Europe (Abridged) case study are - Strategic Management Strategies, Entrepreneurial finance, Growth strategy, International business, Operations management and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Shurgard Self-Storage: Expansion to Europe (Abridged) casestudy better are - – talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, geopolitical disruptions, increasing household debt because of falling income levels, increasing energy prices, challanges to central banks by blockchain based private currencies,
digital marketing is dominated by two big players Facebook and Google, technology disruption, etc
Introduction to SWOT Analysis of Shurgard Self-Storage: Expansion to Europe (Abridged)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shurgard Self-Storage: Expansion to Europe (Abridged) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shurgard Storage, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shurgard Storage 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 Shurgard Self-Storage: Expansion to Europe (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in Shurgard Self-Storage: Expansion to Europe (Abridged) case study
2. Improving business portfolio management of Shurgard Storage
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shurgard Storage
Strengths Shurgard Self-Storage: Expansion to Europe (Abridged) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shurgard Storage in Shurgard Self-Storage: Expansion to Europe (Abridged) Harvard Business Review case study are -
Innovation driven organization
– Shurgard Storage is one of the most innovative firm in sector. Manager in Shurgard Self-Storage: Expansion to Europe (Abridged) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Shurgard Storage 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 Shurgard Self-Storage: Expansion to Europe (Abridged) 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 Innovation & Entrepreneurship industry
– Shurgard Self-Storage: Expansion to Europe (Abridged) firm has clearly differentiated products in the market place. This has enabled Shurgard Storage to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Shurgard Storage to invest into research and development (R&D) and innovation.
Learning organization
- Shurgard Storage 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 Shurgard Storage is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Shurgard Self-Storage: Expansion to Europe (Abridged) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Shurgard Storage in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Innovation & Entrepreneurship field
– Shurgard Storage is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Shurgard Storage in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Shurgard Storage has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shurgard Storage to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Shurgard Storage has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Shurgard Self-Storage: Expansion to Europe (Abridged) 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.
Low bargaining power of suppliers
– Suppliers of Shurgard Storage in the sector have low bargaining power. Shurgard Self-Storage: Expansion to Europe (Abridged) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shurgard Storage to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Shurgard Storage is one of the leading recruiters in the industry. Managers in the Shurgard Self-Storage: Expansion to Europe (Abridged) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Shurgard Storage 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.
Weaknesses Shurgard Self-Storage: Expansion to Europe (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shurgard Self-Storage: Expansion to Europe (Abridged) are -
Skills based hiring
– The stress on hiring functional specialists at Shurgard Storage 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.
Slow to strategic competitive environment developments
– As Shurgard Self-Storage: Expansion to Europe (Abridged) HBR case study mentions - Shurgard Storage 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Shurgard Self-Storage: Expansion to Europe (Abridged), is just above the industry average. Shurgard Storage 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.
Interest costs
– Compare to the competition, Shurgard Storage 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.
Products dominated business model
– Even though Shurgard Storage 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 - Shurgard Self-Storage: Expansion to Europe (Abridged) should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Shurgard Storage has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Shurgard Storage even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Need for greater diversity
– Shurgard Storage has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 Shurgard Storage supply chain. Even after few cautionary changes mentioned in the HBR case study - Shurgard Self-Storage: Expansion to Europe (Abridged), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shurgard Storage vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Richard G. Hamermesh suggests that, Shurgard Storage 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Shurgard Self-Storage: Expansion to Europe (Abridged) 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 Shurgard Storage 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Shurgard Self-Storage: Expansion to Europe (Abridged), it seems that the employees of Shurgard Storage 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.
Opportunities Shurgard Self-Storage: Expansion to Europe (Abridged) | 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 Shurgard Self-Storage: Expansion to Europe (Abridged) are -
Buying journey improvements
– Shurgard Storage can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shurgard Self-Storage: Expansion to Europe (Abridged) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shurgard Storage in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shurgard Storage 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 Shurgard Storage to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Shurgard Storage has opened avenues for new revenue streams for the organization in the industry. This can help Shurgard Storage to build a more holistic ecosystem as suggested in the Shurgard Self-Storage: Expansion to Europe (Abridged) case study. Shurgard Storage can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Shurgard Storage 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.
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 Shurgard Storage 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.
Developing new processes and practices
– Shurgard Storage can develop new processes and procedures in Innovation & Entrepreneurship 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
– Shurgard Storage can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shurgard Storage in the consumer business. Now Shurgard Storage can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shurgard Storage can use these opportunities to build new business models that can help the communities that Shurgard Storage operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shurgard Storage can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Shurgard Storage can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Shurgard Storage can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shurgard Storage 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.
Threats Shurgard Self-Storage: Expansion to Europe (Abridged) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shurgard Self-Storage: Expansion to Europe (Abridged) 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 Shurgard Storage business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Shurgard Storage 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.
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 Shurgard Storage.
Regulatory challenges
– Shurgard Storage 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 Innovation & Entrepreneurship industry regulations.
High dependence on third party suppliers
– Shurgard Storage 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.
Shortening product life cycle
– it is one of the major threat that Shurgard Storage is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Shurgard Storage
– 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 Shurgard Storage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shurgard Storage in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Consumer confidence and its impact on Shurgard Storage 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shurgard Storage 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 Shurgard Self-Storage: Expansion to Europe (Abridged) .
Environmental challenges
– Shurgard Storage 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. Shurgard Storage can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
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. Shurgard Storage needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Shurgard Self-Storage: Expansion to Europe (Abridged) 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 Shurgard Self-Storage: Expansion to Europe (Abridged) 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 Shurgard Self-Storage: Expansion to Europe (Abridged) 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 Shurgard Self-Storage: Expansion to Europe (Abridged) 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 Shurgard Self-Storage: Expansion to Europe (Abridged) 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 Shurgard Storage needs to make to build a sustainable competitive advantage.