United Rentals Extending Its Market Leadership
United Rentals has done an impressive job of building a leadership position in the equipment rental market since its founding in 1997. The company has completed hundreds of acquisitions in a sector characterized by significant fragmentation. United Rentals has increasingly integrated its locations, improved operations, and clearly realized some cost advantages via economies of scale and scope. This has allowed it to expand at a double-digit revenue compound annual growth rate since 2012 (triple the industry growth rate) and achieve the leading market position with approximately 16% share. Its scale advantages allow the company to target larger, more sophisticated customers with a one-stop shop strategy of offering a wider array of equipment and services to meet customer needs. As United Rentals’ scale grew in general rentals, its acquisition strategy increasingly turned to specialty rentals—more-complicated solutions bundled for customers at their job sites for which it can presumably command better pricing and margins. Examples include portable storage and bathroom facilities for a construction site or mobile power equipment at a plant. This strategy has increased margin volatility somewhat, however.
United States