Lydie Nguz Maruv

International Business Strategy-Shurgard case-question 3

Question 3-What do I think are the main challenges that Shurgard will face for its European expansion

(Other than “growth”), What would be my specific recommendations as regards each of these challenges? Why?

In my opinion, the main challenges that Shurgard will face for its European expansion are the following:

1. The unfamiliarity of the self- storage concept in Europe and hence lack of professional expertise;

2. Differences between European countries, it’s not one size fits all;

3. Inexistence of specific regulation concerning self-storage business;

4. European labor regulation, which implies that it is harder to hire or fire people and relocate them(France);

5. Difference between European consumers and US consumers as regard price elasticity;

6. Difficulty to fund expansion as potential investors might be very demanding;

7. Marketing critical to a quick rent up in order to create basic awareness and demand;

Concerning the first challenge, the fact that self-storage didn’t exist in Europe, means it is both a risk and an advantage to be the first mover. So, Shurgard has to make sure in its expansion process, that there is a real market opportunity in countries where it wants to operate. It involves that there are potential customers who are looking for this kind of services. I my opinion, if a business doesn’t exist somewhere it don’t mean per se, that people are worse off. Furthermore, due to the lack of professional expertise in this sector, the Company will have to incur costs as regard traineeship.

Second, the mistake to avoid is to consider European countries as a uniform bloc, in order to succeed the company should take into account differences in real estate market, legal framework, habits and tastes between countries.