Preview

Redbox Case

Good Essays
Open Document
Open Document
686 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Redbox Case
Kevin Alvarez April 8, 2012
BUSI 4160 Redbox

1. What are the chief elements of Redbox’s strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approach that Redbox is taking? What type of competitive advantage is Redbox trying to achieve?

- The chief key elements of Redbox’s strategy are low price advantage and strategic partnerships that drive high rental volumes. Redbox also offers convenience. Redbox has established a large “brick and mortar” type kiosk and consumer base without the capital investment of actual retail stores. Consumers use a simple touch screen to select and rent their favorite movies for $1 a day. They can keep the movie as long as they want and return the movie at any Redbox location. - Redbox uses low cost provider strategy. Redbox entered the market with $1 DVD rental kiosks in many high traffic McDonald’s locations. The Redbox $1 DVD rental price attracts the low-income McDonald’s target market and paying per DVD rental reinforces the low-cost provider strategy. The rental price of $1 implies value: the consumer perceives the product as low-cost regardless of whether they were charged more for late fees. Partnering with Coinstar, Redbox has been able to extend partnerships to many large chains that share similar low-cost strategies.

2. What does SWOT analysis of Redbox reveal about the overall attractiveness of its situation and future prospects?

- Strengths Low costs Offering convenience Brand awareness Affiliation with Coinstar Ability for consumers to view the current Contents/reserve a movie from home before going to the location
- Weakness Expensive license agreements with movie companies Inability to obtain new releases in a timely manner Limiting payment to credit cards Limited storage in kiosks
- Opportunities The failure of movie rental stores increase the market share Expansion Offer more classic

You May Also Find These Documents Helpful

  • Good Essays

    Block Buster

    • 4592 Words
    • 19 Pages

    The case covers Blockbuster’s emergence in the video rentals market. After detailing the intricacies of the video rental market, the case takes a deeper dive into Blockbuster’s business model, based on brick-and-mortar locations throughout the US. This costly infrastructure has slowed the entertainment giant’s growth in an industry that has rapidly transitioned from the traditional store-based model, to mail rental and video-on-demand alternatives. The rapid transition of customer demand and the emergence of Netflix (Blockbuster’s main competitor) has incited Blockbuster’s rapid entrance into the video-on-demand market through the acquisition of Movielink.…

    • 4592 Words
    • 19 Pages
    Good Essays
  • Good Essays

    Marketing Plan for Redbox

    • 924 Words
    • 4 Pages

    Redbox’s primary target market proves to be the busy, I don’t have time to visit Blockbuster or login to Netflix type of consumer. There kiosk machines are located in common shopping locations which lend themselves to the “lazy” consumer. Furthermore, Redbox is also targeting the casual movie watcher who isn’t necessarily intending on renting a movie. In a way Redbox has turned renting movies into an impulse item. As a result, Redbox provides consumers with a service never seen before and has emerged as one of the largest DVD rental chains in the world.…

    • 924 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Redbox Marketing Plan

    • 6148 Words
    • 25 Pages

    Redbox is facing two main issues, one being the online business. Redbox is preparing to launch an online video streaming service within 5 months on the market and will try to get a significant market share in the long run. The other issue is problem with major film studios, but Redbox is going to make a new agreement with them, which is a financial issue and means that costs will increase. Redbos will also enlarge their video games and Blu-Ray portfolio and in addition the functionality of the vending machine is going to be improved. There are going to be as many as four slots per vending machine for rentals and returns. Furthermore, Redbox is going to expand in terms of numbers of kiosks and also will make a…

    • 6148 Words
    • 25 Pages
    Powerful Essays
  • Good Essays

    Redbox

    • 583 Words
    • 3 Pages

    RedBox has a cost performance advantage over possible new entrants since it is owned by a publicly traded company and already has an established distribution channel relationship. RedBox has an advantage over new entrants in that it already has a well-known brand image amongst movie viewers. People often say “why don’t you go just rent it from RedBox” during conversations. However, consumers can readily switch over to Blockbuster or cable pay-per-services.…

    • 583 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Redbox Case Analysis

    • 1272 Words
    • 6 Pages

    Redbox is a leading provider of movie and game rentals in the Nation. Redbox offers self-service DVD rentals through over 22,400 kiosks throughout the United States, Puerto Rico, and the United Kingdom. (McGraw 20) In 2004 Redbox began spreading automated vending machine kiosks containing by and large new release movie DVD’s in high traffic shopping locations. Its products and operations include Kiosk DVD rental, online disc rental reservation, no late fee, recently released movies, and video game rental. (Hoovers) In February 2009, Coinstar Inc., who is also a leading provider of money transfer services and self-service coin-counting kiosks, purchased full ownership interest in Redbox Automated Retail LLC., (McGraw 20) In 2009, Redbox made up 67% of Coinstars revenue and now holds 27.9% of the DVD rental market share (Coinstar Analysis).…

    • 1272 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Netflix vs. Redbox

    • 1043 Words
    • 5 Pages

    Netflix provides a subscription-style e-commerce service. Customers only need to sign up and pay $13.95-39.95 a month to borrow as many as 2-9 movies at a time with no monthly limit. If customers quickly watch the DVD and send them back, the monthly fee pays for quite a few movies. The relatively low monthly fee enables Netflix to compete with Blockbuster and other brick-and-mortar video rental business. Meanwhile, Netflix might keep the customers who try the service and happy with it continue paying the monthly fee. Therefore, Netflix has less problem in predicting revenue or level revenues.…

    • 1043 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    Four P's of Redbox

    • 503 Words
    • 3 Pages

    Redbox’s products consist of DVD, Blu-ray disc and video game rentals. Each of the discs come secured with a barcoded DVD case and are vended from a kiosk. These kiosks are self-serve, customer- interactive computer terminals that are available for public use. Each of Redbox’s kiosks can hold up to 200 titles and 630 discs. Redbox is known for their signature color, being red, displayed on both their kiosks and their product cases. The color red was chosen to stand out and assist in attracting customers. At these kiosks customers can browse the selection of DVD’s by categories such as genre, latest releases, most popular and alphabetical order. The rental period for the discs end at 9:00 the night after they were rented; and can be returned to any Redbox kiosk location regardless of where they were rented from.…

    • 503 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Redbox

    • 413 Words
    • 2 Pages

    3:buyers.overtime,redbox customers have said also there are times that they want to watch an old classic,so,redbox should not only focus on the new releases.redbox update the movie once a week.so should do some research.get know more about customer needs and then satisfy them.…

    • 413 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Even tho Redbox as many newly released movies they charge by the amount of movies…

    • 301 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    REDBOX is a “Coinstar Company that rents DVDs for a dollar a day through vending machines in more than 25,000 convenience store, supermarkets, and fast-food restaurants” (Kolter and Armstrong, 2012, p. 370). REDBOX was the first of its kind to offer affordable daily DVD rentals from a kiosk. REDBOX is still in competition with Blockbuster and Netflix in the DVD rental market. However, REDBOX is a step ahead. They realize the high cost of rental and membership fees consumers can endure, so they offer a unique distinguishing marketing tool, $1 a day rentals. Imperative to their success, REDBOX uses a sophisticated software system designed to skillfully deliver DVDs to consumers instantly at the touch of a button. REDBOX does not anticipate cutting back on its products or kiosks; instead they are diligently trying to fulfill higher demands from consumers by using the future of technology. “REDBOX operates more than 24,000 DVD rental kiosks in McDonald’s, Walmart, Walgreens,…

    • 1637 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    Swot Analysis Redbox

    • 108 Words
    • 1 Page

    Redbox is a DVD rental kiosk, which were first tested at various McDonald’s locations in…

    • 108 Words
    • 1 Page
    Satisfactory Essays
  • Good Essays

    Netflix is the world’s largest online movie rental service. We provide over 100,000 choices of DVDs to more than eight million of our subscribers. We saw how the Internet is changing the way people buy and sell goods. We saw an opportunity in the movie rental industry and decided to provide a novel product and service from the convenience of ones home. Here’s how Netflix works. First Netflix customers choose which type of monthly package they want. They then make a list of movies that they want to watch. Movies are then shipped to the customer. After the customer has viewed their movies they send the movies back and we send them the next title on their list. All with no late fees or shipping fees. All of this has lead to the success of Netflix. One reason for our increased success is that we have eliminated late fees. This strategy was implemented to keep customer satisfaction high. This let’s our customers watch the movies they want, when they want and not have to worry about late fees. Another successful strategy we’ve implemented is that there are no restrictions to the number of movies you can rent per month. By paying a flat rate monthly fee, this gives customers access to our 100,000 DVD titles. Not only do we offer DVD’s, we offer movies that you can instantly play on your computer or on your TV. This is appealing due to the increased convenience that is offered. It saves the customer an eventual two trips to the local video store. All this is done from the customer’s home and computer. We can compete with rental stores because we provide a better product and service than they do. Local rental stores inventory is limited, whereas our inventory isn’t limited to a confinement of just one store. We always have titles on hand. We also attract customers because when you’re our customer your video store is just out the front door, at their mailbox. This eliminates traveling to and from the video store each…

    • 1226 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    Sales of movies on discs have been undercut by the rise of low-cost rental options, such as Coinstar Inc's kiosk chain Redbox, which rents DVDs for $1 a day and online subscription, services such as Netflix Inc.…

    • 303 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Marketing Plan Netflix

    • 1182 Words
    • 5 Pages

    When Netflix.com originally started business, they started out with only 30 employees and 925 DVD’s for rent. The plan that was originally offered was a seven-day DVD rental for $4, plus $2 shipping, with the cost going down when additional discs were rented, if preferred customers could keep discs longer for an additional fee. Another product offered was customers could purchase new DVDs at a discounted price of up to 30 percent. Consumers could also decide to purchase a rented disc once they got it home by having the balance of the retail price charged to their credit card.…

    • 1182 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Case Study: Box

    • 869 Words
    • 4 Pages

    Box is an online file sharing and cloud content management services for businesses. It was established in 2004 by two college students; Aaron Levie and Dylan Smith. The company currently offers 3 account types: Enterprise, Business, and Personal [1]. As of 2013, Box has acquired more than 22 Million users, which add up to 1100% growth since 2009 [1]. Although Box’s growth has been phenomenal, there are many competitive challenges that lie ahead in the Enterprise Software industry.…

    • 869 Words
    • 4 Pages
    Good Essays