Analysis of an Automated Retail Trailblazer

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Abstract In 1991 Coinstar was founded by Jens Molbak along with two of his Stanford classmates. Eleven years later, Coinstar had 10,000 coin counting machines in operation around the country. In 2005 Coinstar entered a joint venture with McDonald’s. Redbox was established as a separate corporation. Coinstar completed the purchase of Redbox in 2009. By 2012, Coinstar had over 35,400 Redbox kiosks in operation throughout the United States and Puerto Rico. Coinstar has experienced exponential growth, particularly with the full acquisition of Redbox. Their financial reports and key statistics indicate that Coinstar is a healthy and thriving firm. Coinstar faces potential threats with competition and the increasing availability of digital delivery of video, the fluctuation of interest rates, a declining and uncertain economy, and the contractual relationships with movie studios and retailers. Coinstar stock price has experienced a positive trend over the last 5 years, and the firm has implemented strategies to diversify and deflect the potential decline of the video rental segment. An investment in Coinstar stock is recommended for investors looking for a return on investment within a 2-5 year span. The long term viability of Coinstar is questionable, unless they successfully develop new business ventures. Coinstar, Inc. – Analysis of an Automated Retail Trailblazer Ranked 15th in Fortune’s Fastest-Growing Companies for 2012, Coinstar continues to ride a wave of success through its innovative self-service automated retail solutions. The company has experienced exponential growth with revenue increases of 39% and 29% in 2010 and 2011 respectively. This growth can be attributed to a growing number of kiosk installations, existing kiosk sales growth, and a continued effort to expand automated retail sales enterprises (Cacace, 2012).

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