Red Box Essay

405 Words2 Pages
Red Box Case Study 1a. What are the chief elements of Redbox’s strategy? * Low price advantage (allows rentals for as little as $1 a day) * Strategic partnerships to raise volume (place kiosks in many high trafficked areas such as groceries or convenience stores) * Rapid expansion (have almost doubled amount of kiosks each year since 2006) * Customer experience (Redbox focuses on the customer having a fast transaction by allowing customers to obtain DVD’s under 1 minute if they were aware of which one they wanted, and returns in 20 seconds) 1b. Which of the five generic competitive strategies most closely fit the competitive approach that Redbox is taking? Low-cost provider * Redbox is using the low-cost provider strategy by offering DVD’s at roughly a 75% discount compared to their competitors * Also by placing their kiosks in areas of different industries that also use the low-cost strategy such as McDonald’s the kiosks are surrounded by their market 1c. What type of competitive advantage is Redbox trying to achieve? Redbox is trying to obtain a low cost and convenience advantage in the DVD rental industry. By offering the same product for roughly 75% less than competitors they have an advantage in cost. Also by partnering with corporations such as McDonalds, they have made their product very convenient to the industry which has allowed them to take a competitive advantage in that category as well. SWOT Analysis Strengths * Low-cost compared to competitors * No membership fee * User-friendly kiosks * Online reservations * Many locations * Flexibility in returns (Any Redbox) * Option to buy movies | Weaknesses * Limited selection * Limited Machine Capabilities * Limited Inventory * High cost of contracts * No cash option * Destruction of DVD’s after life |

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