Redbox Case Analysis
Key elements of redbox strategy
Redbox started its business in 2004 with the idea of providing a variety of movie DVDs at a very low price. Instead of paying around $4.50 in a blockbuster store, for example, customers could rent movies for one dollar per day, making Redbox a much more viable option. What enables the organization to offer such a low price is the fact that instead of physical stores the company has touch screen kiosks which customers pick movies from, not having so many of the costs associated with the stores (store employers, higher rent, etc.).
Other than low price, Redbox attracts customers as its kiosks are located on high traffic areas which are convenient for them, like groceries store, retail stores, and so forth. The idea is that people will rent movies in places they would have to go to anyways, or rent movies after walking past one of the kiosks even if they were not considering to in the first place. The organization’s goal was to rapidly increase the number of kiosk locations so the company could serve more people or even better serve them, as customers could return a DVD to any of the Redbox kiosk, not necessarily the one they got it from.
Another key element of the company’s strategy is the partnerships with not only the retail chains but also the movie studios, wholesale distributors and third party retailers, which enabled the company to provide latest releases in the high-traffic locations.
Strategy used by Redbox: Low Cost Provider
Redbox utilizes a low-cost provider strategy mainly as it focus on not having the expenses that other physical stores have to deal with. As stated before, the company does not have to deal with a lot of employees’ wages and benefits, expensive rent, electrical bills and so many other maintenance expenses associated with keeping a store. By only having the kiosks and cutting down on so many costs, the company can offer movie rentals at a cheaper price than Blockbuster, for...