Redbox Case Study

963 Words4 Pages
I. History of Redbox: In 2004, Redbox began positioning DVD rental kiosks in high-traffic shopping locations in all fifty states, Puerto Rico and the United Kingdom. This innovative deployment of newly released DVDs, Blu Rays, and video games charged a $1 a day rental fee, which could be returned to any other kiosk nationwide. In 2009, one simple second generated 70-80 rental transactions (over 365 million DVDs) and also $773.5 million in revenues (Gamble, Thompson, and Peteraf). Coinstar Inc., a self-service, coin to cash kiosk wholly owned and operated Redbox. After being monetarily endorsed by McDonald’s Ventures in 2005, Coinstar purchased a 47.3 percent ownership interest in Redbox and thereafter paid $5.1 million to further its ownership share to 51.0 percent. Subsequently, in February 2009, Coinstar purchased the remaining ownership of Redbox for approximately $162.4 million (Gamble, Thompson, and Peteraf). Being the leading provider of money transfer services, Coinstar successfully procured Redbox and consequently projected them into the next realm of business. In 2009, revenues from Redbox's operations accounted for 67.6 percent of Coinstar’s. Being such a large company in the kiosk business, Coinstar knew how to implement strategies that would work to strategically take over this market successfully (Wingfield). II. Redbox’s Business Strategy: Successes: Redbox’s successes are due to the convenience and low price that they provide to customers. Surveys indicate that 80% of Redbox customers would refer them to a friend, which speaks astronomically about the services provided. Additionally, another core tactic that they implemented was to expand the number of kiosks. Consequently, Redbox believed they could dominate the video rental market; and that they did. Redbox easily monopolized the

More about Redbox Case Study

Open Document