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.
According to Spector & McCarthy, 2012), Nordstrom's has an enormous financial position proportioned to be around $1.3 billion in cash, 11 straight quarters for making sales, and its apparent positioning in the Apparel’s top 50 companies ranked by profit margins. The company knows that its customers are in high demand for quality products and services. The company has expanded most of its stores within and outside Europe, something that has enabled many clients access its products and services without any difficulty. The company has shifted most of its growth mechanisms to depend on e-commerce. Most of the customers are able to access Nordstrom's products online.
In 2000 Cuban introduced himself to the NBA community when he purchased the Dallas Mavericks for $285 million (“Mark Cuban”). Facebook cofounder and CEO Mark Zuckerberg has led his social network to new heights, even as some younger users have grown tired of it. Revenue grew 58% in 2014 to $12.5 billion, supported by a jump in mobile ads (Williams 12). Some 1.4 billion people around the globe are on Facebook, and those users are watching 3 billion videos a day on the site. Its Instagram unit has more than 300 million users, while mobile messaging app WhatsApp, which it purchased for $19 billion in cash and stock in 2014, has 700 million users and is growing.
If this attempt is deferred, more suitable earnings of renting movies will take over such as “On Demand”. This is probable because the low-priced entry barriers in the DVD industry linked to streaming content due to the huge amount of streaming content that could become obtainable to possible distributors. d) Bargaining Power of Consumers The industry of movie rental is an active industry. In times of slower economic growth where customers have a less amount of optional income their ability of expenses in the industry will be reduced. In times of a wealthy economy, customers might spend more money on the industry.
Plans to deploy 7,000 to 8,000 kiosks in 2010. 2. DVD rental price of $1 per day 3. New locations in Navy Exchange Stores, Schnuck Markets, and Kum & Go convenience stores. Business strategies Best-Cost: Redbox strives to have the lowest cost while differentiating through service and low price.
red box stratergy in the movie rental industry Puerto Rico Cohort 6 Business Strategy Assignment Prof. Logan By: Jessica Oliveras May 5, 2012 REDBOX POINT The Redbox’s Strategy in the Movie Rental Industry case describes how successful REDBOX has been by being the leading company in self-serve DVD rental business. They strategically placed kiosks where the customers where shopping regularly. This enable them to obtain $263MM in revenues (includes DVDXpress) for the end of the first quarter of 2010, representing a market share of approximately 20%. REDBOX MISSION Redbox’s mission is to provide clients with a very low price rental fee per day of $1 for movie rental at an accessible place, with a good selection, and the convenience of returning the DVD at any Redbox kiosk. SWOT Analysis Strengths: • PRICE – low everyday price of $1 rental movie.
Redbox SWOT Analysis Rebecca Ceja Devry University Company information: Red Box is a rental movie company which launched in 2002. The company offers easy, convenient and affordable movie and game rentals. The company has kiosks located everywhere in the U.S. and is continuously growing. According to Peterson’s article on Redbox, the company continues to strive even after raising their prices in 2012. Despite the increase in sales, the overall stock value decreased in 2013 when the owner Outerwall cut the forecast on overall revenue and profit, as discussed in The Seattle Times by Edwards.
Redbox Case Study Redbox’s Strategy Main Elements of Redbox Strategy includes: * Attract customers with a combination of low price and convenience (strong focus on customer experience) * $1.00 per day rental price is considerably cheaper than the $4.50 rental fee charged by many movie rental outlets * The location and convenience of Redbox DVDs has considerable appeal; an estimated 150 million people per week walk within 10 feet of one of Redbox’s nearly 20,000 locations * The rental and return process was designed to be fast, efficient, and fully automated with no membership fees(200 different DVD titles are just a touch on a touch screen and swipe of a debit or credit card away and returns can be completed in 20 seconds or less at an unoccupied machine) * Gives customers the ability to go to the Redbox website and see what is in stock at nearby Redbox locations and reserve a DVD at a particular machine * Launched a Redbox iPhone app that offers the main features of the Redbox website on the iPhone and iPad * Expand rapidly the number of shopping locations with a Redbox kiosk * The parent company (Coinstar) has been aggressive in continuing to deploy additional vending machine kiosks (the company planned to install 7,000 to 8,000 new kiosks in 2010) * Plans called for capital expenditures of $115 million to $125 million for new kiosk locations * Redbox has recently negotiated arrangements to add kiosks to navy exchange stores on over 40 naval bases in the continental US and Hawaii, to 100 Schnuck Markets stores in 7 states, as well as expand its presence to more than 280 of Kun & Go’s 430+ convenience stores in 11 states * Redbox has been creating buzz among retailers interested in boosting customer traffic in their stores * Redbox has been leveraging the existing customer
THE NEWEST AND MOST POPULAR MOVIES FOR A LOW DAILY RATE Redbox Fun Facts Renting more than 2 billion discs to date, Redbox is America's destination for movies and video games. With 34,600 locations nationwide, Redbox is the fun, fast, easy way to rent the latest new release movies on DVD or Blu-ray Disc® and the top new release and family video games. Featuring up to 200 titles and 630 discs, Redbox is a fully automated video rental store contained in 12-square feet of retail space. With more than 68 percent of the U.S. population living within a five-minute drive of a Redbox kiosk, Redbox is where America rents movies and games. * Convenient.
The movie into instant-delivery movie rentals has made it so that a lot of companies cannot enter into a lucrative industry without high fixed costs. Due to the centralized organization of online entertainment companies, there is an economies-of-scale effect even for relatively new companies as compared to their brick-and-mortar competitor’s such as Blockbuster. Due to the low cost for business to enter this industry, there are a lot of options that consumers may choose from when looking to purchase movie rental products. With companies such as Apple and Amazon entering this marketplace, the consumer’s bargaining power is extremely high and results in a lot of price competition between companies. The threat of new entrants into this industry is extremely high due to the low amount of capital needed to enter into the industry as compared to others.