Redbox's Strategy in the Movie Rental Industry Case Study
1) Which of the five generic competitive strategies discussed Chapter 5 most closely fit the competitive approach that Redbox is taking? Why did you select the strategy you selected? The two main strategies Redbox focuses on are a combination of low price and convenience as well as increasing kiosk locations with high traffic. Compared to its competitors, Redbox’s offers a rental fee as low as $1.20 per day, which is $3 cheaper on average. Redbox is also extremely convenient. All kiosks are placed in high traffic locations such as supermarkets, drugstores, and McDonald’s. Since mid-2009, the number of Redbox locations has increased from nearly 20,000 to 34,600. With …show more content…
There are currently 34,600 Redbox locations across the United States, some with dual kiosks. The number continues to go up. For an even bigger expansion, Redbox could consider the foreign markets. There are many countries with a similar movie matching market as the United States that may be attracted to Redbox’s service.
As the Internet continues to develop and people spend more time online, online movie streaming has become a substitute product to Redbox movies. Although Redbox is very convenient, it is more convenient to stream a movie right at home. So what to do about the growing buyer interest in substitute products?
4) What recommendations would you make to Redbox management? At a minimum, your recommendations should cover what to do about each of the strategic issues/problems identified in question 3. In addition, each recommendation should be supported with convincing arguments based on your analysis of Redbox’s situation.
First of all, Redbox needs a better content acquisition strategy. The current cost is simply too high. In addition to well-known movie studios, Redbox should consider partnership with independent filmmakers and smaller production companies. There is a lot of well-made and valuable content that people do not know about. Redbox can feature a few of those movies or