Business is all about the identification and implementation of strategies that effectively exploit opportunities. In light of this, in 2004, the Redbox Company started commissioning vending machines in a bid to secure the untapped prospect of the self-service DVD rentals. Their strategy was that individuals could rent DVDs at opportune locations such as where people shop regularly giving them a high-traffic advantage. Moreover, having the idea that people could be enticed easily, the Redbox Company offered subsidized rental rates of $1 per day, per movie. As the company grew, in May 2010, it had reached a total number of 22,400 movie kiosks nationally. The company’s strategy relied on the attraction of customers with a strong combination of both convenience and low pricing. In addition, through the rapid expansion of shopping location numbers, Redbox managed to have a grasp of the rental industry. Another strategy was that of convenience. Since Redbox has numerous stores all over the country, it is inherently easy to purchase and return movies rapidly. In addition, as a strategy, this expediency extends to the time required to purchase and return movies. Therefore, the Redbox Company’s strategy of being the best cost provider ultimately translated to competitive advantages.
The determination of any success within a company is through its strength, weaknesses, opportunities, and threats (SWOT) analysis. In the case of Redbox, the company has a host of factors that affect its overall attractiveness and future opportunities. In relation to its strengths, this Company exercises a low-cost policy with no monthly subscriptions or contracts. Furthermore, its convenience in terms of location and user-friendly reservations both at the kiosk and online gives this company added strength. In addition, the ability to rent old or new movies and the provision to return them at any nearby kiosk offers flexibility and ease on the customers. However, such advantages are often barred by limitations in video selections and costly partnerships with studios. Besides, the company’s reluctance in adopting efficient internet delivery strategies makes it lag behind in a contemporary world full of digital revolutions. In regards to the company’s prospects, the Redbox Company has increased opportunities in online video streaming and an expansion of the gaming industry. Additionally, the exploitation of foreign markets, especially through online avenues has the potential for increasing revenues within the company. Among observable threats is the expansion of digital movie availability through companies such as Netflix, which has a large customer base. Such companies offer immense challenges to non-established businesses in the movie industry. Overall, based on Redbox’s SWOT information, the present is quite attractive; nonetheless, there is room for more expansion as the business needs to be more digital in its operations.
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One strategic issue that the Redbox Company faces and needs proper addressing is the performance or under performance of movie kiosks. The management needs to analyze the competitive advantages of over expansion as missed opportunities could potentially result in decreased revenues and overall market share. Another strategic issue is the one on internet movie delivery. This problem needs proper address as it determines effective competitiveness and vulnerability of the Redbox Company. In all business endeavors, marketing remains fundamental as it determines the awareness and proper sensitization of services, which in turn translates to more customers and consequently, business. Therefore, the Redbox Company should view their markets thoughtfully and work to use those that are appealing its overall profitability. Ultimately, the Redbox management should carefully analyze its markets and find suitable areas to expand. Another recommendation is about the marketing position. The current strategy and business model of Redbox do not allow online streaming. Subsequently, the company should focus on building its brand through aggressive kiosk deployment and management, thereby, resulting in a solid customer base. This way, Redbox will be able to expand to online avenues while still maintaining their customers.
