Redbox Management

Redbox Management

Introduction

Redbox is a United States company that finds its specialization in the rental of movies, in the form of DVDs and Blue-ray Discs. Redbox is also privileged in renting video games  through the retail kiosks managed automatically. As reported by the parent company Redbox operates with more than thirty three thousand kiosks established across twenty seven thousand locations by the end of June 2011. Kiosks have been tailored by the Company and feature the red color as symbolic to the company. The design is as similar visible in the company's emblem. As part of the company strategy these kiosks are located across America at grocery stores, general pharmacies, retailers, convenience stores, and fast food restaurants. The expansion of the Redbox family was announced in February 2012 with plans to deploy a couple of hundred kiosks in Canada. The company is still undecided whether it should exploit the Canadian market totally. Redbox is the subsidiary company of Coinstar Incorporation, which recently reported that Redbox had captured 34.5 percent of the market share of discs rented. The main competition faced by Redbox is from Netflix, Blockbuster and Blockbuster express. It seems though that Redbox has maintained its competitive edge over its competitors by deploying expert business analysis techniques, making it the market leader with the highest market share. (Financial Statements 2011)

Discussion

History

Let's consider the history of the company, its birth and its path to glory. Initially Redbox  Retail Limited Liability Company was funded by McDonald's Corporation. In the year 2002, the company positioned four computerized convenience store kiosks, and 11 DVD letting kiosks. All the kiosks were placed in Washington's Metropolitan area. Redbox decided to withdraw from the grocery kiosks within one year of its launch and focused all its efforts towards the DVD rental market. The grocery kiosks did not bear the results as expected by the company but the DVD rentals floated huge profits towards the company. Hence Redbox decided to totally focus on the DVD rental market and withdraw all out from the grocery market. In the years that followed till 2005, Coinstar incorporation acquired 47 percent of the shares in Redbox for a total sum of 32 million dollars. At the start of year 2008, Coinstar incorporation exercised the rights issues and further acquired share increasing its holding from 47 percent to 51 percent, hence acquiring controlling interest. In the following year Coinstar Incorporation paid McDonald's corporation and other shareholders a sum of 176 million dollars to acquire 100 percent holding in the company. (Financial Statements 2011)

Rise to Success

Remarkable results followed since 2005 as Redbox achieved Blockbuster in the year 2007 in a couple of locations in the United States by surpassing the 100 million rental barrier. The story of glory continued as over 1 billion rentals were witnessed in the year 2010.  Mitch Lowe joined the Redbox family in the year 2003. He was formerly associated with Netflix as the co-founder. Mitch initially, started off as a consultant and then as Vice President of Purchasing & Operations. In year 2005 due to a remarkable performance by Redbox altogether, he ...