...strategies discussed in Chapter 5 most closely fit the competitive approach that Redbox is taking? Defend your answer. The chief elements in Redbox’s strategy are: a. Attracting customers with low prices and convenience. Charging customers $1 dollar per day as a rental fee is very attractive to users and the firm. It is attractive to customers because their nightly entertainment is very cheap in comparison to other alternatives. It is beneficial to Redbox because in the event that the customer forgets to return the movie, they are charged double the rental amount which doubles revenues instantly. b. Rapidly increase the number of shopping locations with a Redbox kiosk. Most Redbox locations are between the cash registers and front entrance of the store much like Coinstar. They have recently added locations outside the stores to replicate soda machines and newspaper stands. This provides customers with convenient locations to rent and return their movies. c. Create a recognizable brand name. Redbox has created a recognizable brand name by using bright red and white colors for their kiosk. By using red, Redbox locations stand out and are easily recognizable to customers. d. Make the machine easy to use. By making the machine easy to use, customers are able to browse through movies using touch screen technology quickly. They are also able to purchase movies and replaceable cases. Customers’ time at the kiosk is even quicker when there are two kiosk and/or...
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...movie rental needs has suffered a significant loss in revenue to the rise of RedBox and Netflix. The competitive advantage offered by the two companies has tapped into Blockbuster’s market and cause a lack of blockbuster for the company. Since 2009 the company has continue to reported decreased revenue and profits against its competitors. In 2010 the company filed bankruptcy and has since then implemented new services and products similar to its competitors, however, customer’s still prefer RedBox and/or Netflix. Once upon a time on a Friday night after work, you were looking to go home, relax, and watch a good movie. You come up on a big blue sign with yellow lettering, and think, “I’LL RUN TO BLOCKBUSTER!” Today, we’re looking for the nearest RedBox, or browsing Netflix for a good flick. There was time when families would take a trip to Blockbuster, order a pizza, and make it a movie night. Today, people have the luxury of not even leaving the house to find a good movie; thanks to Netflix. After a routine run to Wal-Mart, Walgreens, or Kroger’s it has become second nature to browse the RedBox, especially since the cost is only $1. But what has happened to good ol’ Blockbuster? Over the past few years Blockbuster video locations have steadily declined. Blockbuster, the once powerful source for movie and video game rental, has become nonexistent in some areas. Due to the rise of Netflix and RedBox, Blockbuster has experienced a decline in sales, continues to close locations...
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...anywhere with an internet access point and a viewing device, to stream as many movies or videos as they like. Netflix has negotiated terms with networks managing titles to either receive a profit of each title or a cut from subscription fees. How strong are the competitive forces in the movie rental marketplace? Do a fiveforces analysis to support your answer. The competitive forces in the movie rental marketplace are not very strong. Netflix’s major competitor is actually just RedBox. Most people would think Blockbuster Express kiosks would be a serious competitor, but actually Blockbuster Express (not related to Blockbuster LLC or Blockbuster stores) is operated by RedBox. According to NPD Group, a market research company, overall disc rentals was down in 2011, but it still managed be the top source of movie media in homes with 62 percent of transactions being disc transactions. At its peak, Blockbuster had operated approximately 9,000 stores, they are now operating approximately 900 stores worldwide. RedBox, a recent competitor, operates approximately 42,000 kiosks. Netflix runs their disc rental program a little bit differently. Although they do not have physical locations for customers to peruse, instead their selections are online based and selections arrive by U.S. Postal Service next day or two days depending on the customer’s location. As mentioned previously, the disc rental industry is slowly declining. The rise of renting streaming movies is on...
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...Megan Welshymer BA 370 9/29/15 Extra Credit # 1 Case Study: The Netflix Rollercoaster 1. Netflix’s original marketing strategy offered several flat-rate monthly subscription options; in which, members could stream movies and shows via the Internet or have disks sent to their homes in a pre-paid and pre-addressed envelope. Free from the despair of due dates and late fees, members could keep, up to, eight movies at a time. Upon the return of a disk, Netflix would automatically mail out the next movie from the customer’s video queue. Members were able to change and update their queues as frequently as they liked. The sheer innovation of Netflix’s strategy encouraged several competitors to enter the market to compete directly, forced existing competitors, such as Blockbuster, to extend their services to include mail delivery, and inspired the very creation of Redbox. Regardless of all the competition, if Netflix can remain on the cutting edge of their craft, by continuously offering the latest releases and the most far-fetched options; they should be able to maintain their competitive advantage, because they offer a valuable, reliable service at a consistent price. 2. Reed Hastings’ strategic change and rapid reversal affected Netflix’s fourteen million customers in several ways. First, the company launched a streaming-only plan for $7.99 per month in November 2010, and increased the cost of each DVD plan by $1. Customers interested in both services, were...
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...Marketing 101 Case Study: Netflix Roller Coaster DO NOT FORGET TO SITE MY SOURCE----- Reed Hasting had decided he was going to start a company that he believed would be revolutionary to the world of movie rentals. That company is Netflix. The original offer Netflix had from 1998 to 2008 is that Netflix would have rentals made through its website and mailed to the customers, with no late fees, and you could choose from a flat rate subscription to choose how many movies you wanted to get in the mail. At this point the growing rate of customers and profits were increasing. The company was being recognized as a top growing company. From 2008 through 2010 more competition arose for Netflix, such as blockbuster mail service and Redbox rentals. Pay-per-view was also starting to offer more options, which was a threat. On top of the competition problems, the U.S Postal service had the possibility that they were going to shut down hundreds of local branches as well as cutting out Saturday mail service. After seeing this problem arise, Netflix decided they were going to start an unlimited streaming of movies and TV shows through devices such as TV apps, gaming consoles, or directly online. Customers were paying the same price for both mail service and unlimited streaming. This was a major hit by users making everyone happy. Netflix in 2010 had now realized that the service had had more value by offering the stemming service. So Netflix decided to start and streaming only service...
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...Internal Controls Kleber G. Ceron August 4, 2013 University of Phoenix Axia College Ceron 1 Internal controls serve the purpose of regulating a company’s financial structure by securing the most effective and efficient methods of operation, the utmost accuracy in financial reporting, and the consistent adherence to all pertinent laws and regulations both federal and state, and/or local, in some circumstances. These internal controls protect assets against unauthorized use, acquisition, and disposal. A proper and reliable system of internal controls helps increase accuracy by minimizing the possible miscalculations in accounting records. As a second primary goal, they also serve as pre-emptive measures against fraud, embezzlement, and theft by workers with access to financial records within the company, vendors, and the company’s clients. The Sarbanes-Oxley Act of 2002 had a major impact on internal controls. It was enacted after major scandal was uncovered by corporate giants such as Enron, Tyco International, and WorldCom amongst others. These scandals cost investors billions of dollars after the involved companies’ share prices fell, put thousands of people out of work, and greatly demoralized the nation’s trust in the securities market. The SOX act places the responsibility of certifying the accuracy of financial information directly on shoulders of the individual members of the top executive branch and the management of a company. Any findings of fraud, deception...
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...Closing of Blockbuster Alimatu Asumah Organizational Behavior Southern New Hampshire University I. Introduction a. Closing of Blockbuster b. Challenges faced by Block c. Filling for bankruptcy II. Dish Takeover and Tactics a. Dish Purchase and Layoffs at Blockbuster b. Exploring new channels c. Blockbuster need for innovation III. Employment and Morale a. Compensation and Quality of work b. Morale and Job Satisfaction c. Corporation Image IV. Conclusion I. Introduction Founded by David Cook and Wayne Huizenga in the mid 1980’s, in the late 1980's and early 1990’s, Blockbuster Inc. was the leading in the video rental industry. Which grew quickly maintaining interest in the entertainment industry, including retailing music. Also growing nationwide, many American families were turning all over to movie rentals as a form of in-home entertainment. I propose that an organizational behavior theory that leads to a company’s success includes a rational system perspective and the most important things within these theories are formalization and specific it y of goals. Organizational behavior becomes standardize. Through formalization, organizational behavior becomes standardize making training of new employees easier for both management and the employee. Goal specification allows procedures for specific tasks to be performed along with a structured way for resources to be allotted (Kreitner 2012). When companies have a rational structure, expectations...
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...Netflix Case Study Analysis Background Netflix had grown to be the largest online movie rental service provider with subscribers reaching over 53 million in nearly 50 countries with people enjoying more than two billion hours of television shows and movies per month. For only one low monthly price, Netflix customers can watch as much as they want at anytime. Starting as only a DVD by mail service, Netflix has expanded its company to digital streaming at the click of your finger. Giving you the option to watch over 12,000 titles online, which includes movies and television series. This concept of movies on your computer grew to a prodigious convenience for people who now do not have to worry about late fees. To thank for this convenience in our daily lives is Netflix’s Chief Executive Officer Reed Hastings; he developed the concept of Netflix after he had to pay forty dollars in overdue fees to Blockbuster. Starting in 2002 Netflix created an innovative program called CineMatch, which provided customers with video titles recommendations based upon their ratings and previous video rentals. The customers rated movies by assigning them one to five stars. This system helped customers and Netflix become successful knowing the recommendations were aspiring and brought more value to their subscribers. In 2003 Netflix began expanding, the company reported its first profit of $6.5 million on revenues, his is when business was booming; Netflix had over twenty million subscribers...
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...Netflix’s Underperformance Analysis | BUS 478 FINAL GROUP PROJECT | Instructor: Anthony Chan | Group MemberJackSandraJing(Ivy) Cong 301087222Gavin | Table of Contents EXECUTIVE SUMMARY 1 BACKGROUND INFORMATION 3 CORE ISSUES 5 Price Pressures 5 Competition 5 International Expansion 6 ANALYSIS 6 Industry Analysis 6 Business Model 8 Company Analysis 9 Competitor Analysis 11 Amazon 11 Blockbuster 12 Redbox 13 ALTERNATIVES 13 Additions of Subscription Fee Package 14 Introduction of Netflix' Pay-For TV Channels 15 Domestic Elimination of DVD-mail-in Services in 16 Strategic Partnerships 17 International Expansion 19 Market Strategy 20 RECOMMENDATION 22 CONCLUSION 26 REFERENCES 26 EXECUTIVE SUMMARY Netflix is the world’s leading subscription service provider, offering its members access to an extravagant collection of TV shows and movies. Initially, the company offered its subscribers a low price, single monthly plan, consisting of both the unlimited Internet video streaming service and a DVD-mail-in service. Subscribers could “watch TV shows and movies anytime, anywhere.” In July 2011, Netflix eliminated the combined plan and separated the two services into their own monthly plans. If subscribers wanted to continue receiving both services, they were obliged to sign up for both the services separately, Consequently, the resulting price increase of the new “combined” plan significantly increased subscription cancellations...
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...Background Who is the king of the movie rental industry? Is it Blockbuster, Redbox or Netflix? Blockbuster was the king of VHS rental with their brick and mortar stores for more than 20 years. Netflix was the first to market with the idea of shipping DVDs directly to consumer’s homes but are now focusing their resources and attention to online streaming. Netflix is slowly getting out of the DVD and Blu-ray rental game by raising the prices of their DVDs and Blu-rays. Netflix is spending more money to increase the size of their online library for streaming. The two companies that are battling it out to be the king of the rental industry are Redbox, a company owned by Coinstar Inc., and Blockbuster. This paper will focus on how Redbox entered the market through Disruptive Innovation and what Redbox needs to do to better position themselves in a volatile market place. I will also look at the mistakes Blockbuster made and offer solutions on how Redbox can avoid the organizational decline that Blockbuster experienced. I use Wall Street Journal and peer-reviewed academic journals for my references. To understand the full scope of how Redbox entered the market I will look at the Disruptive Innovation Theory. Disruptive Innovation Theory is a term that was coined by Clayton Christiansen. Clayton Christiansen is a professor at Harvard Business School. He has written a number of books on the subject. In an interview done by Smith, Christensen defines disruptive Innovation...
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...Name:Leuteris Stamatiou Case 2:Netflix Movie rental business The movie rental business is consisted by three major players, Netflix, Blockbuster and Wal-Mart. Netflix was founded by Reed Hastings, a man who captured the idea of Netflix when he was late returning the movie Apollo 13 to his local video store and being charged with a forty dollar fee.Netflix is the number one in the movie rental business but if the company had delayed its public stock offering, the firm would be greater and stronger for its rivals. On the other hand Blockbuster a company dated back to 1985, when David Cook sought to fill a niche market for customers wanting to rent a variety of VHS titles, and Wal-Martthe largest firm in the United States ranked by sales, are the major rivals of Netflix. Blockbuster and Wal-Mart are the ones who mimic Netflix with cheaper rival efforts and “declared” a price war in the movie rental business. But in the end Wal-Mart dumped the experiment in DVD-by-mail and Blockbuster had been mortally wounded with million of dollars losses leaving Netflix alone at the top. Core business/Value-chain For a monthly subscription fee under the standard plan, subscribers can rent as many digital video discs (“DVDs”) as they want, with a number of movies out at a time, and keep them for as long as they like. There are no due dates and no late fees. DVDs are delivered directly to the subscriber’s address by first-class mail from distribution centers throughout the United States...
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...Case Study 4 2) What forces are driving changes in the movie rental industry and are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability? The forces driving the changes in the movie rental industry can be boiled down to the booms we have seen in technology. The cost of HDTV’s has been dropping and has now become more practical for each person to obtain. This leads to the desire to view movies and shows on the big nice screen as opposed to the smaller devices we used to. The movie rental fee as well as the late charges always gave people pause but were not unsurpassable boundaries for consumers who wanted the movie viewing experience without making a purchase. The growth of the movie rental industry via an online presence I feel will continue to grow as more and more people become accustomed to the idea of owning or viewing things through a purely digital means. With a growth in any industry comes the inevitable competitiveness that we see between Netflix and Blockbuster. I would not be surprised to see Redbox throw their hat into the ring with online offerings in the future. 5) What is Netflix’s strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approaches that Netflix is taking? What type of competitive advantage is Netflix trying to achieve? Netflix’s strategy was a “six-pronged” one: 1....
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...COMPANY CASE Netflix: Disintermediator or Disintermediated? PRESENTED BY: DANIEL RICARDO ORDOÑEZ 201312625 MARIA LUCIA PACHON 201311104 YALILE KATHERIN ROA 201313192 THE SABANA´S UNIVERSITY BUSSINESS ADMINISTRATION MARKETING GROUP 1.2 2015 1. BACKGRAUND Netflix is a company that was created from the need generated by getting movies to watch from the comfort of the house, although at that time the companies who led this market were Blockbuster and Redbox , but to get them you had to approach a local Blockbuster or go a supermarket or store nearby where a dispenser Redbox addition these had a specific time to be returned, if not met you could have a fine is found, Netflix identify these weaknesses in them and became its advantages as well when you wanted to watch a film could access the internet make your Netflix account and solicitabas the list of movies you wished to see them received and send you the movies , these could be the time you wished and return , so Netflix quickly gained the lead. But with technological advancement and different devices that were created Netflix realized that people prefer to search online movies so they should not leave home or wait for them to arrive , so the company decided to create direct platform on which there are not only movies but also get series , plus Netflix decided also be associated with the different technological advances for these Netflix had already built into the device as we see when we buy a PlayStation...
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...COINSTAR INC (CSTR) 10-K Annual report pursuant to section 13 and 15(d) Filed on 02/09/2012 Filed Period 12/31/2011 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended: December 31, 2011 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 000-22555 COINSTAR, INC. (Exact name of registrant as specified in its charter) Delaware 1800 114 Avenue SE, Bellevue, Washington (Address of principal executive offices) (State or other jurisdiction of incorporation or organization) th 94-3156448 (I.R.S. Employer Identification No.) 98004 (Zip Code) Registrant's telephone number, including area code: 425-943-8000 Securities registered pursuant to Section 12(b) of the Act: Common Stock, $0.001 par value Name of each exchange on which registered: The NASDAQ Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨ Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.: Yes ¨ No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities...
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...Netflix in 2012: Can It Recover from Its Strategy Missteps? Company Overview: Netflix Corporation was established in 1997 by the current CEO, Reed Hastings alongside software executive, Mark Randolph. They are the world’s leading internet television network with over 57 million members in nearly 50 countries enjoying more than two billion hours of TV shows and movies per month, including original series, documentaries and feature films. Members can watch as much as they want, anytime, anywhere, on nearly any internet-connected screen. Additionally members can play, pause and resume watching, all without commercials or commitments. The company was originally only a DVD--by--mail service in which the customer paid for a certain level of membership that determined how many DVD’s could be rented at one time. DVD’s were mailed to the customer and then returned by the customer when they were done watching. After a couple years in business, the company began including streaming services along with this. The goal here was to reduce costs by trying to get the subscribers to switch to streaming, which would reduce the costs incurred for postage and shipping with the mailed DVDs. By 2009, Netflix was offering a collection of 100,000 titles on DVD and had surpassed 10 million subscribers. Strategic Challenges and Analysis: Hastings developed a strategy which made Netflix the largest online subscription service for streaming entertainment in the world. Netflix’s strategy includes...
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