With the emergence, of digital communication Redbox can distribute movies to clients efficiently, however, that is not the case; it delivers physical DVDs. Redbox will lose its status as a market leader; unless and until it takes advantage of technology to deliver movies.
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People are turning to technology as a tool to gather information and buy goods and services; as such, technology makes it possible to save time that will otherwise be used in looking for goods and services. Technology enables customers to gather information on a variety of products as well as the price at which they are selling. In addition, technology ensures that clients access information at the comfort of their homes or office. Redbox focuses on selling DVDs to clients who must physically collect them from Redbox vending machines kiosk; it, therefore, will not attract potential clients who desire to have movies delivered online. Technology enables business organization to capture new markets while retaining existing customer. Technology being a critical opportunity, Redbox can use it to stay ahead of its competition.
Redbox currently purchases physical DVDs; this ties up a significant amount of capital. Digital distribution of movies will reduce operating cost without compromising the quality of services offered. Storage cost has a negative impact on the Redbox profitability, since this increases the Company’s cost of operation.
The current plan by Redbox to have vending machines in various locations limit its ability to reach clients who cannot access vending machines or those who are in Europe, Australia, Africa or the Middle East. This is a deficiency which can easily be overcome by utilizing technology to reach as many people as possible. Although Redbox has been able to generate attractive revenue, online delivery of movies will make it realize improved sales.
The Advantage of Redbox current policies of positioning vending machines in places frequented by many people enables Redbox to supply movies based on the demographics. As a result, Redbox can plan ahead by stocking DVDs, which sell, thus minimizing slow moving DVDs. In addition, the physical infrastructure of vending machines is an unbeatable competitive advantage because delivery of movies through streaming is yet to reach its full potential.
The disadvantage of Redbox current model of selling Physical DVDs includes the possibility of clients poorly handling or destroying DVDs. Besides, Redbox has to have many employees to monitor stock and deliver movies to vending machines in different locations.
Redbox will continue to be a market leader by ensuring it adopts and grows its ability to deliver movies online especially through streaming. Video streaming has the advantage of enabling the company to sell movies to clients who are not within the geographical location of its vending machines. It will also release resources currently used stock DVDs. Besides, it is convenient for Redbox clients to buy movies without having to go to a vending machine.
In conclusion, Redbox is going to remain a market leader when it takes advantage of technology to expand its market share, lower operating cost and ensure efficient delivery of movies. Online sale of movies will guarantee the future of Redbox by enabling it to minimize operating cost while expanding market share. It has to retain vending machines while developing online movie sales. Online distribution of movies is the only way to ensure Redbox remains a market leader in the movie distribution business.