Negative change in contracts with movie studios (price; discontinue)
Companies like Netflix that have been in the movie streaming industry for many years, and have a large portion of the market for streaming movies make it difficult to others to enter into the online movie rental industry. Netflix has already established a large library of movies and TV shows available for its members. It would take Redbox a number of years and resources in order to catch up with the infrastructure that Netflix already has available and ready for the consumer right now. Redbox would need to analize the opportunity cost of going into a new market or staying and investing in the current kiosks market and making sure that it is the best it can be. Redbox may be subject to others entering into the kiosks market to tap in on a low cost profitable business model. Blockbuster announced the intentions of entering into the kiosks market, which would have taken some of Redbox's share of the profits in a small percentage. However, in 2012 Redbox purchased Blockbuster kiosks business. According to LA times:
That evidence was clear Monday as Redbox, the nation's largest DVD rental company, agreed to spend up to $100 million to acquire Blockbuster-branded DVD kiosks operated by its largest rival, NCR Corp., adding about 9,000 machines to its existing 35,400 (LA times 2012).
It is apparent that with Redbox's strong financial position in the marketplace it will be difficult, but not impossible for other kiosks movie rentals to appear.
SWOT analysis conclusion:
In Conclusion, the SWOT analysis shows that Redbox has many strengths to be profitable and has the potential for future growth in the industry. The DVD movie rental industry is still s...
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...ntil they are charged full price of the movie.
Deploy more kiosks with the projected profitability of $50,000 or more.
Expand outside of the U.S., Puerto Rico and United Kingdom (where technology is moving at a slower pace and people are not as familiar with Netflix or VOD).
Blu-ray discs: 'We're not dead yet'. (n.d.). Retrieved April 13, 2014, from http://www.consumerreports.org/cro/news/2013/05/blu-ray-discs-we-re-not-dead-yet/index.htm
DEG Releases Year-End 2013 Home Entertainment Report - DEG. (n.d.). Retrieved April 12, 2014, from http://www.degonline.org/news-releases/deg-news/deg-releases-year-end-2013-home-entertainment-report/
Gamble, J., & Thompson A. A. (2013). Redbox's Strategy in the Movie Rental Industry. In Essentials of strategic management: The quest for competitive advantage (pp. 295-303). New York, NY: McGraw-Hill/Irwin.