Coinstar: A Sleeping Giant Awakens
This case describes a unique entrepreneurial company, whose leaders have
demonstrated a knack for identifying obscure market niches. The rapid success of its
Redbox kiosk division has drawn attention to Coinstar’s business model and creates an
interesting opportunity to explore the dynamics within a company attempting to diversify
its revenue stream and to discover a long-term strategic identity.
After describing Coinstar’s humble beginnings, the case delves into the
company’s two primary business segments. The leadership team, competitive setting,
customer qualities, marketing efforts, and supplier relationships for the Redbox and the
Coinstar segments are presented. Financial records are also included, so that an
assessment of the company’s performance and capital structure can be conducted.
Review Coinstar’s two primary businesses, comparing and contrasting the
divisions along strategic and performance dimensions.
Define success determinants for each of the company’s two core business
What does an analysis of Coinstar’s financial results reveal about the
company’s operations and the performance of the organization? What factors will
contribute to the company’s decision to modify its capital structure?
What role does diversification play in Coinstar’s business strategy?
Review Coinstar’s two primary businesses, comparing and contrasting the divisions
along strategic and performance dimensions.
Coinstar is currently committed to two core kiosk-type businesses: its Redbox
DVD rental division and its coin-counting division. These two important business groups
are compared along several strategic and performance dimensions below.
Joint venture with McDonald’s
Brainchild of company founder
THE local video store
Popular, fun, fast, easy
Low profile and brand awareness
simplicity, customer loyalty
Patented coin-counting machine
31,000 locations – US
18,900 locations – US, Canada, UK,