Coin Star

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INTRODUCTION

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 segments.

* 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?

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ANALYSIS

* 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.

| REDBOX | COINSTAR |

Business Origin | Joint venture with McDonald’s | Brainchild of company founder |

Market Profile | THE local video...