Analysis to look at Red Bulls strategies

Red Bull has turned itself into a multinational company that offers a product that enhances your brain and the body. Their approach to managing their interior and exterior situation and circumstances has become an interesting subject matter for many. Thus we conducted some evaluation to check out Red Bull's strategies, and especially the international strategies. The exterior analysis was a mix of negative and positive observations, for example they have the good thing about the customer commitment and the production cost, and however, they are really in the territory of major players in the beverage industry which put them in danger. Nevertheless, the industry research and peer review helped to shed some light on Red Bull's exterior record, where we can easily see a substantial development on the market and Red Bull headship in the drink market.

Through the inner analysis we noticed that Red Bull leads a proactive approach towards their business by adopting classic and unconventional solutions to develop their horizons. Through the worthiness chain model, we discovered that Red Bull's interior marketing and sales strategies show ground breaking success on international size. Furthermore, the HR has completed to attract the right applicants to attain the required goals, simple because they are young and know the young marketplace exactly. The general strategy research of Red Bull has offered Red Bull a differentiated product within its market and a focused-differentiated product within the drinks industry. Typical is that any kind of differentiated products concentrate on few decided on customers, however, Red Bull have become selective but became massively popular amonst the youth, and therefore, they produce over 1 billion cans every year.

The SWOT evaluation they was conducted on Red Bull has crystallized some Weaknesses and dangers. However, the Strengths and Opportunities outweigh the drawback of Red Bull; additionally, the Weaknesses and Risks that Red Bull faces may easily be managed and set by Red Bull.

We can properly conclude that Red Bull has used the right target market and the right solution to communicate with the prospective market. More oddly enough, we can see that Red Bull has used a product and especially a marketing strategy that can simply be copied to different counties and culture. In other words, they have spoken the language of the children.

History

A red cape is not always necessary to get a bull in your direction; nowadays it has become available in a can in the hypermarket, supermarket, grocery store and the membership near you. This all is becoming possible because of a visionary man called Dietrich Mateschitz, who's the discoverer, modifier, and introducer of the internationally famous drink, Red Bull. It all were only available in Hong Kong, in 1982, when Mateschitz was at the hotel club sipping a famous local health tonic. While he was having he had a vision of marketing an Asian drink in the western countries. About 2 yrs from the vision, the Austrian Mateschitz teamed up with a Thai business man called Chaleo Yoovidhya to produce this product. Mutually they fiddled with the product, to take out the syrup dynamics of the product and make it fizzy. Canned in a sterling silver and blue pot, with a brand the shows two red bulls heading head-to-head against each other, hence the brand was known as Red Bull. ("Red Bull Creator Rides Wave of Success")

In 1987, the merchandise was then taken to Austria where it possessed its first groundbreaking success very quickly. In started heading international in 1992, when they got into Hungary. Red Bull is currently lively in over 100 countries, energizing the population and creating competition as they go along. One source mentioned that we now have over 150 "energy drink" brands, however, all inferior to the mighty Red Bull ("A REFRESHED CREW IS AN EFFECTIVE CREW"). With over 1 billion cans sold every year, Red Bull regulates 70% of the world's market talk about of energy drinks.

Background

Red Bull became strong when they created a high quality drink that is only made in Austria. Furthermore, most of its materials are synthetically made in pharmaceutical companies to grantee high quality and basic safety. Moreover, because of the ingredients of the product, it is stated that Red bull ("Red Bull FAQ"):

Improves performance

Improves focus and reaction speed

Improves vigilance

Improves mental status

Stimulates metabolism

However, the key reason behind the success of Red Bull is its advertising style. Red Bull will spend very little on typical or traditional marketing tools, like Television and Print advertising. Their marketing strategy is usually from the package and creative. Red Bull tends to be more active in sponsoring extreme locations and offering examples in local occurrences. Because of the fact that Mateschitz has been involved in Formula One racing for greater than a 10 years, he used the incidents to draw focus on his brand. Furthermore, he sponsored the World Stunt Honors, an total annual fund-raiser to help injured stunt workers ("Red Bull Creator Rides Influx of Success"). Additionally, some observers say that Red Bull uses the 'anti-branding' approach to advertising, where they broke the usual method of marketing and branding. Actually what they do was use the "buzz marketing" strategy or better known as person to person. With this plan, they associated their brand with the children culture and extreme and adventure-related activities, such as motor sports, pile biking, snowboarding and party music. Thus they targeted their brand directly to people from Era Y, the so-called 'millennials': people created after 1981 who have been thought to be cynical of traditional marketing strategies ("A glance at a Key Feature of Red Bull's Business").

The Buzz over Red Bull one of the young ones and their underground attitude has generated Red Bull's reputation as 'the drink' within that community. That's the reason Red Bull continues to use 'Viral' marketing internationally, where in fact the company would rather restrict the supply of Red Bull rather than advertise it, anticipating that growing amounts of aim for consumers to 'get the insect' and its reputation would spreads. Through this strategy, Red Bull has effectively captured 70% of the 1. 6 billion market ("A Look at a Key Feature of Red Bull's Business").

External Analysis

Porter Five Power Analysis

The external research is one of the most crucial steps a company should take to achieve to its goals and targets. Moreover, for taking this step we should be aware of the essence of formulating competitive strategy which relates to company and its exterior environment. Also, we know that the relevant environment is very extensive; encompassing interpersonal as well as financial forces, the main element aspect of the firm's environment is the industry or sectors in which it competes. Furthermore, caring for industry structure that includes a strong effect in determining the competitive guidelines is vital because it includes the overall game as well as the strategies possibly available to the firm. Makes beyond your industry are significant generally in a member of family sense; since outdoor forces usually have an impact on all firms on the market, the key is found in the differing capabilities of firms to cope with them. Michael porter has offered a distinctive framework for make an easy way to investigate. Michael Porter's platform for industry analysis is identified in his publication Competitive Strategy (1980). On this book Porter claims that we now have essentially five makes which determine the underlying structure of a business.

Rivalry among existing challengers, potential buyers, suppliers, potential entrants in to the business and Threat of replacement products are those five causes which can have positive or negative effects on industry structure by making the industry more or less competitive.

Potential Entrants

In this case the potential competition of red bull are soft drinks companies, which can produce energy drink devoid of adding bubbles. If the barriers of admittance are high, it is difficult for potential competition to enter the market. Three main resources of barriers to new admittance: brand devotion, absolute cost advantages, and economies of level.

Brand loyalty

Due to the done research, advancement in creating new energy drinks, proper and career advertisement, having many special happenings and sponsorships, and having high quality for its products makes Red Bull as well known brand with a strong brand loyalty which is a barrier for any new entrant to type in the power drink industry to compete with it.

Cost advantage

According to the Michael Porter, normally cost disadvantage is a huge barrier for companies to enter in an industry as new entrants since it can be cost advantage for existing companies in that industry. Also, companies by using cost advantages can contend and beat their competitors very easily because usually it is difficult for new entrants to complement their companies with the lower cost composition. Therefore, Red Bull because of Red Bull's superior creation and operation operations, and their experience in the energy drink industry, and control of its inputs regarding to their experience in producing red bull beverages, benefit the price advantages with keeping its quality in the advanced. Although there are numerous energy beverages existing in the industry with the lower price somewhat than Red Bull, as quality aspect they have got not cost advantages both in quality and price, so Red Bull is steps ahead from its competitors in this case.

Customer switching cost

In food and beverage industry there is no switching cost for costumers with taking into consideration the quality level, therefore it can be considered as risk for existing companies in this industry. In cases like this, Red Bull is not exceptional, so they need to keep their quality at the same level to not loosing their market show by approaching new entrants because it is real menace for the coffee lover.

Government regulations

One of big issues and always concerns for companies which prefer to go internationally is government regulation, also, in this case some European countries countries have problem with providing Red Bull and also have tried to ban it. They claim that Red Bull caused the death of folks in those countries. France, Belgium, and Sweden ban using the combination of Red Bull and alcoholic beverages. So, it's rather a threat to them in taking the marketplace share and developing a bad image for their brand. . ("French Ban on Red Bull (drink) Upheld By European Court")

Intensity of Rivalry

Rivalry in a few industries is characterized by such phrases as "warlike, " "bitter, " or "cutthroat, " whereas in other market sectors it is termed "polite" or "gentlemanly. " Energy drink industry has an intense rivalry because of a quantity of interacting structural factors:

Industry competitive structure

Due to the competition in the drink market, Red Bull targets non-price competitive weapon like offering exhilarating events, high quality products and sponsorship. In contrast with other competition Red Bull catch the attention of more costumers to its company by growing in 45%marketshare. Appropriately Red Bull has a major influence on its competitor's performance on the market because Red Bull is one of the pioneers in energy drink industry and many companies try to follow and consider Red Bull as standard.

Industry demand

In the drink industry, due to various proper adverts to encourage people to use and drink energy beverages (offering the image that people can take a flight) the demand for refreshments is increasing. Thus, this is an excellent point for the company because there are lots of opportunities for every company to load the existing demand and rivalry have a tendency to reduce in the industry, also you can find space for everyone to jump in enter the industry (growing stage), and the income of the company will increase which is a goal that each company is seeking it.

Buyers

Having strong and secure costumers are suppliers and manufacturers concerns, producers like to have costumers with variety level of buying and secure financial status basically in energy drink industry especially Red Bull costumers (potential buyers) are wholesalers and big retailers. These buyers choose the energy beverages through the business or its representatives, and resell these to supermarket, pubs, restaurants and end users. Red Bull faces buyers with high level of bargaining vitality, and it is real risk for Red Bull. Significant reasons for this high bargaining electricity of buyers in cases like this are; the switching costs in the drink industry are incredibly low. So, Red Bull potential buyers can change from Red Bull to other energy drink companies which produce it with lower prices without any difficulty. Also, in most cases energy drink customers (stores and wholesalers) purchase products in large amounts, and it is obvious that a lot more buying in amount, a lot more bargaining power the customer has. To allow them to use their power to reduce the price of energy beverages.

Suppliers

The bargaining electric power of suppliers is the same account like bargaining electric power of customers but from other part. Red Bull company has both kind of suppliers as bargaining ability, some quite strong and others weakened, to allow them to balance between them. For instance, the provider of Glucuronolactone is Glaxo Smithkline Company. Red Bull energy drink purchases their Glucurnopolacton inputs out of this company. So the bargaining power of this supplier is high on Red Bull. However the other ingredients are constructed from several small suppliers, and Red Bull has the bargaining power to them. Also, Red Bull has many programs and substitutes suppliers because of its normal raw materials, to allow them to transition from any dealer to cheaper and even more flexible one.

Substitutes

All makers always bring the matter of substitute products for his or her products and always looking for ways to protect and make it through themselves from this occurrence. Energy drink industry isn't an exception, so players in this industry always try to keep quality level high, convenience price and other thing which might make costumers more satisfy. Coffee industry can be considered a threat for energy drinks as a result of existing level of caffeine in espresso and it's rather a powerful potential product substitute for energy drink. Therefore, Red bull must look after its rates strategy and product quality to keep its costumers and satisfy them more day by day that they were successful due to information not only Red Bull could protect its products against other substitutes but also, they have increased in their market talk about in US market by 45%.

Industry Analysis and Peer Review

Industry Characteristics

Beverage industry is divided into many categories such as alcoholic vs. non alcoholic, (hard vs. carbonated drinks) and within carbonated drinks still there is certainly other segmentation such as carbonated soft drink (CSD) and non carbonated soft drink. "Carbonated ENERGY BEVERAGES account for not even half of the total volume. This number is seriously skewed however by the popularity of still brands in Asia "(Canadean Press release)

According to Drink Process, "in 2004 the U. S. non-alcoholic refreshment market totaled 14 billion conditions (192-oz). Carbonated soft drinks made up 73. 1% of the full total with non-carbonated products composed of 13. 7% and packed bottled water accounting for 13. 2%. People in the usa spent around $92. 9 billion each year on refreshment beverages".

Energy drink is a relatively new product unveiled in 80's and has been growing noticeably "with the marketplace more than doubling in proportions since 1998" (Canadean Press release ). The following chart is evidence of this inevitable growth and the fascination of this progress for drink manufacturer. The industry has been experiencing a substantial growth and still growing at the velocity that draws the best players in smooth like Coca Cola drink to enter into to this high margin business.

Food and beverage market are critical enough that out of 100 new product development 90 NPD fails. The failing results from a poor interpretation of consumer's pattern and translation of these to opportunities. Austrian company, Red Bull, as a pioneer pattern settler has made its lot of money from their unique strategies in advertising, marketing and other product's characteristics such as Product packaging, Flavour, color and Product lay claim.

Global consumption

According to Drink digest report, Asia is the most significant leading market in ingestion of energy drinks followed by American Europe and THE UNITED STATES as the second and third market segments.

Asia has been loosing a few of 20% of its market talk about is past 6 years. However, this decline has been offset by the next and third market due mainly to the steady expansion in market of carbonated E. D in THE UNITED STATES. "UNITED STATES market is currently almost 40 times higher than it is at 1998"

Peer Review

In North America today more than 200 energy drinks existed in US. Relating to bevNET. com, after having a demanding marketing research the best energy beverages are "AMP by Pepsi Cola, KMX Red by Coca-Cola Company Red Bull by Red Bull North America".

"Red Bull's market dominance seems promised. No other rivals have either the distribution channels or, more importantly, the posture of rebellious infamy to be considered real hazards".

Year 2001, in UK energy drinks market "21 new drinks" have been released that would have push the red bull into a competition. However, red bull can still enjoy being a market leader.

In the next desk there are representations of top 14 non- alcoholic markets where some of them are in the specific market of the energy drinks.

Coca-Cola (Juice, Soft Drinks, Normal water) ($21bn)

Suntory (Normal water, Soft Drinks) ($4. 4bn)

Nestle (Coffee, Soft Drinks, Water) ($19bn)

Starbucks (Coffee) ($4. 0bn)

PepsiCo (Drink, Soft Drinks, Water) ($10bn)

Sara Lee (Espresso) ($2. 7bn)

Kraft Foods (Caffeine, Powdered Beverages) ($4. 6bn)

Tchibo (Caffeine) ($2. 7bn)

Unilever (Tea ) ($4. 5bn)

Red Bull (Energy Drinks) ($1. 6bn)

Cadbury Schweppes (Soft Drinks) ($4. 5bn)

Cott Corp (Drink, CARBONATED DRINKS) ($1. 4bn)

Danone (CARBONATED DRINKS, Normal water) ($4. 5bn)

Ocean Spray

Source: http://www. mind-advertising. com/sectors/sector_softdrinks. htm

Industry Life Cycle

Energy drinks were actually pioneered by Asian companies, but they became popular in European countries the late 80's with the introduction of Red Bull. There are more than 200 energy beverages been around in US market only and this amount is increasing due to the high margin of this business.

In 2004, carbonated soft drinks posted the development of 1% which is unlike its standard trend, circumstance of growing 2% to 4%. Noticeably, this inescapable growth was motivated by Diet and Energy beverages. While other soda pops posted volume level change of one Digit, brands like Red Bull and Hansen Natural reported the 45% and 56% of positive volume level change in 2004.

The market, now believed to be well worth $10 million, has been predicted to increase to $300 million or even while much as $2 billion in the next few years. Double digit growth on the market is the key factor adding to Energy drinks life routine in its embryonic stage (development).

Since the marketplace is not old enough, the number of players are increasing and even the Coca Cola and Pepsi will be the new entrant which add to the well-built assumption of embryonic phase.

Brand loyalty and high prospects are still doubtful in this level and it's really because the consumers are still exposing to services and new says. Thus, players are struggling for product feature expansion such as low-carbs and sugar free plus new product's cases such as "improve attentiveness, reaction time and stamina. "

After benefits of Red Bull in past due 80's, industry visited an introduction phase. By 1998, how big is the industry doubled but still growing with a fast pace following highlighted area in the graph is an approximate stage of the life span cycle at the moment.

Internal Analysis

Value Chain

Logistical issues at Red Bull in of high importance. Because of the fact that all materials in debt Bull drink is synthetically made by pharmaceutical companies, they ensure that their products are carefully completed to maintain the product quality and avoid unnecessary costs. Red Bull makes sure that they align with high quality logistics provider to achieve their tactical goals. Red Bull seeks to have web-based visibility on their source string, thus they bottom part their logistical activities or selection on:

Flexible warehouse network

Transportation management capabilities

Strong information technology offering

With 1, 600 employees working for Red Bull world wide ("Gulf Reports, Red Bull designs to set up Dubai plant"), Red Bull required those requirements because they are experiencing year-after-year of high expansion, which make the inventory forecasting and management challenging. That is why logistical issues have become increasingly important, and that's the reason they choose to outsource the logistics to companies that can adhere to their network of multi-client warehouses needs ("Red Bull & OH Logistics"). Interestingly, Red Bull uses small distributors in small local markets, if those small vendors don't perform up to Red Bulls specifications they set up a warehouse and thrust young people to dreams their vans with Red Bull's product and send out it every where. This way, the small marketers generally break even within three months and are profitable within six ("A Bull's Market - The marketing of Red Bull Energy Drink").

Primary Activity: Operations

There is little information about the functions procedure for Red Bull. However we will enlighten you with the material and quick information about the packaging company that Red Bull deals with.

The great product which is provided by Red Bull one of its main elements of success. Known for bettering performance, improving focus and reaction swiftness, improving vigilance, bettering emotional status and stimulating metabolism, Red Bull's top secret is at its materials. The materials in each Red Bull drink (250ml) consist of:

Taurine (1000mg)

Glucuronolacton (600mg)

Caffeine (80mg)

Niacin (20mg)

Vitamin B6 (5mg)

Pantothenic Acid (5mg)

Vitamin B12 (0. 005mg)

According to Red Bull, It is a combination of all ingredients along, which bring about Red Bull's benefits ("Red Bull, Ingredients"). .

The packaging procedure for Red Bull is totally done in Austria. Plus the provider of Red Bull's cans is Rexam, and they are considered to be the world's greatest provider of beverage cans. Rexam produces different kinds of cans for different establishments, however almost 1 / 2 of their revenues result from Coca-Cola and Pepsi Cola. Moreover, industry estimates present that Rexam gained about $22 million from the sales of Red Bull cans ("How Does Red Bull Package Its Product?").

Primary Activity: Marketing and Sales:

With the control of 70% of the 1. 6 billion market (about 1. 12 billion), Red Bull has achieved all this through intensive unconventional marketing strategies. Focusing on young people, mainly the Y-generation, Red Bull has employed eccentric marketing tools that has extremely effective on the mark market. The strategy of sponsoring local activities like the Red Bull music academy in america, parachuting in South Africa, Go-Karts in Kuwait, and so many more in different countries has achieved its target of attracting its target market which gets thrilled when observing such sports. Some of the strategies used for marketing Red Bull include:

Using pick-up trucks as mobile shows, coated blue and silver with a huge can of the drink mounted on top of the vehicle.

Designed to be eye-catching, the unit were targeted at promoting the red bull brand as more youthful and slightly 'off-the-wall'.

Cans of the drink were also provided absolve to people on the street who had been identified as being in need of energy.

Red Bull was presented with to membership DJs, vacant cans would also be kept on furniture in hot areas such as trendy pubs, night clubs and pubs.

Secondary Activity: Technology

The information about the technology that Red Bull uses was quite scares. However we're able to safely and securely say that Red Bull little activity done on their R&D area because Red Bull does indeed enjoy any sort of economies of scale. Red Bull has only 1 main product, which is the Red Bull energy drink and lately they introduced the new Red Bull energy drink 'sugar-free'. Hence, the primary difference between the original Red Bull drink and the sugar-free drink is that it has 0g of sucrose and 0g of sugar, where the original product has 21. 5g of sucrose and 5. 25g of glucose. In addition, each 'sugar-free' drink has only 8 calorie consumption (European union)/ 10 calories (USA), yet it generally does not loose any of its energetic effects ("Red Bull, Ingredients").

Secondary Activity: Man Recourse

Red Bull is well-known for doing what they preach, specially when it involves recruitment. Due to the fact that Red Bull encourages their product as a Hip and young product, they make sure to recruit staffs that are young, touching youth culture, active and innovative. For instance, they make that happen by recruiting university or college students as 'pupil brand managers' to market its product among young student groups ("What Sort of People BENEFIT Red Bull?"). However their recruiting will not happen by Red Bull themselves, but they makes sure that it is executed by all the outsourced activities. However, it is well known that most of Red Bull's 1, 600 employees are marketing experts and are the real movers of the Red Bull drink ("Marketing Attention, Red Bull Car").

Group Customers and Market Segmentation

As it is known any successful company should have a certain customer group. The clients that were targeted by Red Bull were the ones that were looking for pleasure, alertness, and attention depending on age, status, and lifestyle. Four consumer categories were Red Bull's concentrate on under age 16-30: students, membership people, sport people, and employees.

College students were the main concentrate on of Red Bull. Since college students look for something that could enhance their concentration on doing their assignments and tasks, and staying instantaneously for learning for examinations then Red Bull is the best solution for them. It could improve their concentration in their mastering Furthermore; Red Bull has used this group to enhance their promotion. According to Biz/ed, put celebrations those students were emboldened to advertise the product in the campuses of the universities as what they call them "student brand managers". Those students gather the information and make a report of a market data research to the business. Based on that strategy and the young ones generation (senior high school and schools students), Red Bull was able to propagate the reputation and the reputation of the drink and focusing on supplying the merchandise rather than making use of the original marketing means of promotion ("A Look at an integral Feature of Red Bull's Business").

The second group of Red Bull customers are the night membership people, since the drink has some chemicals that would boost the person's emotional position. Additionally, Red Bull is offered in the nightclubs depending on the cultural background. For instance, nightclubs in Dubai offer Red Bull for the people who do not consume alcohol like the Muslims, which made it a major substitute for alcohol compared to that group. However, Red Bull is still individually mixed with alcohol to create both Red Bull highness and the alcoholic beverages discomfort. Furthermore, Red Bull in addition has made music incidents for those sets of customers like the "Red Bull Music Academy in 2005" in Seattle, Washington in the United States. ("Red Bull Music Academy 2005")

For the exercise that the drink offers, Red Bull in addition has promoted the product for the sport people. Among those people, there will be the athletes, the racing individuals, the airborne-sport people, water-sport people, the bikers, the skateboarders, and the skiers. Red Bull highly endorsed this group with many sport celebrations, and one of the famous one among those is the "Red Bull Dolomite Man" that took place in Austria in 2005. ("Red Bull Dolomite Man")

Red Bull's modest groups will be the white-collar and the blue-collar staff. Red Bull can support white-collar workers to concentrate more face to face to improve their performance, and it could also help them stay over night if she or he needed. The drink would also permit the blue-collar staff to work extra hours with out the sensation of exhaustions for the physical exertion that the drink provides. However, Red Bull didn't concentrate on this group, so there were no special attempts aimed towards them.

Within the four teams, there a considerable amount of customers who look for diet product. For your category, Red Bull produced the sugar-free Red Bull to combine the diet customers with rest of the customers that are within the four groupings.

Business Level and Universal Strategy

In the common strategy Red Bull there are two views, there's a universal strategy from energy drink market point of view, and there is a universal strategy from soft drink market perspective. From the energy drink market perspective, since Red Bull has few economies of scope, the strategy followed by Red Bull to check out is differentiation. The price of the drink is about 5Dhs in the UAE, which ultimately shows the clear differentiation of the product, especially in market where everyone is competing on a single customer segment. According to Biz/ed, Red Bull was able to create a strong brand image through: using Red Bull vehicles that experienced big cans with them, supplying free cans to the people, and providing Red Bull cans to membership DJs ("A glance at an integral Feature of Red Bull's Business"). This strategy made Red Bull to be the marketplace innovator of 70% market in the vitality drink market.

From the soft drink market industry vast perspective Red Bull can be applied the Focused-differentiation universal strategy. Red Bull has a very good brand image in terms of soft drinks industry. The drink can only maintain this image through focus-differentiating the product by separating their customers according to the demography (time, lifestyle, culture) and the geography, because the industry has many hostile competitors with a powerful brand image like Coca Cola and Pepsi.

SWOT

Strengths

Industry leadership

Throughout the entire world, Red bull is the first choice in the energy beverages market with gross annual sales of billion us dollars. According to the statistics, in calendar year 2003 red bull achieved 80% brand share of the energy beverages market in the united kingdom. Also in the European countries, they produce two-thirds of overall level in the region. Furthermore, Red bull is rivalling in 13 Western world European countries and is the main innovator in 12 of the and other top 20 brands are having only 17% of share. Since year 2000 (compare to 1990s), it's been a clear shakeout, and fewer new brands are launching services to the market. Furthermore many products proposed by leading drink manufacturers cannot compete with Red bull on the market, such as Coca-Cola's Burn. ("Red Bull SWOT Analysis")

Marketing capabilities

The successful marketing strategies and consumer knowing of Red bull launched stimulation beverages to the european market and has resulted practical drinks expansion throughout these years. Red bull is increasing its consumer brand understanding by employing targeted marketing campaigns that focuses on 18-25 age ranges. Also the business has been differentiating its product by sponsoring dangerous activities such as Method 1 traveling; free snowboarding; BMX biking etc. Furthermore, Red bull firmly promotes itself by which consists of slogan: "Red bull gives you wings". ("Red Bull SWOT Analysis")

Alliance with major distributors

Red bull has widened its brand's marketing distribution by establishing a link with Cadbury Schweppes in Australia. This connection allows consumers to get access to Red bull over the nation. As a result of this relationship, sales of Red bull are 40% higher in comparison to this past year and looking to surge significantly year-by-year. Furthermore, this collaboration can reduce competitive risks from Red bull's competitors and broaden its sales opportunities due to the fact that Cadbury Schweppes can make it to reach programs such as vending machines, food courts, universities, sports activities a travel facilities, nursing homes etc. Another collaboration that Red Bull THE UNITED STATES does was with Ozburn-Hessey Logistics, where Red Bull observed its supply chain get boosted this past year. OH Logistics, Red Bull's one national provider, completed more than 16, 000 shipments of the drink during 2004 and opened five locations in five claims in the first 90 days of procedure. ("Red Bull & OH Logistics") ("Red Bull SWOT Analysis")

Weaknesses

Lack of innovation

In season 2004 some new energy beverages have been came into into the market. One of these is called Natural Energy Energy Cell, which is Canadian supplement and blood sugar drink and it is qualified by World Wrestling Entertainment. The product has noiseless the same effects that Red bull has except that it does not contain Taurine and has less level of caffeine compared to other energy beverages. Furthermore it comes in 330ml PET bottles, which makes it look different compared to Red bull (250ml cans) and other challengers. However Red bull only made little changes to its product format throughout these years and has been left behind in comparison to other competition. ("Red Bull SWOT Analysis")

Reliant on small product base

Red Bull Company only offers energy drinks along with a glucose free variety, which is tranquil at risk due to the market fluctuations. What makes it riskier is the fact that energy and athletics drink is the tiniest sector of the overall carbonated drinks market. Nowadays, consumers' passions are changing toward better alternatives such as no carbonated, decaffeinated, fresher beverages. Therefore Red bull will definitely advantages from launching better and more lucrative drinks in to the market. ("Red Bull SWOT Analysis")

Marketing expense

In order for the Red bull to boost sales, it needs to spend a great deal money on advertising. The Energy beverages have strongly connected to fashion and children trends, therefore the company must plan itself as consistent with this in the face of huge opponents such as PepsiCo. The competition is so strong that even though Red bull is spending large sums on promotional initiatives, other competition are also making an investment a whole lot money for promoting their products. This in turn results in a smaller come back for Red bull. ("Red Bull SWOT Analysis")

Opportunities

Diversification of retail outlets

In order to increase sales, Red bull lately is using trade as a fresh route to increase sales. Vending machines work advertising tool and sales tools, because of the constant vulnerability that can create. Companies such as Coca-Cola and Pepsi have been using this path for such a long time and companies such as Glaxo Smithkline and out span have also got into the market. Red bull is also producing vending machines, which shows that it's committed to diversification of its distribution network and faced industry developments. ("Red Bull SWOT Analysis")

Extension of product line

Because of comprehensive marketing and advertising budgets that are had a need to introduce a fresh product from a fresh entrant to the marketplace, the likelihood of new competition entry into the market is suprisingly low. It's more likely that a new product as an expansion of an existing brand will be successful best in the non-cola carbonates sector of the marketplace. By introducing a new product, Red bull can use its strong brand understanding in promoting its new product or in the other words, it can capitalize on its strong consumer knowing of its brand. ("Red Bull SWOT Analysis")

Geographical expansion

Red bull has a broad geographical reach, which is because of its sales to more than 100 countries. Red bull is currently entering the developing markets such as India. It also has a solid distribution offer with Support Shivalik and Narang Hospitality Services to be able to control and send out its logistics of the drink. Now Red bull has began with North, East and Central India, however in the long-term they have to expand into other countries. ("Red Bull SWOT Analysis")

Threats

Public health concerns

Red bull is considered a dangerous drink in a few countries. For example, France suspended Red bull due to its high caffeine containing drinks content and some experts think it could be deadly in a few situations. Also EU's high judge declared that excessive use of Red bull is a genuine risk to public health. Denmark also suspended its utilization. Furthermore, Turkey, Ireland and U. S are worried about its use. In Norway Red bull is being used as a remedies and in Japan it used to be sold in pharmacies. These issues can damage the reputation and image of Red bull. ("Red Bull SWOT Analysis")

Maturing market

The marketplace that Red Bull seriously depends keeps growing and becoming older, hence there's a belief that the mark market is saying physically, emotionally and psychologically to improve. Red Bull's goal, generation Y, is becoming older, and maybe their change my make Red Bull's marketing efforts ineffective. ("Red Bull SWOT Analysis")

Consumer knowing of health and well being

The increasing progress of water in bottles sales is an indicator that people have become health conscious. Two decades ago the per capita ingestion of water in bottles was 1 liter, whereas now they have risen to 35 liters. Even though Red bull has launched its sweets free version but nonetheless the high amount of levels of caffeine is a problem for consumers. ("Red Bull SWOT Analysis")

Recommendation

After considering the actions and procedures of Red Bull, and uncovered that they have so far achieved success in their segment of the industry. However, some loopholes have been found out that must be considered by Red Bull. The primary menace that is clinging over Red Bull is having less variety. Red Bull concentrates mainly using one product, which creates a form of risk that other major companies like Coca-Cola and Pepsi-Cola could come in with a better product and more powerful advertisement. Despite the fact that Red Bull varied insurance firms a sugar-free energy drink, it is known as to be insufficient to prevent more powerful companies come and eat out of the energy drink market show. Thus, we highly guide Red Bull to focus on horizontal and unrelated diversification to expand their product collection and reduce their risk. Another recommendation is to grow their target market to increasing the market size, hence take up a in advance diversification form. The current target market gets more mature and changing, which will be the student, sports athletes, and clubbers from era Y. This change will make the current marketing efforts less-effective, hence ether the marketing styles must change, or they must expand their target market.

Conclusion

Through our observation of Red Bull's company we figured Red Bull mainly implements that same strategy globally. The marketing strategy, for example, focuses on the same marketplace, like the students and sportsmen. Moreover they sponsor local events in most of the countries that they are active in. Quite simply, Red Bull's strategies have successfully proven themselves to be universal, where they can be cloned in different countries. Hence, their activities have become pretty much universal. However, their strong position should never keep them from the fact someday a solid competitor will come in and push them out of the market. Thus, they need to reconsider their diversification to keep up or even grow their current position.

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