Strategic Analysis of Red Bull GmbH

3880 words 16 pages
Red Bull Gives You Wings
Arguably one of the most entrepreneurial firms of recent times, there is no denying Red Bull GmbH is a powerful force. Founded in the mid 1980’s by Austrian entrepreneur Dietrich Mateschitz created the unique formula providing millions of people with ‘wings’ on a daily basis.
Back in 1984, Mateschitz discovered the need for a coffee alternative. Alongside Mr Yoovidhya they developed Red Bull from Krating Daeng – a thai version of Red Bull – turning the beverage into a carbonated, less sweet version they believed would appeal to Western tastes. The production of Red Bull led them to create a new category within the soft drinks market – that of ‘energy’ drinks.
30 years on and their original product is as
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This may leave Red Bull vulnerable to market fluctuations, especially as the energy drink category is the smallest within the soft drinks market.
Marketing expense – Red bull spends about 40% of sales revenues on extensive marketing techniques to boost the lifestyle brand recognition and drive sales.
Competition - In a recent move the two largest soft drinks companies (Coca Cola and PepsiCo) have both chosen to partner with competitors to Red Bull – Hansen Natural Corp and Rockstar. This may challenge Red Bulls established business model given the global manufacturing reach, R&D and marketing strengths of these two strong companies.
Single source of manufacture - Not only does this mean high distribution costs relative to competitors, it means Red Bull is also susceptible to Austrian tax law and tariff agreements.
Opportunities:
Further growth in key markets – With the largest population of target consumers in India, China and Indonesia Red Bulls focus and strategy in Asia will be critical if they are to continue to retain market leadership.
Expanding their product line – Given the recent concentration of the market by Coca Cola and PepsiCo, new competitors may struggle to enter this market giving an opportunity for Red Bull to focus resources on their already established brand. This would capitalise on a strong consumer awareness of the brand with the potential to grow merchandising revenues.
Geographical expansion – Red Bull could move to produce

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