Judo in Action

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Introduction

Judo in Action paper includes many mini cases discussing strategic decisions. The two mini cases to be discussed in this submission is Softsoap & Red Bull.

Softsoap is a product of Minnetonka corporation which was founded in 1964 by Robert Taylor. Minnetonka witnessed a major shift in the strategy by shifting towards liquid soap from the conventional bar soap that had a competition with big players like P&G and Armour-Dial.

The launch of Softsoap in 1980 with $7 million advertising increased to $30 million advertising in only one year in an attempt to increase total sales from $25 million to $70 million. Only 2 years later, P&G started to roll out to the liquid soap market with its Ivory brand name. hence, P&G quickly rose to take 30% market share. In 1985, liquid soap market was estimated to be a $100 million market. Just after 23 years of the establishment of the Minnetonka, Tylor decided to sell Softsoap to Colgate-Palmolive for $61 million.

Red Bull was founded by Dietrich Mateschitz, an Austrian university student, in 1987. Red Bull popularity took off after being widely used by windsurfers, snowboarders and other adrenaline junkies.

Later, Rumors were in the advantage of Red Bull’s side as it increased the popularity of the drink between youth and the targeted market segments.

Red Bull decided to enter the US market in 1997 after being test-marketed in California. Red Bull was very patient in implementing its strategy in the US, they focused in five accounts in an rea instead if pursuing every potential vendor. The company employed consumer education teams to increase the consumer awareness of its product. In addition to that, they sponsored extreme sporting events such as Red Bull Cliff Diving.

A very interesting strategy was the decision to own the distribution channels and to build its own distribution network. Even distributors who carried other products agreed to have a dedicated staff for Red Bull products alone.

Competition in the energy drinks market started when coca cola launched KMX followed by dubbed burn in the U.K and Australia. in addition to coke, Anheuser Busch, the largest beer manufacturer in the world, launched its own energy drink benefiting of the similarities between beer and energy drinks.

By 2001, the energy drink industry had grown to $275 million. Nevertheless, sales of Red Bull in 2001 grow by 118% from the year 2000.

Reflection

Q1 Did Softsoap and Red Bull have a competitive advantage when they entered the market?

Softsoap had the competitive advantage of being the pioneer in the liquid soap market. In 1997 they developed the incredible soap machine which dispensed liquid soap in a pump-operated plastic bottle. By this development they played solo in the liquid soap market at least till the competition began.

Similarly, Red Bull had a competitive advantage of being the first producer of energy drinks getting away from the conventional soft carbonated drinks and marketing its product as an energy drinks that keeps consumers alert. Red Bull had another competitive advantage which is its distribution strategy and how it is controlling its distribution network.