Red Bull Swot Analysis

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Red Bull SWOT Analysis

Red Bull is one of the few that dominate the energy drink business, controlling nearly 43% of the market. The original Red Bull Energy Drink was first introduced to the market in 1987 and is now available in 171 countries worldwide. One of the strengths in the thriving business are their marketing strategies. Red Bull is constantly hosting sporting events to grab the attention of consumers and promote their brand. One of the most successful publicity stunt was the stratospheric free fall in 2012. The Austrian skydiver, Felix Baumgartner, rose to 128,000 feet in a stratospheric balloon and completed a free fall jump that had him rushing towards Earth at supersonic speeds before parachuting safely to the ground. This world record caught the attention of 8 million people worldwide (Chun, 2012). Another aspect that contributes to the success of Red Bull’s branding is their athlete sponsorships. Red Bull continues to sponsor professional athletes from different parts of the world in various sports to further promote their products. By doing so, consumers will associate Red Bull and their products with these athletes. There is an increase in perceived legitimacy from the athletes’ endorsement, even though the product has not changed at all (Olenski, 2016). Red Bull’s ability to effective promote and advertise their products are idealistic in a business aspect for their specific market. Their slogan “Red Bull gives you wings” is known to be iconic and consumers associate the slogan with the product it is representing. With these marketing strategies as their foundation, Red Bull has established a strong brand and continue to dominate the sports energy drink market.

Red Bull as a company has weaknesses that currently restrict its ability to develop as a brand and gain market share in the energy drink market. Internally, Red Bull needs to market their new products to other countries rather than only catering towards the U.S. Their

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competitors like Rockstar and Monster have been able to produce different nutritional baseline drinks globally and allowed them to attract a more diverse consumer base, giving them an edge over Red Bull. Red Bull has decided to update their product line with the Red Bull Edition, offering a new variety of flavors. However, there is a whole other side of the world that is still oblivious to the change that Red Bull has done. This progress needs to be marketed so that they can prove to their consumers that they are working on their product line in an attempt to meet the demand. In regards to the world market share of energy drinks, international consumers that crave an alternative flavor that differs from the iconic Red Bull taste will not be aware without the proper promotion. This has then affected their sale rates, for as compared to companies like Monster, which has a reputation for diversity and multi flavored drinks, which had a 9.2% increase in sales as compared to the previous year (2015), Red Bull was only able to grow 2.4% (“Packaged Beverages,” 2016). If Red Bull’s main drink does not sell as well as it needs to then Red Bull’s profits and growth will be greatly affected. As for external weaknesses, Red Bull decided to keep their manufacturing “in-house” and has not had the opportunity to rely on other delivery channels that companies like Monster have been able to use. As seen through Monster’s partnership with Coke, which sees “Coke owning close to 20% of Monster” (Mitchell, 2015). By having Coke as a partner, Monster is able to diversify its distribution channels while also looking and ways to be more cost effective in production. Red Bull has maintained its independence, but they need to look at ways to revamp their distribution or advertising if they want to keep the lead it has over Monster. If Red Bull then wants to grow as a company and be better protected against these other competing companies, they need to seek ways to address these concerns.