SWOT Analysis of Red Bull | Red Bull Strengths, Weaknesses, Opportunities & Threats
1. What Red Bull?
Red Bull is an energy drink sold by Red Bull GmbH, an Austrian company created in 1987. It is the best-selling energy drink in the world, with 7.9 billion cans sold in a year (as of 2020).
It was created by Dietrich Mateschitz, an Austrian billionaire businessman. He is the co-founder and 49% owner of the Red Bull energy drink company.
It is headquartered in Fuschl, Austria.
Its slogan is “Red Bull gives you wings” and their logo consists of a red bull in flight with its wings outstretched.
2. How is the Business Model for Red Bull?
The business model of Red Bull is quite simple. The company sells a drink that is caffeinated and an “energy drink” that is supposed to give the drinker a burst of energy.
The makers of the drink have a sponsorship agreement with many high-profile athletes. The company also has a publishing company which publishes a variety of magazines, including Red Bulletin.
Red Bull has a strong online presence as well. They have a website which promotes the drink and their activities.
The company also has a major YouTube channel. Red Bull has been in the business of selling energy drinks for about 25 years now.
The customer experience that comes with a product or service adds to its value. This opens the door to increased customer demand and, as a result, greater prices.
This necessitates adjusting the client experience, such as through fine-tuning promotions or store layouts.
A product is effective only if it is good for what it supposedly does. The more customers feel they need something, the more likely people are to buy it. A brand has the potential to be this source of motivation.
A brand becomes synonymous with certain products or substances. This gives them added credibility.
This also provides them with a larger market niche, enabling them to be more profitable in that one specific niche, which is good for selling items in that niche.
This is the process of transforming intangible, usually non-competitive goods into products that are competing.
Some of the alternatives for this are artificial intelligence, investment banking, digital marketing, and robotics.
3. How does Red Bull makes money
a) Advertising: It is done through big-budget advertising campaigns. The best known of which is the “Red Bull Stratos”, which was broadcast by the Manufacturer around the world for many countries.
The company puts its money into various channels, such as TV ads, print ads, billboard ads, radio ads and internet banners.
b) Product sales: The Company sells its energy drinks in different countries all over the world, both online and offline (in retail stores).
c) Other sources of revenue: It also receives royalties for its patent rights on all drinks that include Red Bull’s key ingredients.
4. Revenue and Financials of Red Bull
In 2021, Red Bull had an estimated brand value of 15.99 billion euros, up from 15.11 billion the year prior.
Red Bull sold 7.9 billion cans in 2020 with a total revenue of 6.307 billion euros, the Company has 12618 employees as of 2020.
5. Competitors of Red Bull
a) Monster: It is a popular energy drink in the U.S and in Europe and one of Red Bull’s main competitors.
b) Rockstar: It was launched in 1997 and it is one of the main competitors of Red Bull, due to its similarity with Red Bull in its ingredients and effects.
c) Nespresso: It is the chief competitor of Red Bull in the coffee market due to its focus on coffee sales.
d) Pepsi: It is a popular energy drink in Australia and New Zealand, it is a brand that has a similar structure to Red Bull.
e) Coca -cola: It is a popular energy drink in Asia and it is a major competitor in Asia. Since its launch in 1962, it has expanded into almost 50 countries and has become the world’s largest beverage company.
f) Coca-Cola company: It is a major competitor of Red Bull in Europe due to its success in European markets.
6. Partners of Red Bull
a) Coca-Cola: Coca-Cola and Red Bull formed a partnership in the year 2011, allowing customers to refill Coca -cola cans with Red Bull.
b) McDonalds: Red Bull and McDonald’s formed a partnership allowing customers to purchase and drink Red Bull at McDonald’s restaurants.
c) T1 Entertainment & Sports; It is a sports and entertainment company founded by Red Bull GmbH.
d) Oracle: Oracle is Red Bull’s strategic partner of Oracle is Red Bull’s strategic partner of Artificial intelligence.
e) Google: Red Bull and Google formed a partnership between them in 2015. This partnership allows the fans to gain access to exclusive content through Google
f) Honda: In 2017, Red Bull joined forces with Honda to launch the world’s biggest dream-inspired playground for children.
g) Copenhagen Flames: Red Bull signed a deal with the best-known European esports team, which was named Copenhagen Flame.
7. Red Bull Business Strategies and Plans:
a) Red Bull is its top competitor in the energy drink market, but it wants to expand this area. Therefore, it has focused on the target areas of the U.S., China, and Europe.
b) Red Bull wants to expand more of its business by gaining an effective strategy of how to do it by using others’ resources or resources of interest to them, whether it may be technology or other companies.
c) Expanding its product portfolio: Red Bull is planning to expand its product portfolio in order to increase their market share. This will be done by creating unique energy drinks that are different from the current ones by using unique ingredients.
d) Improving their strategic planning: Red Bull intends to improve their strategic planning by finding new business areas, expanding business areas, and improving their products.
e) Red Bull is working with others in order to expand themselves and they are willing to work with anyone, whether it be competitors or non-competitors.
8. SWOT Analysis of Red Bull
Strengths of Red Bull
a) Unique marketing strategies: they have created their own unique marketing strategies which are helping them to expand their market
b) Energy drinks are cheap to produce: Red Bull is able to produce energy drinks at very cheap prices, making their production more profitable
c) Unique ingredients of Red Bull products make them unique in the market
d) Red Bull’s unique product portfolio is gaining a lot of popularity in Europe and North America. This has also increased their sales figures
e) Market Dominance: Red Bull is gaining a lot of importance in the energy drink market, this has enabled them to expand their business
f) Savings cost: Red Bull is able to save costs by not having separate distribution channels for different markets
g) Healthy Options: Red Bull has created healthy options of drinks which are gaining popularity with the people
h) Brand Awareness: Red Bull has given importance to their branding, which has given them a lot of brand awareness in the market
i) Red Bull’s marketing campaigns are usually quite innovative and they are geared towards addressing their customer’s needs
j) High Price Tag: people are willing to pay high prices for their products due to their quality and effects.
k) Better Brand Visibility: Red Bull has given importance to its branding, which has given them a lot of brand visibility among the energy drink market
l) Financial Strength: Red Bull is one of the most profitable companies with a total revenue of 6.307 billion euros in the year 2020
Weaknesses of Red Bull
a) Lack of internal awareness: Due to lack of internal awareness, Red Bull is unable to manage its employees appropriately. It isn’t able to effectively manage its products in order to gain competitive advantage in the market
b) The brand image was impacted due to legal issues regarding high caffeine content: The brand image of Red Bull was impacted as a result of legal issues regarding the high caffeine content. In many countries, Red Bull is not able to sell their products due to this reason
c) Very Expensive: Products that are positioned and sold as premium and have unreasonably high price tags have a hard time attracting the middle and lower classes. It also puts businesses at risk of losing customers and market share to newcomers with lower-cost items.
d) Lack of Variety: It provides only 2 energy drinks in the market, this is a risk to be followed by other emerging energy drink brands.
e) Offering Unhealthy Products: Consumers are becoming more health-conscious, and they are avoiding sugary and unhealthy foods. Red Bull, unfortunately, is resistant to change and continues to rely on dangerous energy drinks.
f) It wants to create unique energy drinks with unique ingredients, which is not always possible due to health issues
g) The sugary sweet taste is not always well received by consumers
Opportunities of Red Bull
a) Engage in Sports Fully: Red Bull can make a name for itself by becoming a sponsor of more sports teams, as well as individual athletes that have a high brand visibility
b) Extend Product Lines: Red Bull is planning to create new products by using unique ingredients. If this happens, Red Bull will have access to more consumers and will be able to expand its powers in the market
c) Focus on Emerging Markets: Red Bull is planning to focus on the emerging markets like China, India, and Mexico due to high potential of growth
d) Focus on Online-to-Offline Marketing: Red Bull has shown great signs of success in the online world. It has started getting more profits online than offline for the first time ever. These successes can be extended by focusing on this area
e) Expand into Business-to-Business Market: It should expand its business by targeting businesses for its other products.
Threats of Red Bull
a) Competition from other energy drinks: Red Bull is currently facing stronger competition from other energy drink brands. It has a great competitor in the form of Monster Energy, a company that’s greater in size and has a huge budget to spend.
b) Companies that have lower-cost products: Red Bull has been found to have a lower-cost product, although it is able to keep its prices high because of the high quality of its products.
c) Tougher Regulations: Countries are grappling with how to deal with the rising frequency of lifestyle diseases. Governments may opt to enact stricter rules in the future to target items with dangerous substances.
d) Growing Health-Consciousness: Red Bull, like most energy beverages, contains unhealthy components like caffeine, concentrates, flavors, and other additives. As a result, the brand is extremely exposed to the growing number of health-conscious consumers. Red Bull’s revenues and profitability may drop as more consumers choose healthier options like water, juice, and milk.
e) Looming Global Recession: In times of economic hardship, expensive luxury products are the first products to be cut from the tight budget. With the looming recession, Red Bull’s revenues and profitability are threatened since its products are expensive luxury products.
f) Increase in Imitations: Consumers all over the world are drinking energy beverages that taste and look exactly like Red Bull, mistaking them for the real thing. Red Bull’s profitability will be further endangered when more emerging economies acquire the technology to duplicate valuable products.
8. FAQS of Red Bull
a) How long does Red Bull give energy for?
Red Bull provides energy for up to 5 to 6 hours, whereas other energy drinks last much less
b) Can they drink Red Bull if they are pregnant?
Red Bull can be safely consumed by pregnant women
c) How much caffeine is in Red Bull?
Red Bull contains 45 milligrams of caffeine per 250ml
d) What happens after taking Red Bull?
The caffeine gives the drinker an energy buzz, but after a few hours the effects will begin to wear off. The drinker may become irritable or agitated.
e) Can Red Bull cause heart problems?
Red Bull does not contain any unsafe substance that can cause health problems, but there is no proof that it actually prevents heart attacks or lowers cholesterol levels
f) Can they drink Red Bull everyday?
Red Bull is a caffeinated product, and as such is not recommended for consumption on a daily basis
g) Is it healthy to drink Red Bull?
When consumed in moderation, Red Bull has no adverse side effects and is safe for consumption. It also satisfies the appetite and prevents dehydration. Overindulgence can cause dizziness and sleepiness
h) Does Red Bull affect women and men different?
No, Red Bull affects men and women of all ages the same.
i) Are Red Bulls Safe?
The Food and Drug Administration claims that Red Bull is safe for consumption since it has no unsafe substances that can cause health problems. However, it does not mean that Red Bull should be consumed everyday
j) Should you drink Red Bull before bed?
Drinking caffeinated drinks before bedtime can delay sleep onset and cause restless sleep.
k) Is Red Bull harmful?
No, there are no harmful effects of drinking moderate amounts of Red Bull. It is safe for consumption by both young and old people.
l) Can Red Bull prevent diseases?
No, Red Bull cannot prevent diseases or any other health issues.
m) When should I drink Red Bull?
Red Bull Energy Drink gives you wings whenever you need them – be it at work, during sports, while studying, playing a video game, when going out or visiting a festival, or on the road.
n) Can I drink Red Bull if I have heart problems?
It is not recommended that anyone with heart conditions consume caffeinated beverages since they can lead to arrhythmia or heart attacks.
o) Should they drink water instead of Red Bull?
Yes, drink water instead of energy drinks to maintain good health.
p) Why is Red Bull so expensive?
This is a very valuable thing, and therefore it is expensive. The energy given by a Red Bull is not going to be natural, as it is from the ingredients that are in the drink.
The Red Bull gives people energy, and therefore it is expensive, and people are willing to pay for it.
q) Is Red Bull natural?
Yes, it is 100% natural and totally safe for consumption.
r) Is Red Bull an alcohol?
No, Red Bull is not an alcohol. It contains no alcohol or other harmful substances which can cause health problems.
s) Is Red Bull good for them?
Yes, it is very good for your health because it gives you energy.
t) How does Red Bull work?
The ingredients in the drink give a person energy and a kick that they need to get through the day. This is why thousands of people all over the world take it before going to work each day. …
u) Is Red Bull good for studying?
Yes, Red Bull is good for studying since it helps the brain work better.
v) Can kids drink Red Bull?
Yes, kids can drink Red Bull. There are no adverse effects on kids if they consume the drink.
w) Why is Red Bull so famous?
Red Bull is famous because of the ingredients in the drink. The energy boost that Red Bull gives to people is special, and it makes people believe that the drink is the best there is.
- x) What are Red Bull’s Ingredients?
Caffeine, taurine, glucuronolactone, B-group vitamins, calcium carbonate, inositol, glucose
y) Why are some countries banning Red Bull?
Some countries have chosen to ban energy drinks due to health issues related to these products.