Red Bull Company is an Austrian company headquartered in Fuschl am See that is known internationally for its Red Bull Energy Drink as well as the company involvement in various sports and sports teams. The organization operates in 171 countries as of 2016, and its products are popular amongst the young people who require regular refreshments. Red Bull Company became known and popular through its controversial marketing strategy in which it distributed free cases in colleges which significantly increased the organization sales. Today, the organization targets the young people through sports sponsorship and entertainment. The Red Bull company has since diversified its products investing in health-oriented products such as the sugar-free and zero calories varieties (Red Bull Energy Drink. n.d.). This paper will assess Red Bull Company strategic planning and measures that the organization has established to attain market leadership.
External Environment Analysis
Red Bull trademark has dominated the non-alcoholic beverages brands for many decades since its inception in the 1980s. Red Bull is an energy drink that is used by young people mostly due to its ability to boost their energy, and it is amongst the luxury drinks. Red Bull operates in an environment that is dominated by competitors such as Monster Energy drinks and also operates under the jurisdiction of many governments. This external environment analysis seeks to assess Red Bull operating external environment using the Pestle analysis which assesses the political, economic, social, technological, legal and environmental factors. Assessment of the external environment is important for Red Bull Company because it helps in informing the organization decisions based on the operating environment.
The environmental factors refer to the related environmental expectations based on legislation that are aimed at promoting environmental sustainability. Today, environmental factors focus on improving business sustainability since issues of pollution has been blamed for environmental deterioration which reduces business sustainability. Climate change is a significant issue to consider as an environmental factor today because it poses a threat to businesses that operate in international markets like Red Bull. In line with the environmental sustainability needs, Red Bull has invested in producing recyclable cans for its products and also the cans have in the recent past undergone significant modification to make them light and consume less raw materials which promote environmental sustainability. Besides, Red Bull has taken innovative to use more environmentally friendly transportation measures in which the Red Bull Energy drinks are transported by using ships and trains which highly reduces carbon emissions and trucks are used only when necessary. The organization has also invested in eco-friendly coolers which use minimum energy compared to the mainstream coolers (Red Bull Energy Drink. n.d.).
Legal requirements are necessary to ensure successful operations by ensuring that an organization is observant to the legal requirements regarding quality. Red Bull Company has established quality control department that ensures that its products are safe for human consumption and also ensures according to the regulations that the ingredients used in making the products are identified in the cans for consumer awareness. Compliance with legal requirements in the making and distribution of its products ensures that Red Bull Company can continue its operations without lawsuits that negatively affects an organization reputation (Red Bull Energy Drink. n.d.).
Research and development in the beverages industry have intensified with many competing companies such as Monster Energy, Shark Energy, and Lucozade investing in research to improve their products and create new products. However, more importantly, is the development of communication and management techniques which has increased management and production efficiency of international companies such as Red Bull. Red Bull Company has invested in production and communication technology which has led to the automation of the organization processes. Automation increases efficiency and reduces production cost which plays a significant role in determining the product cost. Red Bull should be technology savvy in the future to ensure that the organization retains market leadership in the energy drinks industry (Naude, 2012).
The social environment has become more integrated due to globalization and the advent of technology that has reduced the world into a global village where information access is easier than before. The modern urban culture has made energy drinks a necessity which has led to the increase of Red Bull total market. However, the advent of social media is posing a significant challenge for Red Bull and other organizations as information today can easily be spread. In this case, Red Bull Company should be social media aware and create its presence in social media which can help the organization to respond to the current issues being raised regarding its products as well as ensuring that it uses social media to promote its products (Naude, 2012).
Red Bull Company has invested in product innovation which has helped the organization to stay on top in the market despite the high competition. The performance of any organization is tied to the economic policies around the world for the international operating organizations or the economic stability of the state where the company operates. Globalization has played a significant role in the economic success of businesses by increasing market access across the world. Globalization has increased international market access which is behind the growing sales for organizations such as the Red Bull Company. Transportation technology has reduced the cost of transportation while the success of economies makes it possible for the businesses to sell goods and services by ensuring that the consumers have the necessary buying power.
Political factors are caused by the governments in the business external operating environment. Government policies and intergovernmental agreements such as free trade blocks play a significant role in increasing business access to markets. Government regulations play a significant role in directing the direction of business in an economy. Trade wars between countries that were initiated by the United States of American play a significant challenge to business as it increases the cost of doing business as well as uncertainty (McKibbin and Stoeckel, 2017). Red Bull Company should target emerging markets in Africa and Asia to introduce its brands which can increase the business international presence.
Competition is a significant measure that business organizations can use to assess the external environment. Competitors are beyond the control of businesses, and it is important for Red Bull Company to understand its competitors and their strategies which can help the organization to remain competitive. Monster Energy, Lucozade, and Shark energy are the major direct competitors in the energy drinks segment. Monster Energy has significantly invested in innovation which has paid off, and the organization is starting to gain market traction (Masek, Reagan, Dyn, and Nguyen, 2016). Lucozade continues to be a preferred brand by many due to its ability to cater for both energy and hydration needs of the consumers. As a carbonated glucose drink is fast and efficient in providing energy to both the brain and the body and has a significant market share. Lastly, Shark energy drink is also another significant competitor to Red Bull Company products and has recently re-strategized its market approach which aims at increasing the organization market presence through value pricing and the use of more natural ingredients that are attracting more consumers who aim at consuming naturally made products without chemical additives.
The Production of a Strategy Plan for "Red Bull Energy Drink Co"
The Red Bull Energy Company came to existence in 1984. Its primary was launched to the market was Australia in 1987. The company later expanded its market to foreign countries starting with Singapore in 1989 followed by Hungary in 1992 (Azimont, F., and Araujo, L., 2007. The company's focuses on maintaining the quality brand it already prides in, making a difference from other products in the market to outdo competition from similar companies dealing in the same products and services at reduced prices. It began with one product and later expanded its variety by producing other slightly modifies products. The company came up with the Red Bull Simply Cola in 2008 marking its first cola brand ever. The new product secured a right proportion of the market more than any other cola product due to use of 100% natural products to manufacture it (Curley, Nausha, Slocum, and Lombardi, 2017). The following year this company came up with the Red Bull Energy Shots, yet another new product. Its headquarters is located in Australia. The annual consumption of red bull products is approximately 4 million cans while the products are accessible to 160 countries across the globe. It is currently refreshing and energizing millions of people across hundreds of countries around the world.
Marketing Pillars Used by Red Bull
- Consumer Categories
- To increase interest made from market targeting males aged 35 and females aged 65 years.
- To increase revenue growth
- To make Red Bull the alternative drink to replace coffee.
Red Bull is the primary product of this company and is a lightly carbonated drink which stimulates the mental and physical activities of the users' body. The standard consumption limit for this product is approximately eight pounces which are part of the content of 8.3 ounces can (Curley, Nausha, Slocum, and Lombardi, 2017). The content of this can is caffeine (80 grams), calories (110 calories) and sugar (27 grams). The types of sugar contained in a red bull bottle are ordinary table sugar, simple sugars which is the healthy and natural body sugar and blood sugar. The role of caffeine in the drink is for activation of the drinker, accelerating the speed of doing things, improving the rate of reaction, concentration and promotion of alertness. Other ingredients included in the red bull are glucuronolactone, B vitamins, taurine and amino acids. Taurine, amino acid by itself and plays the role of antioxidant. , on the other hand, accelerates the process of destroying harmful substances from the body which cause a threat to the health of the body. Some types of foods which contain taurine products include fish, poultry, and scallops. Glucuronolactone detoxifies the body and is listed in foods such as red wine and grains. The B vitamins increase body metabolism and energize the body. All these ingredients of the Red Bull make it a desirable and quality product for its consumers and encourage more purchasing. Quality and uniqueness in natural ingredients which make the product make it a strategic marketing tool for increasing sales.
Red Bull is a crucial step for remaining concentrated and always attractive. What kills concentration is having a negative attitude about work rather than the action by itself. Disorganization, laziness and constant complaining among workers is a threat to any company. Let Red Bull be of assistance and bring productivity home.
Red Bull enjoys market leadership in the countries it has already established roots....
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