Complete SWOT Analysis of Red Bull – The World’s Leading Energy Drink

Red Bull has risen to the top of the market as a result of its ability to endure competitive pressure, so let’s take a deep dive into the SWOT Analysis of Red Bull to learn more. 

SWOT Analysis of Red Bull

1. Strengths of Red Bull

Strengths are an organization’s distinct skills that offer it a competitive edge in gaining greater market share, attracting more customers, and maximizing profitability. Red Bull, being one of the leading firms in its field, possesses various strengths that enable it to prosper in the market. Red Bull’s strengths are listed below:

• Icon of Youth – Red Bull has established a youthful brand and efficiently uses all platforms to attract youngsters worldwide.
• Extensive Global Reach – Red Bull works in a variety of markets across the world, including North America, Europe, Africa, Asia, and Australia. Having a global presence improves stability and fosters long-term growth
• Supremacy in the Marketplace – Red Bull leads the energy drink business in the United States and is the global top. Red Bull has the greatest global market share, with 7.5 billion cans sold in 2019. Dominant firms have an unfair edge over competitors.
• Effective Marketing Strategies – Red Bull’s marketing strategy is strong, utilizing social media and sports. Red Bull Racing is the third-best Formula One team and supports hundreds of sportsmen and teams in various sports.
• Sales are Soaring – Red Bull’s sales soared by 37% in India, 30% in Brazil, 25% in Africa, 15% in Germany, 12% in Austria, 12% in Eastern Europe, and 9% in the United States in 2019. Growth in demand leads to an increase in revenues and profits.
• Strong reputed Brand Image in the market – Red Bull has been constant in its positioning from its inception, with the snappy and memorable phrase “Gives You Wings.” Over time, the corporation has developed a powerful brand worth $9.9 billion, ranking #71 on the list of the most valuable brands in 2019.
• Portfolio Diversity – While energy drinks account for the majority of Red Bull’s earnings, the company also has interests in automobile racing, air racing, auto manufacturing, and assembly, as well as the arts.
• Supply Chain Efficiency – It has established a highly efficient supply chain of trusted suppliers and diligent distributors. This has eliminated bottlenecks and guaranteed that raw materials are constantly accessible and that products are adequately supplied in retail locations worldwide.

2. Weaknesses of Red Bull

Weaknesses are elements of a company or brand that need to be improved, despite the above-mentioned strengths. Red Bull’s shortcomings are places where it can improve utilizing SWOT analysis to increase its competitive advantage and strategic posture. The following are Red Bull’s significant flaws:

• Providing Unhealthy Drinks – Customers are becoming more health-conscious and avoiding sugary and unhealthy foods. Regrettably, Red Bull remains reluctant to change and continues to rely on unhealthy energy drinks.
• Trademark Enforcement Difficulties – Red Bull’s formula is tough to defend because the firm did not create the ingredients. Any manufacturer may produce a product that is nearly identical to Red Bull but has a small change in flavor and get away with it.
• Quite Pricey – Products branded and advertised as premium with excessively high price tags struggle to attract the middle and lower classes. Furthermore, it exposes the company to the threat of losing consumers and market share to new competitors with lower-cost products.
• Variety is limited – Consumers want alternatives, regardless of the things available on the market. There are several goods that Red Bull could sell, such as iced tea, fruit beverages, snacks, and sweets, but the firm insists on selling only two such as – sugar-rich energy drinks and sugar-free energy drinks.

4. Opportunities for Red Bull

Opportunities are possible areas of emphasis for a firm to focus on to enhance outcomes, boost sales, and, eventually, profit. Despite the weaknesses mentioned above, Red Bull has a lot of opportunities for growth and development:

• Provide Healthier Alternatives – With a growing number of health-conscious consumers, Red Bull could invest more in R&D to achieve and provide healthier products. As a result, the firm will be able to capitalize on the growing demand for healthier alternatives for food and drinks.
• Expansion of Product Range – Red Bull could expand its product ranges to provide greater diversity, and new tastes, and to target a broader market group.
• Emphasis on Markets Emerging – Red Bull’s key markets are the United States and Europe, yet both are crowded with multiple brands fighting for market share. Red Bull may target emerging markets in Asia, Africa, and Latin America, where the middle class is growing, the economy is getting better, and the market is overlooked.
• Participate in Sports to the Fullest – Red Bull could grow into sports for business goals because of its years of expertise as a sponsor. For example, it could concentrate on making Red Bull Racing the top team in Formula One.

4. Threats to Red Bull

Threats are environmental elements that might harm a company’s success. Red Bull’s success has brought with it a variety of threats. Red Bull’s threats include the following:

• Health-Consciousness is Increasing – Red Bull, like many energy beverages, contains unhealthy components such as caffeine, concentrates, and flavors. As a result, the brand is extremely exposed to a growing number of health-conscious customers. Red Bull’s revenues and profitability may fall as more customers choose healthier alternatives like water, juice, and milk.
• Costs are increasing – The ever-increasing operating expenses undermine profits, from rising raw material costs to excessive marketing charges.
• Replication of products has increased – Consumers all across the globe are drinking energy beverages that taste and look just like Red Bull, mistaking them for the real thing. Red Bull’s profitability will be threatened even further when more emerging economies gain the technology to imitate valuable items.
• Competition is intense – Aside from Monster, Red Bull faces intense competition from small businesses that provide high-quality but low-cost energy beverages to specialized markets. Red Bull’s worldwide dominance may be threatened if competition from these firms grows significantly.
• Pandemic worldwide – The beverages of Red Bull are enjoyed during social occasions such as sporting events and parties. With the whole society exercising social distancing and sporting events being delayed till further notice, the opportunity to promote products is almost not possible.
• Stricter regulations – Countries are concerned with how to control the rise of lifestyle illnesses. Governments may decide in the future to impose stricter rules on items containing harmful substances.
• Global Economic Crisis is on the Loom – Costly luxury items are the first to be removed from a limited budget during times of economic crisis. With the approaching recession, Red Bull’s revenues and profits are at risk because its goods are high-priced luxury items. 

Failed campaign or Backlash from the Audience

What was the issue?

In 2014, Red Bull had been ordered to change its iconic “Red Bull gives you wings” strapline, after a US court ruled it was ‘misleading advertising’.

What did the brand do in this situation?

Red Bull declined to comment on the potential impact of the lawsuit on the company’s UK marketing strategy and strapline. It’s worth noting that if the number of claims exceeds 1.3 million, the $13 million settlement will be divided among the claimants, resulting in a lower payout per person.

Did they take down the campaign or change it as a whole?

For more than a decade, Red Bull has consistently used their famous slogan “Red Bull gives you wings in their marketing campaigns.

Top Competitors of Red Bull

• Pepsi is a carbonated drink manufactured by Pepsi Co. Earlier it was recognized by Pepsi Cola but later renamed Pepsi.
• Monster Energy is an energy drink company rival of Red Bull.
• The Coca-Cola Company is an American multinational company, known for its Coca-Cola beverage. It is also one of the most sold beverages among others.
• Starbucks is also an American multinational company, known for its coffee. Since coffee contains high caffeine and thus gives energy, it also gives competition to Red Bull.
• Burn is an energy drink owned and distributed by Monster Beverage Corporation. It is being distributed in more than 80 countries.