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

Updated on: Nov 20, 2022
SWOT Analysis of Red Bull - Featured Image

Earlier we delved into the SWOT Analysis of HCL Infosystem, one of the global market leaders in the IT industry. In this case study, we will evaluate the SWOT Analysis of Red Bull.

Red Bull is an Austrian company that curates energy drinks. Top athletes, students, and those in high-demand professions, as well as people who drive long distances, love Red Bull Energy Drink.

With their market position, Red Bull’s marketing efforts have paid off. Marketing improves over time in response to changing societal preferences. Attend our Free MasterClass on Digital Marketing, taught by IIDE’s Founder and CEO, Karan Shah, if you want to stay current with today’s effective marketing. 

Let’s start with Red Bull’s history, founding, finances, services, and market competitors in this SWOT Analysis.

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About Red Bull 

Red Bull is a success story that originated in Europe. They established a powerful brand reputation through the use of a vibrant logo with two opposing bulls and a unique tag line, ‘Red Bull gives you wings.’ It has associated itself with extreme sports, new music, and art, all targeted primarily at the younger crowd, through creative marketing and sponsorship.

It was met with criticism from the Food and Drug Administration (FDA), which refused to approve it for sales, yet despite this, it became a success through clubbing and snowboarding people. Even when it was allowed to be sold, this anti-establishment posture garnered support among customers. It rapidly expanded to neighbouring nations and the American market. 

The product was marketed at trendy clubs and bars, and the credibility of individuals regarded highly by the younger target group, such as Dj, was used. Red Bull’s self-proclaimed distributors used their local knowledge to help promote the brand and its goods. By 2020, Red Bull sold more than 7.9 billion cans across the world in over 171 countries. To date, the firm has been extremely successful, with a significant year-on-year increase in both sales growth and corporate value.

Quick Stats on Red Bull
Founder Dietrich Mateschitz, Chaleo Yoovidhya
Year Founded 1984
Origin Fuschl am See, Austria
No. of Employees 12,618
Company Type Private
Market Cap N/A
Annual Revenue $6.6 billion (2020)
Net Profit $971 Million (2020)

 

Products of Red Bull

Following are the products Red Bull sells – 

  • Energy Drinks
  • Red Bull Cola
  • Energy Shot
  • Sugar-Free Drinks

 

Competitors of Red Bull

The top opponents of Red Bull are as follows – 

  • Coca-Cola
  • Monster Beverage
  • PepsiCo 
  • Canard Street

 

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

 

Infographics - SWOT Analysis of Red Bull | IIDE

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 maximising 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 from all over the world.
  • 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, utilising 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 needs to be improved. Despite the above-mentioned strengths. Red Bull’s shortcomings are places where it can improve utilising 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 flavour 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 capitalise 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, 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.

 

Product - SWOT Analysis of Red Bull | IIDE

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 flavours. 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 going up – 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 risked because its goods are high-priced luxury items. 

 

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Conclusion

 

Red Bull is the world’s leading energy drink brand right now, thanks to its distinct, well-established brand and large market share. However, the brand’s sales of energy drinks are heavily reliant on them, and it doesn’t have much else to offer. As a result, Red Bull must keep an eye out for stale goods, health crackdowns, and competition. It can do this by offering new products, particularly those that are health-conscious. 

Furthermore, to maximize profitability, Red Bull should focus on sales and make a cost reduction. The large advantage it now has will allow it to do so without introducing major changes to the manufacturing process or starting on a costly marketing plan. 

Considering the rising competition in a competitive field like Food and Beverages, firms have to compete for their customers through improved marketing efforts. Preparing for the required Digital Marketing abilities and completing Certified Courses may lead to job chances with major tech organisations such as Red Bull. 

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If you enjoyed this in-depth company analysis, visit our IIDE Knowledge area for more case studies like this. 

Thank you for spending the time to read this Accenture SWOT Analysis. Please share your thoughts on the case study in the comments section below.

 

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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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