Red Bull

Red Bull is an Austria based company started by Dietrich Mateschitz. He developed

Socio cultural-
Opportunities:
The younger generation, due to their modern culture, often consume energy drinks
as they believe it helps them stay active. Socially, energy drink brands are
considered to be very trendy and cool and are socially accepted as they relate to the
image of sports. The opportunities are created by the hectic life of the youth in this
generation need energy drinks like Red Bull
With the increasing number of health-conscious consumers, Red Bull can invest
more in R&D (research and development) to offer healthy products. This will enable
the company to increase the demand for healthy beverages.
With years of experience in sports as a sponsor, Red Bull can expand into sports for
business purposes. For instance, it can focus on building Red Bull Racing into the
best in F1.
Red Bull doesn’t invest a lot of resources in marketing and advertising campaigns in
order to promote the company’s products, but the company sponsors, and hosts
events, and shows the public content that will most likely catch their attention. It’s to
show off the company’s power and influence.
Threats:
There are threats that are associated with energy drinks like Red Bull. In countries
and places where most of the target population is health conscious, the purchase of
such Red Bull decreases, which leads to lower sales. Strategies such as making
sugar-free versions of drinks like Red Bull have helped to market a healthier society.

Like most energy drinks, Red Bull consists of unhealthy ingredients, such as
caffeine, concentrates, flavours, and so on. This makes the brand highly vulnerable
to the increasing number of health-conscious consumers. As more consumers want
to start being healthier and move towards options like water, juice, and milk, Red
Bull’s revenues and profits can decline.

Technological factors -
Opportunities:
Research and development through technology can be seen as a big opportunity for
companies like Red Bull. The most important technological factor for such research
is the use of the Internet. Most of the sale of energy drinks like Red Bull comes
through advertising strategies and promotions on the internet. This is a very cheap
and efficient way for consumers to connect with the company more easily through
social media. There are ads on social media about stuntmen performing better after
drinking cans of Red Bull. There are also ads about how Red Bull is made and
packaged, this helps the company improve both customer loyalty and their sales.
Threats:
Across the world, many Red Bull consumers have started having energy drinks that
taste and are packaged very similar to Red Bull, thinking that they are consuming the
actual Red Bull drink. As more emerging economies gain the technologies to imitate
these types of valued products, Red Bull’s profits and sales will be threatened.

Economic factors -
Opportunities:
The US and Europe are Red Bull’s major markets but are saturated with numerous
brands competing for market share. Red Bull can focus on emerging markets in
Asia, Africa, and Latin America and benefit from growing middle-class, improved
economic situation, and unsaturation.
People believe that energy drinks such as Red Bull may be able to build strength
against the global pandemic, Covid 19, while others debate against this. Red Bull,
being widely available and in demand, opens up opportunities for consumers to test
out this theory, increasing sales and profits.
Threat:
Conditions in each country affect the production and sale of Red Bull. If inflation in
the country is high, the company will have high raw material costs, which can lead to
higher prices for customers' drinks. Another aspect could be a state-run interest rate,
as Red Bull's loan will be affected and the company will adjust its calculations
accordingly, resulting in lower sales. As Red Bull is a premium brand, all sorts of
global economic crises have a direct impact on energy drink sales. For example, the
global economic crisis of 2009 reduced sales by 1.5% year-on-year. Red Bull's
chances come from developed countries and are most likely to be seized when the
country faces an economic slowdown. The simple availability of resources and raw
materials in each country also impacts Red Bull's overall sales, as it raises the price
of drinks. Due to the occurrence of the pandemic, premium brands such as red bull
faced major losses as many could no longer afford their prices. As energy drinks are
not necessity goods, a lot of consumers reduced their purchases of Red Bull and
prioritised necessity goods instead. Also due to the lockdown, people could not step
out to stores to purchase red bull.
Apart from Monster, Red Bull is facing competition from small companies that target
niches with quality but cheaper energy drinks. If competition from these companies
increases drastically, Red Bull can lose its global dominance.
Red Bull’s products are usually consumed in gatherings like sports events and
parties. But, with everyone practicing social distancing and sports events being
constantly postponed, the opportunities to sell products are most shut down. Gyms,
physical athletes, and other workout centres are the main customer market of Red
Bull. The covid 19 pandemic has shut down all these outdoor activities. The
company’s sales declined a lot among these consumers.

Environmental factors -
Opportunities:
Red Bull has launched a spinal cord research centre by the name of the “Wing for
Life” foundation, and it addresses the potential injuries. The brand has been raising
money by organizing running race events and sending the profit money to the
foundation.
Red Bull has also recently launched a project by the name of “Wall to Wall” and its
goal is to decrease transportation fuel. For instance, the company produces the
energy drink at the near port and then ships it to the market, instead of bringing it
from the other country. It made a significant impact on the reduction of the carbon
emission rate.
Threat:
Red Bull faced a lot of issues related to environmental factors. A list of an
environmental agency which was released in 2009, listed Red Bull as one of the top
ten companies which were given the highest fines due to the recycling problems.
This eventually led to a negative impact on the brand image of the company which
was a threat because the company lost many loyal consumers, hence the sales and
profits decreased. To make up for the losses, Red Bull improved its recycling system
and used aluminium cans instead which are 100 percent recyclable.

Political factors -
Opportunities:
Governmental policies can ease the imports and exports of Red Bull, hence reducing
the charges and tax reforms and causing Red Bull to have lower expenses. These
deducted costs can then result in higher profits and increased consumer satisfaction
due to possible lower prices.
Threat:
Government Policies, since a company as big as Red Bull is operating in multiple
countries worldwide, some of these countries have banned the consumption of
energy drinks due to multiple health issues caused by them. The government makes
these policies and due to this awareness many countries are now considering
imposing restrictions on the consumption as well. Positive marketing and
sponsorship campaigns do not affect the government's decision to impose these
policies.

Legal factors -
Threats:
Many people have filed lawsuits against Red Bull over problems like false
advertisements and health issues. Due to this, the company lost around thirteen
million dollars. The energy drink didn’t give them ‘wings’ and boost their energy, and
they couldn’t prove the improved concentration span scientifically.
France had banned Red Bull in 2000 for a decade, and Norway and Denmark
banned in 2008 because the drink had too much caffeine, but these bans were lifted
later. Therefore, the company should be careful about the usage of various
ingredients.
These legal requirements can also restrict the company from expanding in other
countries, so it is a threat to the company.

Ethical factors -
Opportunities: Red Bull makes its cans from a very lightweight aluminium that are
completely recyclable. They encourage recycling by educating consumers about the
recycling loop, and teaching others how important it is to recycle cans to prevent
pollution, waste, and filling of landfills throughout the world.
Red Bull transports their drinks by trains and ships, and trucks are used, if other
options are not available. The cans are compact and are lightweight and do not take
up as much space as other products. So, the company has worked to create more
efficient transport than how glass bottles or other plastic bottles get transported. This
helps reduce carbon dioxide emission, reducing harmful effects on air quality.
When Red Bull designed its drinks, it made the cans so that it uses up less space in
coolers, so less energy is wasted on cooling the drink. This is how Red Bull is
creating a more environmentally and user-friendly product.

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