Red Bull: Competitive and Corporate Strategies
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ScribdTranslationsRed Bull
CRISTINA VÁZQUEZ PÉREZ DEL YERRO
JESUS MANUEL ROZA RAPOSO
JAVIER VIGO RODRÍGUEZ
JAVIER SEVILLANO IBÁÑEZ
DAVID RUBIO CANO
INDEX:
1. Historical Review.
2. Porter's competitive forces:
. Threat of substitute products.
. Threat of new competitors.
. Negotiating power with suppliers.
. Negotiation power with clients.
. Degree of rivalry in the sector.
3. Competitive strategy of the company.
4. Corporate strategy of the company.
1. HISTORICAL REVIEW.
What is 'Red Bull GMBH'?
Red Bull GMBH is an Austrian company, mainly known for
market the energy drink 'Red Bull'.
Where is the headquarters of that company located?
Fuschl am See, Austria.
1. HISTORICAL REVIEW.
Founders:
Dietrich Mateschitz (Austrian) Chaleo Yoovidhya (Thai)
1. HISTORICAL REVIEW.
In 1982, Mateschitz visited Thailand and discovered the energy drink Krating.
Daeng ("Red Bull").
Mateschitz and Chaleo founded "Red Bull Gmbh"
(1984-1987) adaptation of the product to European tastes.
1987: first sales of Red Bull in Austria.
2.1 PORTER'S COMPETITIVE FORCES - Threat of substitute products.
As a simple drink As an energy drink
This forces Red Bull to have a good quality/price ratio.
2.2 PORTER'S COMPETITIVE FORCES - Threat of new competitors.
What would be a potential competitor/threat?
There are more than 200 beverages.
Know how low energy drinks, only in the USA, and
+ that figure is rising due to
short production process the high margin of the sector
< threat (new and growing).
NEW ENERGY DRINK COMPANIES
+
ENERGY DRINKS WITHOUT GAS/BUBBLES
2.2 PORTER'S COMPETITIVE FORCES - Threat of new competitors.
Customer loyalty
Barriers of Great capital investment
entry to enter the sector
Advantage in
costs
Economies of scale
2.3 PORTER'S COMPETITIVE FORCES - Bargaining power of suppliers.
HIGH NEGOTIATING POWER UNDER NEGOTIATION POWER
The provider of The other components are
glucuronolactone they buy from several suppliers
GlaxoSmithKline Company. small.
Red Bull buys all its inputs There are many channels and
from glucuronolactone to this substitute suppliers.
company, for this reason it has a high Red Bull can go from a
bargaining power. provider to another cheaper one and
flexible por lo que estos no
they have just to put of
negotiation.
2.4 PORTER'S COMPETITIVE FORCES - Bargaining power of customers.
2.4 PORTER'S COMPETITIVE FORCES – Bargaining power of customers.
HIGH NEGOTIATING POWER UNDER NEGOTIATING POWER
Wholesale and retail customers. Customers or end consumers.
Repeated purchase, of great They have the power of decision,
volume and being able to choose among but not the negotiation one.
different brands.
Therefore, the bargaining power
it is high but varies depending on the
volume of purchases.
2.5 PORTER'S COMPETITIVE FORCES - Degree of rivalry in the sector.
It is a sector where the leading brand is well positioned and the
other competitors are well-known brands that have fallen
the barriers to entry are growing.
It is difficult for new competitors to emerge.
Growing sector with very differentiated competitors.
Favorable situation for all participants.
2.5 PORTER'S FIVE FORCES - Degree of sector rivalry.
Cu...
Red Bull is a leader in the
market and the rest of the
companies fight for it
second place.
They are also pioneers in
this industry and it is anticipated
R
e
may they continue to grow.
3. COMPETITIVE STRATEGY OF THE COMPANY.
The company Red Bull clearly follows the STRATEGY OF DIFFERENTIATION.
consumers detect that there are products in the market that are substitutes for this one.
Directly (other energy drinks like Monster).
Indirectly (alcoholic beverages, soft drinks, and water).
Despite appreciating other substitute goods for Red Bull, consumers prefer
spend a little more money to acquire this product.
3. COMPETITIVE STRATEGY OF THE COMPANY.
Red Bull is an easy product to plagiarize, as the ingredients are printed on
each and every can.
That is why since 1990 substitute goods have emerged for this, without
Red Bull remains the leading company in the sector in sales.
Where does Red Bull's success lie?
sales with so many products existing
substitutes at a lower price?
Apparent differentiation
3. COMPANY COMPETITIVE STRATEGY.
The formula for Red Bull's success lies in its marketing and advertising campaigns.
A) Symbolism and slogan: bulls are a symbol of strength and energy. The sun is due to
Asian origin of the drink. The famous slogan 'Red Bull gives you wings' is inspired by the
Japanese aviators who consumed a drink similar as a stimulant.
3. COMPANY COMPETITIVE STRATEGY.
B) Marketing of 'extreme emotions': the energy force of the product is seen
reflected in risk athletes who seek danger and adrenaline.
3. COMPETITIVE STRATEGY OF THE COMPANY.
C) Sports sponsorship:
Red Bull owns football and Formula 1 teams among other sports.
. Football teams: in NY, Salzburg, Leipzig, Sao Paulo and Ghana.
. Formula 1 teams: Red Bull Racing and Toro Rosso.
Sponsors the best athletes in their various disciplines. This is the case of
Sebastian Vettel, Marc Márquez, Gisela Pulido, Travis Pastrana or Aksel Lund
Svindal.
3. COMPETITIVE STRATEGY OF THE COMPANY.
C) Sports sponsorship: in the motor world.
Sebastian Vettel Marc Márquez Alex Márquez
3. COMPANY COMPETITIVE STRATEGY.
D) Sports events: Red Bull names the best sports events at the level
worldwide.
3. COMPETITIVE STRATEGY OF THE COMPANY.
E) Youth Promotion: Red Bull advertises in student environments (institutes,
universities…) to promote the consumption of their products.
Sometimes it does so by enhancing the sales promotion related to the Marketing Mix.
(sample gifts, promotional cars...)
4. CORPORATE STRATEGY OF THE COMPANY.
Related diversification
The beginning of the production and sale of Red Bull cola
it started in 2008.
Currently, its sale is present in 21 countries.
everyone.
It has been banned in northern European states.
(Germany, Norway, and Denmark). In Spain there is
within the offer of energy drinks.
4. CORPORATE STRATEGY OF THE COMPANY.
Related diversification
Herbal drink
Seize the day Three flavors
Distribution in Europe
Wine and soda
Sabai Spritzer
Tesco
4. CORPORATE STRATEGY OF THE COMPANY.
Unrelated diversification: MUSIC
Red Bull Records
independent record label
It was launched in 2007
It is based on the recording of small indie bands for free.
Red Bull Studios
Red Bull Music Academy
Series of workshops and music festivals founded in 1998.
The main five-week event takes place in a city
different each year.
The public part of their program is a concert festival.
The other part of the program is by invitation only, in a building that has been
equipped by order with a large recording studio, a room of
conferences, a radio booth, and between eight to twelve studios.
4. CORPORATE STRATEGY OF THE COMPANY.
Unrelated diversification: SPORT
Red Bull's efforts include sponsoring sports events.
extreme sports, such as skiing, BMX, scuba diving, etc.
It stands out especially for its sponsorship in the world of motorsport.
Owner of several football teams such as Red Bull Salzburg and New
York Red Bulls.
INFINITI RED BULL RACING
Austrian Formula 1 team, owned by the Red Bull company.
Acquired the Jaguar Racing team for about 110 million dollars,
when Ford Motor Company announced its withdrawal from the top category of
automotive sports.
Red Bull Racing is a team with an Austrian license but based in Milton.
Keynes.
RED BULL STRATOS
Base jump performed by Felix Baumgartner, ascending to more than
36,500 m in a hot air balloon and jump in free fall.
4. CORPORATE STRATEGY OF THE COMPANY.
Internationalization
The energy drink has expanded the empire to greater heights.
industries, such as entertainment, sports, and some
extreme sports.
The presence of this brand is noticeable at events.
internacionales propios como el Red Bull Air Race, Red Bull X-
Fighters and Red Bull Skateboard.
The company owns the football teams Red Bull New
York of the Major League Soccer in the United States, the Austrian
Red Bull Salzburg in the Bundesliga...
Red Bull actively competes in Formula 1, with two
own teams, Red Bull Racing and Scuderia Toro Rosso;
also has had a team in the NASCAR Cup since
2006 to 2011.
The brand has also provided personal sponsorship to several.
athletes who have had great moments
within extreme sports.
4. CORPORATE STRATEGY OF THE COMPANY.
Growth methods
Advertising
Internal growth Investment
New products
4. CORPORATE STRATEGY OF THE COMPANY.
Growth methods
Participation (e.g.: Sauber F1 Team)
External growth
Acquisition (e.g.: football teams, hockey, NASCAR...)
4. CORPORATE STRATEGY OF THE COMPANY.
Cooperation agreements
Spain Osborne
Agreements of Nightclubs and bars
distribution
Stores and retailers
Red Bull