Swot Analysis Red Bull

Red Bull: The Michael Porter’s Five Forces

Strategy and Corporate Sustainability

(SM80.1710)

BY

Miss Anupama Bastola (ST119822)

Miss Benchawan Saengwato (ST119587)

Submitted to

Professor Winai Wongsurawat, PhD

Asian Institute of Technology

School of Management

Thailand

November 21, 2017Porter’s Five Forces of The Red Bull

Red Bull ‘gives you wing’ has become a catchy phrase and is preferred by many customers as it has proved to be one of the most demanded energy drink today. This energy drink was first established and sold in Thailand for drivers to avoid their sleep which was then named

Krating Daeng. It later after combining with the international company changed its name into

Red Bull. Red Bull was established in 1987 in Austria by Dietrich

They also sponsor many events all over the world which make the new entrants difficult to enter the market because they will not be able to spend that huge amount in advertisement. Therefore they have medium threat from the new entrants.

2. Bargaining power of the buyer- The target market of Red Bull is athletics, players, student and youngsters. They even have drinks for other market segment as well regarding their age group because different age group people have different taste and their demand and needs vary from each other. The customers are loyal to the product this illustrates that Red Bull is able to beat most of its competitors (The reason for its successful loyal customer is that it is easily available in many places like convenient store, drug store, super-market and clubs). As they are providing good quality productthey are not compromising in price. They have differentiated their product with new innovative ideas that’s why they have premium pricing strategy in compare to their competitor brand. Therefore, as they have loyal customer it is hard for their customer to bargain so they have low bargaining power of the

There are many other soft drinks like coca cola, Pepsi, etc. which is giving customer their product in low price to gain the mass market. All of these strategies have small effect on

Red Bull. However, it is gaining more revenue compared to its competitor. It has competitive advantage from its competitor because of its international marketing strategy

(publicity/endorsements). Therefore, it has medium threat from the existing rival/competitors. 4. Threat of substitute- There are many substitutes of Red Bull such as Coca-Cola, coffee, tea, energy shots etc. The main substitute of Red Bull right now is emerging energy shots.

The 5-hour energy shot is giving the same kind of energy with in small shots so you don’t need to drink 8-24 ounces of beverages. These shots were not being able to grow because it has problems regarding health concerns and even deaths were associated with its use.

They are not being able to match up with Red Bull because there are many issues like calories, convenience etc. Red Bull has high price which associates it to be of high standard and all the substitutes of Red Bull has low price which doesn’t affect Red