Sample Business Paper on The Red Bull GmbH Company

The Red Bull GmbH is a private company that had its roots in Austria in the year
1984 and was officially launched in 1987. It was founded by Dietrich Mateschitz who was a
world trade and commerce graduate from Vienna in partner with Chaleo. The founder was
inspired by a renowned brand, Krating Daeng, which was a popular energy drink. He fetched
ideas from this product and altered the ingredients to taste more of Western. The Red Bull
headquarter is in Austria in a village called Fuschl am See (Mahroum,2016). The brand spread
its operations worldwide, which made it an international brand. It established its branches in
Slovenia and Hungary in 1992, then in the UK and Germany in 1994. It further extended to the
United States in 1997 and by 2000, the brand was already in the Middle East. According to a
recent study, the company is now well established in more than 171 countries worldwide. Red
Bull energy drink comes in a can that has tall, bull and silver appearance with the company logo
well displayed on it.
The company’s main product is Red Bull which is a very popular energy drink
consumed around the world. It has the biggest market share in the energy drinks industry
worldwide given that it sells an average of 6.790 billion cans annually. The Red Bull is popular
for its high regard is on providing quality products to its customers. It has been in existence for
several decades and has been well recognized for its great efforts in serving the community and
at the same time conserving the environment. Aside from providing energy drinks, the company
is heavily involved and is well known in advertising sports brands. Its involvement in sports,
including the numerous programs, is to provide energy to its customers which is one of its goals.
The Red Bull company vision is to lead and be the most authoritative brand in the energy
drinks sector, with a focus on providing its customers with excellent customer service, while
ensuring efficiency and profitability. It aims at upholding its standards as a brand and to ensure


consistent relevance in the industry. The company makes vigorous efforts to ensure it remains
the leading energy drinks company globally while maintaining its major goal of making profits.
Red Bull is well aware that customer service is a very important element in any company that
seeks to thrive and therefore orients its operations to optimal customer satisfaction. This is by
ensuring that all of their customer’s complaints and concerns presented across all platforms
including social media are attended to.
The company values every aspect that forms part of their concern including culture,
people and ideas. It holds its employees with utmost regard ensuring that they are given efficient
support and that they are provided with the suitable working conditions. They are well
remunerated and bonuses are also available for the employees. The employees are provided with
opportunities for career advancement and a friendly working environment and culture. These
measures motivate employees and enhance loyalty to the management and the company. It
further embraces ideas and supports innovation and invention as it is focused on improving
efficiency and quality in production.
Red Bull GmbH has missions that propel the management and the employees to work
towards the success of the company. The company's mission statement is "Giving wings to
people and ideas" (Foret,2013). It utmost concern is to provide unique and distinguished
products and services to its clients. The energy drinks are produced under specified and strict
conditions and with maximum keenness to ensure that the optimal quality is achieved. The Red
Bull seeks to maintain its top standards and to remain a competitive brand at all cost. The
company is keen on participating in social programs. It is popular in sponsoring numerous
sporting events and teams worldwide, which is a great contribution to society as it enhances
talent among youths and also promotes the economy.


The Red Bull Company has a well-established marketing strategy that is a major
contribution to its overall success and has enabled to remain a competitive market. The company
is widely established across the world and has the largest market share in the beverage sector. It
boasts of a huge revenue of about 6.03 billion euro annually. The secret behind the company's
success is the superior marketing techniques that prevail and outdo its competitors. Red Bull's
branding campaign is excellent and its ability to attract new customers and maintain loyal
customers significantly exceeds other soft drinks brands. The company has established a wide
global market for its products, which are being consumed in many countries through numerous
marketing campaigns (Plan,2018)
The company embraces the modern marketing techniques that work well in creating
brand awareness to potential customers, and that enhances chances of growth, innovation and
adapt in the competitive beverage market. The company is good at targeting the appropriate
market audience and catching sufficient attention that leads to high conversion rates. The major
advertising campaigns by the Red Bull is the sponsorship of sporting events as well as teams
across the world, which have greatly contributed to its brand awareness (Kunz,2016). These
strategies have led to increased customers thus high sales revenue, which has led to significant
growth of the company.
Red Bull focuses on product differentiation by providing a superior soft drink. Red bull is
a first-class energy drink that is highly esteemed among soft drinks consumers due to its unique
flavours and taste. The products enhance mental and physical capabilities due to the unique
ingredients and differentiation. The company is also modified to suit the western taste through
carbonation and removal of sugar that attracts many customers from this part of the world. The
strategy has greatly boosted sales, which have led to the growth of the company (Bryce,2007)


The company has further adopted the acquisition of other firms as a growth strategy. The
company is investing in corporate companies and acquiring startups, for instance, Kaplan's
EdTech Accelerator and L’Oreal’s Women in Digital NEXT Generation (Odkins,2018). Red
Bull is slowly becoming a media company due to the increased number of media firms it has
been acquiring. This has strengthened the company's revenue base and has led to an extension of
its operations (Shengelia,2019)
Red blue company has diversified its business activities through notable participation in
the media. Apart from being an energy drinks producer, Red Bull is also a publishing company.
It creates numerous videos and releases them to their audience and also produces lifestyle and
sorting programs. The company has also launched a media house under its name in Europe and
the United States which generates additional revenue. It has put in place many projects that
involve media for instance through various platforms including TV and social media which
provides variety and original content for the consumers.
Red Bull Analysis
The analysis of Red Bull's comprises of an external business environment that affects the
running of its business activities and the tactics to deal with these factors. The PESTEL analysis
looks into various external factors, for instance, social, technological, political, legal, economic
as well as other economic factors. PESTEL analysis greatly contributes to understanding a
business and its market underlying forces.
Political Factors
Numerous political factors affect the Red Bull performance, for instance, government
stability, corruption in the market, limits on consumption of energy drinks and freedom in the


press. Political instability determines the performance of the Red Bull in the various countries it
operates in. A calm political environment favours the operations of the company as the company
can run with no major disruptions. This minimizes losses as there are no destructions and this
also boosts sales volumes hence increased revenue. A chaotic political environment, however,
interferes with the smooth running of business activities in the company hence reduced and
lagged business activities. This, in turn, affects the production of Red Bull and reduce the sales
volumes which may lead to losses. Widespread corruption in the beverage market adversely
affects the performance of the company. The government restricts the consumption level of
energy drinks due to health concerns (Hoflander,2013). This affects the sales volume of Red Bull
as less consumption translates into reduced sales as the consumers will not require much of the
The company has avoided regions or countries with political affliction to avoid cases of
disruption of its operations which may lead to losses. This has minimized the probability of the
company being affected by political instability.
Technological Factors
Technological factors that affect the performance of the Red Bull company includes the
level of Research and development and the internet. Research and development for beverage
products like Red Bull are quite crucial as it boosts the quality of the products. It helps in finding
out new and improved techniques of producing more quality energy drinks and also better ways
packaging products in a way that is more presentable and attractive to customers. This will help
to boost sales as customers are capture by the quality as well as the presentation of the products.


Internet is also a major component as Red Bull greatly relies on the internet to reach its
customers and also to extend to new customers through its established digital marketing
strategies. The marketing campaigns through promotions and content creation conducted online
and that has a global reach helps create brand awareness for the company worldwide hence a
wide reach which leads to increased sales. Advancement in information and technology,
therefore, boosts the performance of the company since the operations will be more effective and
the sales volume is greatly boosted due to a wide customer base.
Red Bull has made numerous efforts to strengthen its research and development and has
embraced innovation and invention. This has led to efficiency in production due to more
effective techniques and inventions that has boosted quality in production and delivery of the
energy drinks. The company has also adopted the latest technology that has enhanced and
fastened its operations.
Social Factors
The various social factors that affect the business performance of Red Bull comprises of
population lifestyle, social status, age and health consciousness of the people living in the society
in which the company operates. If the population comprises of people living luxurious lives, the
company will make more sales unlike in society which prefer simple lifestyles that do not
consider energy drinks as an important product. Areas comprising of rich people who can afford
energy drinks with ease will have a higher consumption rate of Red Bull hence it will make more
sales in those regions. If the people living in the region are average or poor and cannot easily
afford the product, the Red Bull is a very expensive product for them to buy hence the company


will make fewer sales. Age component in the region or country of operation affects the rate of
consumption of Red Bull.
Given that the drink is majorly consumed by young people aged between the age of 18-
34 years, a population that comprises a great percentage of youths favours the company in terms
of sales since the consumption level is high. However, a population that comprises of elderly
people reduces the company's sales volume since only a small percentage of this age group take
these energy drinks. Health consciousness affects the performance of the Red Bull in that a
population that is sceptical on consuming products that may affect their health may avoid the
energy drinks produced by the company. If the people in the country or region that are health
conscious, they consider Red Bull as an unhealthy product hence the consumption levels reduce
hence fewer sales by the company.
The company has established its branches in strategic positions that have populations
with majority consumers of Red Bull. It has targeted areas that comprise of youths as the bigger
part of the population. Most of its branches operate in areas with a rich population that can afford
its products.
Economic Factors
Economic factors that affect Red Bull include interest rates, inflation rate, economic
growth rate and availability of resources and raw materials in the country in which the company
operates. A high interest will negatively affect the company as it will have to pay back loans at a
high rate hence reduce the net income of the firm. It will also minimize the borrowing of loans to
avoid the high-interest rates, which may lead to limited expansion due to reduced capital and
further increase the prices of the Red Bull for its customers.


High inflation rate in the country will lead to the increased cost of raw materials which
will force the company to increase prices of the Red-Blue for the consumers hence reduced sales
as most of them will avoid the product. Also, a country that is experiencing slow growth rate will
lead to decreased sales for the company since the buying rate will below. Availability of raw
materials will affect the performance in that easy accessibility will smoothen the production of
Red Bull since the company will not experience shortages of the ingredients. This will ensure
that the company have sufficient energy drinks to supply to its customers hence satisfy their
needs. Availability of resources required in the production and distribution process will enhance
the business activities for the company hence increase productivity and boost sales.
The company has been keen to establish its branches in regions with sufficient resources
in the market which are required in the production process and has also supplied all the needs
utilized in the business activities. The company has further increased the prices of Red Bull to
meet the increased cost in production in countries that experience high inflation rates and interest
Legal Factors
Government laws and regulations adversely affect the performance of the Red Bull
company. The government requires that the company follow all food and regulation laws, where
some of the policies are too demanding and may slow down the activities and the performance of
the company. The company is obliged to strictly observe the safety criteria regarding side effects.
It is required to list all its ingredients to ensure that they are not of any risk to the consumers, and
to allow those that may be allergic to some of the ingredients to avoid the product. This reduces
the sales volume as some consumers may be sceptical to buying the Red Blue in the fear that it


may affect their health. The government may also restrict the company from extending its
operations in other countries which adversely affects its performance by limiting its expansion
opportunities and consequently lead to fewer consumers hence reduced sales.
The company has made efforts to list down all of the ingredients used to make the Red
Bull energy drink to ensure that customers who could be allergic to any of the ingredients may
be made aware to avoid health complications as a result of consumption of this product. This will
enhance the brand image of the company.
Environmental Factors
The environmental conversation requirements have greatly posed a challenge for the Red
Bull company. The company has suffered waste disposal problems, which is a major problem
that most companies face. Red Bull has severely suffered due to environmental issues, for
instance, the company was ranked among the top ten companies that were heavily fined for
recycling complications in 2009. This has led to damage to the brand image that ultimately
affected the company's performance.
The company has taken action regarding the problem by packaging the energy drinks in
cans made of aluminum which are 100% recyclable hence eliminating such problems associated
with environmental conversation.
Competitive Environment Analysis in the Energy Drink Market.
The analysis of the competitive environment by use of Porter's Five Forces explains the
competitive rivalry, threats of new entries into the market, the bargaining power of consumers
and suppliers and the threats by substitute products.


Competitive rivalry from other energy drinks brands. The energy drinks market has
numerous brands that provide the products. Three brands which are, Red Bull GmbH, Coca Cola
and Pepsi company dominate the market while the rest has a small share. The market is
competitive but quite concentrated, where only three companies compete at the global level
while the small ones operate at local levels only. Red bull is ahead of all of its competitors as it
dominates the energy drinks market. However, many competitors in the market make it face
competition rivalry.
Threats of new entries in the energy drinks market. The market is attractive due to the
fast growth of the energy drinks industry and best prices for the products. It also has numerous
domestic and global opportunities. However, some entry barriers exist that discourage new firms
from joining, for instance, heavy investment requirement, a high competition which means that a
firm would need to have an innovative idea to thrive in the market. Establishing a national or
global recognition is also a difficult task for new firms. This reduces the threat of new entrants
for Red Bull.

The threat of substitute products that may replace energy drinks. The market faces
competition from other products that are substitutes to energy drinks, which includes homemade
smoothies and coffee. These products are offered at relatively lower prices and can be easily
prepared at home, which is a big threat to energy drinks. The controversies that exist concerning
Red Bull could potentially make the customers go for substitutes. Despite the odds, the brand has
been able to thrive and outdo its substitutes.


The bargaining power of consumers in the energy drinks market. Red bull holds a
moderate bargaining buyer over its buyers. The brand is highly esteemed by customers, and
therefore, it won't lose much of its customers when it fairly increases the price of its product. The
consumers of Red Bull are mainly comprised of high-class people who do not consider price as a
major determinant in purchasing a product. The energy drink has caffeine as an ingredient which
is addictive hence customers consume more of the product.
Bargaining power of suppliers in the energy drinks market. The bargaining power of
suppliers over the Red Bull is low. This is because the company is a great brand that purchases
raw materials in bulk, which attracts many suppliers to sell raw materials. The company can
easily switch from one supplier to another at a less cost, which leaves no chance for any of them
to exploit Red Bull and their bargaining power is low.


Marketing Forces Affecting the Energy Drinks Industry
Demand and supply forces affect the energy industry. Energy drinks are in very high
demand, and its growth is expected to rapidly rise over the coming years. These products are
becoming popular among consumers due to their ability to provide instant energy and to
stimulate physically and mentally. The ingredients which comprise of caffeine with a stimulant
effect, and taurine which boosts skeletal development and cardiovascular activities, account for
the products high demand. A huge part of the young population is addicted to energy drinks,
which have boosted the sale of these products. The increased demand has led to increased prices
of energy drinks. Many firms are offering energy drinks which have increased their supply.
Governments are a major determinant as they are the monetary and fiscal policies
controllers. The government sets the interest rates in the country and makes the decisions
whether to raise or reduce them. They determine the economic growth rate and also control the
prices of energy drinks.



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