Click here to load reader
Upload
robert-wensley
View
12.549
Download
102
Tags:
Embed Size (px)
DESCRIPTION
Red Bull Blue Ocean StrategyPresentation explores Red Bull's strategic management and marketing tactics. Presentation by Robert Wensley, Brett Lashley, Joanna Alencastro, Peter JendrolovicsHarvard University, Summer 2011
Citation preview
Presentation by: Robert Wensley, Brett Lashley, Joanna Alencastro, Peter Jendrolovics
RED BULLHARVARD SUMMER SCHOOL: STRATEGIC MANAGEMENT
INDUSTRY ANALYSIS
SOFT DRINK
SWOT - STRENGTHS
• Nature of market• Diverse market - health, energy and concentrated drinks• Low ingredient and manufacturing costs • High profit margins• Economies of scale
SWOT - WEAKNESSES
•Health concerns•Brand loyalties•Retailers – generic brands
SWOT - OPPORTUNITIES
• Space for innovative products• International market potential•Potential for diet, healthier, or flavored beverage versions•Environmental marketing
SWOT - THREATS
•Threat from cheaper retailer owned brands•PepsiCo and Coca-Cola dominate the market•Large brands’ advertising and marketing budgets•Marketing regulations•Rising obesity levels
MARKET TRENDS
SOFTDRINKS
Health conscious market High barriers to entry Growth of premium market
segment
RED BULL ENERGY DRINK
• Founded 1984 - sales started in 1987
• Founder(s): Dietrich Mateschitz
(Austrian),
Chaleo Yoovidhya (Thai)
• Privately owned
• Headquarters: Fuschi am See, Austria
• Revenue €3.78 billion (2010)
• Net income €650 million (2006)
• Employees 7,758 (2010)
A new industry of functional beverages:
BRAND IMAGE AND VALUE
Euro brands rank and brand valueConstantly innovating – expanding and looking for new opportunitiesAggressively marketing the slogan “Red Bull gives you wings” through advertisement
WORLD WIDE EXPANSION
Red bull is currently available in 162 countries; 4.2 billion cans were consumed in 2010
Red Bull Air Race World Series
Red Bull X-Fighters World Tour
Red Bull Crashed Ice
Red Bull Cliff Diving World Series
STRATEGY DIAMOND
.
Staging
Differentiators
Economic logic
Vehicles
Arenas
Staging: Present on all of the continents(expanded to 162 countries)
Arenas: created new arena-”energy-drink” market
Vehicles :Start from scratch and achieve most of the growth internally
Differentiators: more than a product Image+ life-style
Economic logic:Premium prices due to unmatchable brand characteristics and image
VRINE MODEL
Valuable
Rare
Inimitable and non- substitutable
Exploitable
Red Bull’s capabilities allow the firm to meet the market’s demand
The unique brand image and ”legend” around the product
Lots of competitors that have not been able to follow Red Bull’s success
Totally exploitable, the whole marketing campaign based on it
DOING THINGS DIFFERENTLY
.
Communication strategy
New category: energy drink
market
Packaging
Pricing
strategy
Distribution strategy
BLUE OCEAN STRATEGY OVERVIEW•Simultaneous pursuit of differentiation & low cost•Aims to create new market space, thereby making competition irrelevant•Systematic and reproducible methodologies and processes by both new and existing firms•Various visual frameworks and tools build collective wisdom and allow for effective strategy execution through easy communication•Covers both strategy formulation and execution•3 key building blocks: value innovation, tipping point leadership, fair process•Strategy shapes structure•Requires organizations to develop and align the 3 strategy propositions: value, profit, people
BLUE OCEAN STRATEGYRed Ocean Strategy
Virgin ColaBlue Ocean Strategy
Red Bull
Competed vs. Coke and Pepsi with traditional cola offering
Niche product: carbonated “energy drink” beverage
Waged “war”: Richard Branson in a tank; heavy advertising,
competition for retail shelf space
Virtually uncontested energy drink market
Just another cola Built a loyal following among young adults and party-goers
despite questionable taste
Priced 15-20% lower than the competition
Able to charge a premium w/ new product then lowered prices
to retain value
Competing with low cost strategic position
Competing with differentiation and brand value
BLUE OCEAN: PIONEER MAP
A BRAND LIKE NO OTHER
• Brand connections on different marketing platforms
• Brand identity built on extreme sports arena: • Red Bull Air Race World Championships, Red
Bull X-Fighters, Taurus World Stunt Awards and Red Bull Cliff Diving World Series
• Mainstream sports arenas • NASCAR• Formula 1 • partnerships with NFL and NBA players
MARKETING STRATEGY
• "On-premise is where we believe brands get built.” –Selim Chidiac, CEO North America
• Ubiquitous presence in bars and nightclubs: mixibility with vodka, status and sexiness of the sleek silver and blue can
• “Red Bull gives you wings!”
ADRENALINE MARKETING
• Risqué marketing• In-your-face, adrenaline junky image vs. Coke and Pepsi’s All-American approach
• Decision to foster rumors that Red Bull’s key ingredient, Taurine, was derived from bull testicles
RECOMMENDATIONS
•Geographical growth in emerging markets
•Turn unprofitable sports portfolio into profitable portfolio
•New product lines
NO RED BULL, NO WINGS!
THANK YOU!
SOURCES
Kim, W. Chan., and Renée Mauborgne. Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. Boston, MA: Harvard Business School, 2005. Print. Mi, JI, Six Misconceptions of Blue Ocean Strategy. Guanli Xue Jia (Management Scientist) 2008. Cirillo, Jennifer. "Red Bull - Running of the Bull." Beverage World June 2009: 18-21. Web. Bryce, David J., and Jeffrey H. Dyer. "Strategies to Crack Well-Guarded Markets." Harvard Business Review May 2007: 84-92. Web. <http://www.hbr.org>. McDonald, Duff. "The Mastermind of Adrenaline Marketing." Bloomberg Businessweek 23-29 May 2011: 64-70. Web.