Energy Drink Industry Analysis

Energy drink industry analysis 1
ENERGY DRINK INDUSTRY ANALYSIS
(Name)
Name of Professor
Name of the Institution
Location of the Institution

Energy drink industry analysis 2
THE FIVE FORCE ANALYSES OF RED BULL ENERGY DRINK
Executive summary
The following a five-force porter’s analyses for red bull energy drink. The analysis looks into the
competition that is facing the energy drink in Australia concerning the other brands. It also gives
the bargaining power of the buyers. In addition, the strategies that the brand has used to reduce
the bargaining power of the buyers as well as the suppliers. Threat of new entrants into the
market is also a very important aspect of a business. In addition, substitutes of a commodity can
be a great threat to the commodity and has been put into consideration.
Introduction
Energy drinks are one of the emerging commodities in the world that are having a very
high rate of growth in their market. People in the world are shifting from the consumption of
carbonated drinks to taking more healthy drinks. This has enabled the energy drinks market of
energy drinks to be increased at a very high rate. The products have translated from being a niche
commodity to a fast growing in the drinks markets. These changes are evident because the
people are more focused on being fit and healthy. People are trying as much as they can to avoid
complications that are brought by carbonated drinks.
Red bull is an Australian product that is a product. It is the most selling energy drink worldwide
and has more than 5.8 billion cans sold in 2016. It is a modification of a Thailand drink called
Krating, which was designed to meet the taste of the western consumers (Henges, et al 2018).
The drink is designed in 19 different types based on different flavors. The company has also
been involved in sporting activities in a very extensive way. The brand has become continually

Energy drink industry analysis 3
popular and is extending to different markets n the world. It sponsors extreme sporting activities
such as crushed ice and others. The following is a five porter's analysis for of the brand.
Competitive rivalry
Very many companies in the world manufacture energy drinks. The different companies
include the monster, full throttle, and rockstar. All these companies are part of the competitive
rivals for red bull. However, the red bull has been able to secure a very great market share in the
drinks market than all the other competitors while combined. There is a continuous growth in the
energy drink industry and this is an opportunity for both red bull and the competitors. Red Bull
has been a leading example and the competitors are trying to follow the footsteps by making
their business diverse and getting involved in sporting activities (Morley, Howard, and Henges,
2018). Having a great share of the energy drinks market the company means that red bull is
having many competitors and therefore is facing a very high competition.
The threat of new entrants
For a business to enter into the energy drink industry there has to be many innovations
that will enable the business to pick and stand. It is very difficult for a new business to enter into
the energy drinks industry and this discourages new entrants into the industry. The barriers that
prevent new entrants in the industry are very high. Those businesses in the industry made many
investments so as be who they are now (Thow, et al 2018). Therefore, new entrants will have to
spend a lot of money and other resources to be able to catch up with the existing players. In
addition, developing and economies of scale is a great barrier because it will take a lot of time to
establish. The entrants are also faced with many challenges in the effort to develop a national
distribution or even global distribution. The toughest task comes when trying to acquire a market