Red Bull Rule in the International Economics

Red Bull Rule in the International Economics

Red Bull operations have significant impacts on the global economy. Although some effects are positive, it is critical to note that the global corporation has also had adverse impacts on the economy. Red Bull brand is one of the highly consumed energy drinks in the globe. Whereas Red Bull is produced in Austria, it is consumed in more than 160 countries. This indicates that the company has substantial impacts on the global economy, social, and political structures. Red Bull market share is estimated to be between 70% and 90% in nations where it has active operations.

Although there have been attempts by Coca-Cola and other brands to counter the competitiveness of Red Bull, the brand still command the large portion of the global energy drink consumption market. Before embarking on the impacts of the corporation, it is vital to focus on its history as well as factors that have improved its global presence. Dietrich Mateschitz established the company in 1984. The Red Bull drink is based on the concept of the Krating Deang; a popular Thai tonic drink. The brand has shifted from a regional drink to one of the highly consumed energy drinks in the globe. Likewise, its operations continue to have some impacts on the regional and global communities as well as markets. Through the use of a formula, Dietrich developed the product to fit into the Asian and the Western market.

In 1992, the Red Bull brand recorded its first global sales after venturingin the Hungarian market. Currently, Red Bull is consumed in more than 160 countries and is regarded as one of the largest energy brands in the globe in term of revenue levels. The breakthrough of the Red Bull brand was recorded after venturing into the USA and other European markets. Currently, the USA and Germany accountfor the largest sales levels of the brand.

Compared to other beverage markets, the energy sector can be regarded as being new and has few players. Red Bull serves as one of the organizations that captured a large global market during the early stages.Rather than trying to compete with Pepsi and Coca Cola, Dietrich Mateschitz embarked on launching a new product that would attract a new segment of customers with a distinctive lifestyle. Additionally, the drink does not just depend on taste as it is the case with other drinks. On the contrary, it focuses on the ability to energize both the mind and the body.

Impacts on the Global Economy

  1. Creation of Employment

Currently, Red Bull has plants and distribution centers in different parts of the globe.  Focusing on the number of Red Bull employees indicates that they have been increasing in the past six years. While the number of employees stood at 10, 410 in 2014, it is worth noting that there are more than 12, 000 workers currently.

In many developing countries such as Hungary and Vietnam, the organization has played an important role in the reduction of the rate of unemploymentthus contributingto an improved quality of life among workers (Thompson et al. 2018). In 2017, the global unemployment level stood at 5.6% with most cases of unemployment stemming from third world countries. Red Bull can thus be defined as being an important employer and has contributed to the reduction of global unemployment.





  1. Forward Direct Investments

In 2018, Red Bull management announced that it would pump more than 120 million dollars in the Vietnam energy drink market. The capital injection is expected to improve its plants and distribution networks in the country (Roux et al. 610). The move is expected to increase the Red Bull market share from 42% to 50%. In a 2017 press briefing, Saravoot Yoovidhya expressed that Red Bull had a five-yeardevelopment plan that sought to increase its presence in Asia and other parts of the globe. It is critical to note that Vietnam is regarded as being one of the fastestgrowing countries in the region.Since entering Vietnam in 1999, Red Bull has pumped huge investments in the economy thus improving the competitiveness of the country in the global stage.


Consumption levels of Red Bull in the USA market.

  1. Generating Revenues to the Host Countries

Currently, the Red Bull brand is present in more than 160 countries implying that it contributes to the development of these economies through employment, paying taxes, and providing other economic incentives. Foreign companies tend to pay a certain percentage of their earnings to the host governments (Hardy& Jonathan, 115). Huge profit implies that the host government will access more revenues in terms of taxes and customs. Many developing countries have benefited from the active operations of Red Bull as taxes generated from the company can be used in the delivery of social amenity services as well as strengtheningeconomicstructures.

Development in economicstructures often has the benefit of attractingforeigninvestors. The move by Red Bull to create active operations in many third world countries is likely to attract other companies,mainlyits competitors to engage in global ventures. An increase in the number of foreign players will not onlyproliferate employment opportunities, but it will also grow revenue levels. Moreover, the continued pumping of huge capital investments is an effective way of addressing the disparities between developed and developing economies.

  1. Innovation and Competition

Since the introduction of the Red Bull brand, there have been attempts by Pepsi, Coca-Cola, and other brands to venture the market. Contrary to the setting where the market remained unexploited, there is a growing level of competition on a global scale. Some of the notable competitors include Dr. Pepper Snapple, Nestle, Coca-Cola, PepsiCo, and Monster energy. Over the years, these brands have equally captured a significantglobal market. The trend indicates that the operationsof Red Bull corporation have led to innovations and developments in the global economy. While the cut-throat competition may lower the competitiveness of Red Bull Inc., it contributes to the growth of global markets (Burmann et al. 296). Revenues generated by these brands are used to better economic structures as well as create new businessincentives.

  1. Opening up New Markets

Just like other global ventures, Red Bull Corporation has in the past yearsregistereditscommitment to venture in third world countries such as LatinAmerica and Africa. It is imperative to mention that these markets were previously sidelined and alienated from global economicactivities. The trend leads to the unequal distribution of income and prevalence of poverty in these countries. However, this is no longer the case as the company has been on the leading front in openingbranches in these areas. Other than selling itsbrands in these markets, the company has also undertaken to improve the local distribution and transport networks. Such developments not onlybenefit Red Bull, but they also lead to a rise in the number of new businesses.

Despite thesecontributions, it is worth noting that there are negative factors that come with the expansion of Red Bull to the global scene (Burmann et al. 300). The organization has led to significantdisruptions on the local market players, and this has resulted in the collapse of many local brands. The argument rests on the fact that the company has a huge pool of resources that make it easy to venture into new markets as well as counter the level of competition. One of the factors that contribute to the success of the organization is its expansive distribution networks. The situation is compounded by the fact that many businesses in third world countries lack access to empowermentopportunities that would aid in the expansion of their ventures.

On the other hand, there is the view that most of the earnings are exportedtoAustria and other countries. This implies that most of the host countries only have access to a low margin of profits. Despite providing employment and other economic benefits, there is the view that multinational companies often tend toexport a significant portion of their profits to the parent country. This stands out even though there is the risk of pushing local players out of the market. The trend can be defined as being unfairand leads to the unequal distribution of income. The pattern thus contradicts the need to create a more equitable globe where all countries have access to equal economic opportunities (Thompson, Jody, and Carey, 2018). Moreover, more people will get jobs, and this will improve their living standards and lifestyle.

There are also issues to do with the welfare of workers. Focusing on the operations of companies in different countries indicates that there are some disparities in the compensation levels. Such acts are discriminatory and lead to the suffering of some groups. An example can be seen in the compensation levels between the developed anddeveloping countries. There is the view that the working conditions among workers tend to vary (Asiedu & Elvis, 2016). The prevalence of such problems creates the impression that the global corporationisexploitingitsworkers and stakeholders. Nonetheless, addressing such issues would ensure that there are more gains as compared to problems.

From the listed information, it isevidentthat Red Bull has significant impacts on the global economy. Since its creation in the 1980s, the corporation has taken a leading role in the shaping of the global economy. The argument is supported by the fact that Red Bull provides employment opportunities to thousands of workers thus contributing to the improvement of their standardsof living. Secondly, the opening up of ventures in third world countries has been effective in promoting equal distribution of income and equality in global economicactivities. The investment further implies that there is an increase in the foreigndirectinvestment inflows and the revenues that are paid to the hostgovernment. While there are some negativeimpacts, the positive effects tend to outweigh problems that are linked with the global expansion of Red Bull Inc.


Works Cited

Asiedu, Elvis. “How to create and sustain a strategic marketing plan through the 4p’s of Innovation: With reference to Red Bull energy drink company.” (2016).

Burmann, Christoph, et al. “International Identity-Based Brand Management.” Identity-Based Brand Management. Springer Gabler, Wiesbaden, 2017. 291-312.

Hardy, Jonathan. “Branded content: Media and marketing integration.” The Advertising Handbook. Routledge, 2018. 102-117.

Le Roux, André, et al. “Brand typicality impact on brand imitations evaluation and categorization.” Journal of Product & Brand Management 25.6 (2016): 600-612.

Thompson, Jody A., and Carey J. Fitzgerald. “State Mindfulness and the Red Bull Effect.” Journal of Articles in Support of the Null Hypothesis 15.1 (2018).

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