Beiersdorf AG

							                                           Exam
                                      Dr. Alexander Nill
                                          MKT 456
                                          Fall 2011

Good Luck!

Part 1. (60%)
                                    Red Bull Goes to China
The energy drink Red Bull is produced by the Austrian Company Red Bull GMBH. Founded
in 1987, the privately held energy drink producer achieved sales of more than € 3.8 billion in
more than 160 countries in 2010. For 2011 projected sales are € 4.2 billion. According to the
owner and CEO of the company, Dietrich Mateschitz, about 10% of sales were profits. The
major part of Red Bull´s expenditures are marketing related. The energy drink producer has
traditionally pursued a global communication strategy with high marketing activity for
advertisement, sponsorship and product placement. Their slogan is "Red Bull gives you
wings” and has been used consistently around the world. Red Bull sponsors two Formula-1
drivers, four football teams and hundreds of sport events. The management pursues the
strategy to invest the major part of profits into the trade mark Red Bull. As a result, the
company’s trade mark is the most precious one of Austria.

Red Bull's rapid international expansion has earned it the undisputed number one position in
the world's energy drinks market, according to Euromonitor International. In the face of
growing competition from rival brands such as Hansen Natural Corp's Monster in the US, Red
Bull is planning a more aggressive assault on Asia. Red Bull plans to enter China next year.
Red Bull's prime consumers are in their 20s and the large youth population in the region can
potentially become energy drinks consumers in the long term. Last year Chinese energy drink
sales reached 5 billion yuan, registering an annual growth of 45%, according to the market
research group China Investment Research Consultant. Compared with the world's developed
countries where the average per capita consumption of functional drinks is about 7 liter per
year, the average Chinese consumer only drinks 0.5 liter of functional drinks.



   1) Going global
      Red Bull has been truly committed to becoming a global company. The company has
      been entering new markets at breathtaking speeds. What are potential advantages and
      disadvantages of going global? (8 points)

   2) Competitive analysis
      Red Bull has been very successful and made its owner one of the richest people in
      Austria.
         a. What is Red Bull’s main competitive advantage? (3 points)
         b. How does Red Bull achieve this competitive advantage? What core
             competencies are required to pursue Red Bull’s global competitive strategy? (7
             points)

   3) What are important criteria to assess the attractiveness of the Chinese market for Red
      Bull? (8 points)