PESTEL Analysis of Red Bull

1．The definition of BE
Why is it important?
2. The definition of pestel, each and for
example. Add academic reference
-why do use is

According to Business Dictionary.com(2015), business

environment is combination of internal and external factors
that influence a company's operating situation. It is
important because managers analysis these forces in the
environment as they try to plan the future of the business
(Boody,2014). PESTEL analyses is a technique for
identifying and listing the political, economic, social,
technological, environmental and legal factors in the
general environment most relevant to an organization(lbid).
We use it because it is an effective tool to analyze macro
environment, not only to analyze the external environment,
but also to recognize all the strength of impact on the
organization.
The PESTEl analysis is one of the useful techniques used in the analysis
of the Macro environment. The PESTEL analysis comprises economic,
political, technological and social factors.
Explain each.

Politic :
– Government restrictions due to the use of caffeine, taurine, guarana in the
components. (It is the case for example in Australia or even in France. The age of
the consumer, the amount of caffeine in the can, all those issues are being
discussed and regulated around the world.)
Economy :
– Global increase in purchasing power (from the catch-up of developing countries)
– Maturity of the carbonated drink market
– High industry margins
– Global economic growth recovery planned for 2014
Social :
– Development of healthy and green behaviors and beverages (eg. sports
beverages, vitamin waters…)
– Development of a society where stress and tiredness is high
– Negative health concerns about caffeine, taurine impact
Technology :
– Development of e-commerce
– Innovative alternative products (carbonated drinks, energy products…)

1.2.1.1.Political factors that, if Government imposes health and safety

restrictions on the amount of energy drinks that should be consumed, it
would affect the amount of energy drinks that are bought and also
introduces import and export charges on the energy drinks market, it may
increase or decrease the amount of energy drinks that are imported and
exported.

POLITICAL
The company has many different departments within their organization that specialize
in certain aspects, combined, their efforts keep the business running smoothly. To
avoid complexities, each department will ensure they are carrying out their
own procedures legally,

for example the finance department need to ensure all staff are paid what they are
owed and that all taxes are paid.

ENVIRONMENTAL
There is a environmental factor that can affect the image of Red
Bull, which is pollution. In 2009, there was an environmental
agency published a list which about the top ten of companies
awarded the biggest fines for waste activity and Red Bull was one of
them. Red Bull was awarded fine of £260,000 due to the recycling
problem. Red Bull realized their responsibility and improved their
recycling system in recent years.

1.2.1.2. Economical factors that, inflation would increase the price of

drinks and at the same time, consumer's real disposable income will
reduce. For that reason, consumers are likely to buy less energy drinks, as
they are not necessities.

ECONOMIC
The first economic problem is inflation will be happening when
there is too high supply of money in the economy, and it is not
appeared by the goods and services. As a result of inflation, Red
Bull might increase the price to sustain the business, also the costs of
raw materials which for production will be increased as well. The
interest rates that are provided by banks will affect Red Bull’s loans
should they need one. Should the current economic situation
continue to get worse, interest rates will rise.
(Gordon)

1.2.1.3. Social factors that, if Red Bull decides to launch its product in a
new country, its costs may rise, as it will have to produce different
language labels. Another big issue for the social factors that, as the
population of youth's increase, energy drinks companies may see an
increase in the amount of drinks sold.

SOCIAL
The drink itself has been questioned recently in America, with Red
Bull being blamed for a case of unexpected death by heart ache after
a basketball player consumed one of the cans, which has led to Red
Bull being sued for $85million. It has been well documented that the
energy drink is high in caffeine, with many critics suggesting it
shouldn’t be consumed, something that France, Norway and
Denmark have all taken into consideration and acted by banning the
product. The social implications of this are obvious, giving the
company a bad name for continuing to produce their drink with the
given recipe.
Related articles To ensure they are reaching out to a wider market,
Red Bull produced the sugar free version of their energy drink. This
would appeal to people that are more conscious of the health issues,
which is something that Red Bull recognised and acted on to prevent
the loss of custom. The taste in this product, as well as the original,
is another important social factor that Red Bull need to control.
1.2.1.4. Technological factors are also important for the company's as
well. Red Bull can use the Internet to help advertise and promote its
products. It can also sell large quantities of its product direct to its
consumers. It is a new way to communicate with consumers that is cheap
and efficient market research method. More hi-tech technology may
enable companies to produce more drinks at a cheaper cost and at the
same time improving the quality of the packaging.

TECHNOLOGY
With Red Bulls marketing techniques being recognised as highly
controversial and unique, they are required to pay out large amounts
of money to their stunt men/women due to the dangers they face.
This being the case, the internet is something that Red Bull heavily
rely on in order to promote their product. Websites such as
YouTube, as well as social networking sites such as Facebook and
Twitter will play an important role in helping their adverts become
recognised. Not only is this a free way of advertising, it is also
perfect for their target audience of active sports persons between 15-
30, something that matches Facebook’s target market of active
mobile phone users.

LEGAL
To ensure their product can be sold in stores, the Red Bull energy
drink will need to meet legal requirements applicable to the
countries the product is available in, in order for trading to
commence. The drink needs to be safe for humans to consume,
meaning the customer doesn’t receive any adverse side effects, i.e.
vomiting. In conjunction with this, the ingredients, along with the
quantities they use, need to be clearly stated on each can or pack.
This is a legal requirement to avoid consumers having a reaction,
potentially leading to them filing a law suit generating bad press.

age in UK.
For example: caffeine ?
Macro pestel redbull google

A PEST ANALYSIS OF THE MARKET

All industries must be considered in their environment in order to be aware of all
the issues which could affect it.
First of all, we decided to carry out a PEST analysis :
Politic :
– Government restrictions due to the use of caffeine, taurine, guarana in the
components. (It is the case for example in Australia or even in France. The age of
the consumer, the amount of caffeine in the can, all those issues are being
discussed and regulated around the world.)
Economy :
– Global increase in purchasing power (from the catch-up of developing countries)
– Maturity of the carbonated drink market
– High industry margins
– Global economic growth recovery planned for 2014
Social :
– Development of healthy and green behaviours and beverages (eg. sports
beverages, vitamin waters…)
– Development of a society where stress and tiredness is high
– Negative health concerns about caffeine, taurine impact
Technology :
– Development of e-commerce
– Innovative alternative products (carbonated drinks, energy products…)
Lena St
Sources :
Soft drink companies, october 2012, Xerfi Global
http://www.abc.net.au
http://www.anpaa.asso.fr