Market Size
“Size of a foreign market influences entry mode decisions, when the market size increases, benefits of internalization will increase.”
Generally speaking, the control of foreign market should be in proportion with the size of market. But it is a little bit hard for a firm to get enough and deeply understanding about the information of one market before really dip into it. As we said before, “the outsider can only achieve a very superficial comprehension of such a complex and fluid network.”(Johanson and Mattsson 1988, p.18) Therefore, the most safe way of enter into a new market is by using a relevant low risk entry mode as Red Bull’s choice (joint venture or licensing etc.). But this kind of entry mode can only apply for the market which does not require a big amount of manufacture. For Red Bull, after familiar with the local situation, European market is a definitely attractive market with high sales potentials. So some kind of high risk entry mode began to appear, like joint venture and in wholly owned subsidiaries in Austria.