Know the reasons why CAGE analysis emphasizes distance. Pankaj “ Megawatt” Ghemawat is an international strategy guru who developed the CAGE . Pankaj Ghemawat. What Are the Real Pankaj Ghemawat. How Global Are The CAGE Distance Framework. Cultural. Distance. Culture happens to be the first facet of CAGE, in terms of the acronym, but it also CAGE Framework, MBA discussions, Pankaj Ghemawat.

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Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links. By using this site, you agree to the Terms of Use and Privacy Policy. It should be a frameeork consideration for a consumer goods or media company, but it is much less important for a cement or steel business. Whatever it is… there is no denying the fact that…. Related Posts 18 Jul.

Views Read Edit View history. One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors. This page was last edited on 12 Septemberat The hard reality of global expansion.

Facebook has more than million users that makes it the 3rd largest country in the world. For instance, a firm maybe most interested in markets with high consumer buying power, so it uses per capita income as the first sorting cue.

Comment Name Email Website. Such models “resemble Newton’s law of gravitation in linking interactions between countries to the product of their sizes usually their gross domestic products divided by some composite measure of distance. Distinct cultural differences are observed around the following dimensions: From Wikipedia, the free encyclopedia. The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries.

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The more two countries differ across these dimensions, the riskier the target foreign market. For example, it can help explain the strength of Spanish firms in many industries across Latin America.

CAGE Distance Framework – Wikipedia

Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. How to choose foreign countries.

Because geographic distance, for instance, affects the costs of transportation, it frameework of particular importance to companies dealing in heavy or bulky products. The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models.

British politician and cae known for his leadership of the United Kingdom during the…. Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions. How far apart are trading partners in physical terms: One method to conduct quantitative analysis of this type is to discount specifically, divide raw measures of market size or potential with measures of distance, broadly defined.

The CAGE Framework – Distance Matters in Globalization!!! | EnrichWise

Each dimension of CAGE is described below. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. Around 2, years ago, Greek philosopher Heraclitus gheemawat Ephesus had pronounced: It makes distance visible for managers.

By contrast, similarities along these dimensions suggest great potential. Think of international expansion as a movement along framewokr continuum from known markets to less-known markets; a firm can move to more CAGE-proximate neighbors before venturing into markets that are portrayed as very different from a CAGE-framework perspective.

Leave a Reply Cancel reply Your email address will not be published. The table [4] [5] shown below provides more detail on each of the Framesork categories, and how they can manifest themselves depending on whether one is comparing a pair of countries or looking at one in isolation.


Also, types of distance af- fect industries differently. Application of the CAGE framework requires managers to identify attractive locations based on raw material costs, access to markets or consumers, or other key decision criteria. Is value creation by Venture Capitalists a reality or myth?

Retrieved from ” https: Trade practices between countries can be significantly frmaework by laws and regulations enacted at the national or international level. The complete article reference is here: Lack framewprk colonial ties Lack of shared regional trading tramework Lack of common currency Political hostility.

Sir Winston Churchill — Culture happens to be the first facet of CAGE, in terms of the acronym, but it also can be the most practically perplexing facet for managers. The other day, a doctor was asking me about investment banking and why is it so hot.

The CAGE Framework – Distance Matters in Globalization!!!

Because they affect ghe,awat business practices, they often affect the competitive position of firms as well. If you know the enemy and know yourself, you need not fear the result of a hundred battles. This has been one of the biggest barriers, for instance, in the way of U.

By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets.