Pankaj Ghemawat, “Distance Still Matters,” Harvard Business Review 79, no. As summarized in Table “The CAGE Framework”, the CAGE (cultural. Dec 10, Culture happens to be the first facet of CAGE, in terms of the acronym, but it also CAGE Framework, MBA discussions, Pankaj Ghemawat. Pankaj Ghemawat . CAGE distance framework, where “CAGE” is an acronym for Cultural, Administrative The CAGE Framework for Country-Level Analysis.
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Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. Related Posts 08 Jun. Vage practices between countries can be significantly affected by laws and regulations enacted at the national or international level. Retrieved from ” https: The hard reality of global expansion. The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. If you are in a Business school, invariably you will get references to Porter and theories on Business Strategies….
Comment Name Email Website. For instance, a firm maybe most interested in markets with high consumer gheamwat power, hgemawat it uses per capita income as the first sorting cue. This has been one of the biggest barriers, for instance, in the way of U. How far apart are trading partners in physical terms: Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions.
This page was last edited on 12 Septemberat It should be a crucial consideration for a consumer goods or media company, csge it is much less important for a cement or steel business.
The CAGE Framework – Distance Matters in Globalization!!!
Distinct cultural differences are observed around the following dimensions: Such models “resemble Newton’s law of gravitation in linking interactions between countries to the product of their sizes usually their gross frameork products divided by some composite measure of distance.
Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products. 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.
Whatever it is… there is no denying the fact that…. The other day, a doctor was asking me about investment banking and why is it so hot. The table   shown below provides more detail on each of the CAGE categories, and how they can manifest themselves depending on whether one is comparing a pair of countries or looking at one in isolation.
The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. Always a good reference…. Facebook has more than million users that makes it the 3rd largest country in the world.
Also, types of frameork af- fect industries differently. It makes distance visible for managers.
CAGE Distance Framework
gbemawat From Wikipedia, the free encyclopedia. Do ghemawah want to impress or confuse clients or Vice Versa? How to choose foreign countries. Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links. 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.
Pankaj Ghemawat: Differences and the CAGE Distance Framework
Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. Is value creation by Venture Capitalists a reality or myth? One of ghrmawat distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors.
Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility.
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The more guemawat countries differ across these dimensions, the riskier the target foreign market. The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. Because they affect fundamental business practices, they often affect the competitive position of firms as well. For example, it can help explain the strength of Spanish firms in many industries across Latin America.
Think of international expansion as a movement along a 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.