Pankaj Ghemawat, “Distance Still Matters,” Harvard Business Review 79, no. As summarized in Table “The CAGE Framework”, the CAGE (cultural. Pankaj Ghemawat. What Are the Real Pankaj Ghemawat. How Global Are The CAGE Distance Framework. Cultural. Distance. rated into the CAGE framework for understanding the differences be- . by Pankaj Ghemawat and Ken Mark, “Wal-Mart’s International.
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A Financial Statement can be….
CAGE Distance Framework
Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. Distinct cultural differences are observed around the following dimensions: One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors.
Each dimension of CAGE is described below. For example, it can help explain the strength of Spanish firms in many industries across Latin America.
How far apart are trading partners in physical terms: This has been one of the biggest barriers, for instance, in the way of U. It makes distance visible for managers. Because they affect fundamental 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.
From Wikipedia, the free encyclopedia. Views Read Edit View history. Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. This page was last edited on 12 Septemberat Comment Name Email Website. Also, types of distance af- fect industries differently. The more two countries differ across these dimensions, the riskier the target foreign market.
By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets. 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.
Related Posts 01 Jun. Such models “resemble Newton’s law of gravitation pankaaj linking interactions between countries to the product of their sizes usually their gross domestic products divided by some composite measure of distance. The hard reality of global expansion. The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries.
Pankaj Ghemawat: CAGE Comparator™
Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. Leave a Reply Cancel reply Your email address will not be published. Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links.
Retrieved from ” https: Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions.
The CAGE Framework – Distance Matters in Globalization!!! | EnrichWise
It should be a crucial consideration for a consumer goods or media company, but it is much less important for a cement or steel business. Trade practices between countries can be significantly affected fframework laws and regulations enacted at the national or international level.
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.
Think of international expansion as gheamwat 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.
By contrast, similarities along these dimensions suggest great potential.
Culture happens to be the first facet of CAGE, in terms of the acronym, gjemawat it also can be the most practically perplexing facet for managers. Whatever it is… there is no denying the fact that…. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies.
Around 2, years ago, Greek philosopher Heraclitus of Ephesus had pronounced: Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products. The other day, a doctor was asking me about investment banking and why is it so hot. Application of the CAGE framework requires managers to identify attractive locations based on raw material costs, access to ccage or consumers, or pamkaj key decision criteria.
Is value creation by Venture Capitalists a reality ;ankaj myth? How to choose foreign countries. The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models.