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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This has been one of the biggest barriers, for instance, in the way of U. It makes distance visible for managers. From Wikipedia, the free encyclopedia.
Always a good reference…. Related Posts 08 Jun.
The CAGE Framework – Distance Matters in Globalization!!!
One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors. The other day, a doctor was asking me about investment banking and why is it so hot.
Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. Facebook has more than million users that makes it the 3rd largest country in the world. For example, it can help explain the strength of Spanish firms in many industries across Latin America. Views Read Edit View history. By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets.
By contrast, similarities along these dimensions suggest great potential. The more two countries differ across these dimensions, the riskier the target foreign market. Ghemawat emphasizes that different types of distance matter to different extents depending on the industry.
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. Do you want to impress or confuse clients or Vice Versa?
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.
The complete article reference is here: 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. 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.
Different hhemawat Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions. Retrieved from ” https: Here is the list of the…. Leave a Reply Cancel reply Your email address will not be published.
The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. 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.
CAGE Distance Framework – Wikipedia
The moment you feel the need to tightly manage someone, you have made a hiring mistake. This page was last edited on 12 Septemberat 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.
Because they affect fundamental business practices, they often affect the frajework position of firms as well. Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products. How to choose foreign countries.
Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links. Distinct cultural differences are observed around the following dimensions: Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level. How far apart are trading partners in physical terms: Also, types of distance af- fect industries differently.
Is value creation by Venture Capitalists a reality or myth? Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Gheamwat hostility. If you are in a Business school, invariably you will get references to Porter and theories on Business Strategies….
The table  framesork shown below provides more detail on each of the CAGE cagf, and how they can manifest themselves depending on whether one is comparing a pair of countries or looking at one in isolation. 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. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies.