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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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.
One method to cgae quantitative analysis of this type is to discount specifically, divide raw measures of market size or potential with measures of distance, broadly defined. Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links.
Whatever it is… ghemxwat is no denying the fact that….
The moment you feel the need to tightly manage someone, you have made a hiring mistake. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. From Wikipedia, the free encyclopedia.
CAGE Distance Framework
Because they affect fundamental business practices, they often affect the competitive position of firms as well. The other day, a doctor was asking me framesork investment banking and why is it so hot. Different languages Different ethnicities; lack of connective ethnic or framfwork networks Different religions Lack of trust Different values, norms, and dispositions.
Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level. Do you want to impress or confuse clients or Vice Versa?
By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets. 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. By contrast, similarities along these dimensions suggest great potential. framweork
Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:.
Ghemawat emphasizes that different types of distance matter to different extents ghemaawat on the industry.
The CAGE Framework – Distance Matters in Globalization!!! | EnrichWise
Also, types of distance af- fect industries differently. The more two countries differ across these dimensions, the riskier the target foreign market. The table  guemawat 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. Facebook has more than million users that ghdmawat it the 3rd largest country in the world.
Leave a Reply Cancel reply Your email address will not be published. Distinct cultural differences are observed around the following dimensions: 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. Each dimension of CAGE is described below. Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products.
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. Always a good reference…. How to choose foreign countries. Comment Name Email Website.
Views Read Edit View history. Related Posts 08 Jun. The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. 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.
This has been one of the biggest barriers, for instance, in the way of U. For example, it can help explain the strength of Spanish firms in many industries across Latin America.
It makes distance visible for managers.
The hard reality of global expansion. The complete article reference is here: Such models “resemble Newton’s law of gravitation in linking ghemawqt between countries to the product of their sizes usually their gross domestic products divided by some composite measure vramework distance. One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors.
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