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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Facebook has more than million users that makes it the 3rd largest country in the world. How to choose foreign countries. Landlockedness Cate of internal navigability Geographic size Geographic remoteness Weak transportation or communication links.
Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility.
CAGE Distance Framework
Leave a Reply Cancel reply Your email address will not be published. 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 by laws and regulations enacted at the national or international level. Always a good reference…. The hard reality of global expansion.
Pankaj Ghemawat: CAGE Comparator™
Whatever it is… there is no denying the fact that…. This page was last edited on 12 Septemberat 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. It makes distance visible for managers.
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. 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.
Distinct cultural differences are observed around the following dimensions: Because they affect fundamental business practices, they often affect the competitive position of firms as well. Comment Name Email Website. Also, types of distance af- fect ghemawag differently. How far apart are trading partners in physical terms: The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries.
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. Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies.
By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in cae foreign markets.
Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. Different languages Different ghemaawt lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions.
The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. Is value creation by Venture Capitalists a reality or myth?
Views Read Edit View history. Related Posts 08 Jun. The other day, a doctor was asking me about investment banking and why is it so hot. If you are in a Business school, invariably you will get references to Porter and theories on Business Strategies….
This has been one of the biggest barriers, for instance, in the way of U. 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.
From Wikipedia, the free encyclopedia. Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. For example, it can help explain the strength of Spanish firms in many industries across Latin America.
The more two countries differ across these dimensions, the riskier the target foreign market. The complete article reference is here: 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.
Do you want to gehmawat or confuse clients or Vice Versa? By contrast, similarities along these dimensions suggest great potential.
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. The moment you feel the need to tightly manage someone, you have made a hiring mistake.