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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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.

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. The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products.

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. Views Read Edit View history.

Different languages Different ethnicities; lack of ghemawag ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions.

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Pankaj Ghemawat

Because they affect fundamental business practices, they often affect the competitive position of firms as well. Facebook has more than million users that makes it the 3rd largest country in the world. 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.

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…. 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.

Each dimension of CAGE is described below. The complete article reference is here: 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 CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies.

Pankaj Ghemawat: Differences and the CAGE Distance Framework

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. Lack of colonial ties Lack of shared regional trading bloc Lack of common rramework Political hostility.

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.

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The CAGE Framework – Distance Matters in Globalization!!!

Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level. Leave a Reply Cancel reply Your email address will not be published. By using this site, you cag to the Terms of Use and Privacy Policy.

How far apart are trading partners in physical terms: Here is the list of the…. Always a good reference….

Ghemawat offers some advice on how the CAGE Framework ggemawat help managers considering international strategies:. Distinct cultural differences are observed around the following dimensions: This page was last edited on 12 Septemberat Do you want to impress or confuse clients or Vice Versa? Retrieved from ” https: The other day, a doctor was asking me about investment banking and why is it so hot. The moment you feel the need to tightly manage someone, you have made a hiring mistake.

The more two countries differ across these dimensions, the riskier the target foreign market.

The hard reality of global expansion. This has been one of the biggest barriers, for instance, in the way of U. Comment Name Email Website.