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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CAGE Distance Framework – Wikipedia

The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies.

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.

From Wikipedia, the free encyclopedia. The moment you feel the need to tightly manage someone, you have made a hiring mistake. The hard reality of global expansion. Distinct cultural differences are observed around the following dimensions: Whatever it is… there is no denying the fact that….

Facebook has more than million users that makes it the 3rd largest country in the world. 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.

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The CAGE Framework – Distance Matters in Globalization!!!

Retrieved from ” ffamework The complete article reference is here: Each dimension of CAGE is described below. Views Read Edit View history. The table [4] [5] 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.

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 more two countries differ across these dimensions, the riskier the target foreign market. If you are in a Business school, invariably you will get references to Porter and theories on Business Strategies…. How to choose foreign countries. One of the distinctions between the CAGE Framework and other country analysis ghemaawat is its inclusion of bilateral as well as unilateral factors.

Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets. Do you want to impress or confuse clients or Vice Versa?

Always a good reference….

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. This has been one of the biggest barriers, for instance, in the way of U. It makes distance visible for managers.

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Pankaj Ghemawat: Differences and the CAGE Distance Framework

The other day, a doctor was asking me about investment banking and why is it so hot. For example, it can help explain the strength of Spanish firms in many industries across Latin America.

Also, types of distance af- fect industries differently. 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 08 Jun. The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. By using this site, you agree to the Terms of Use and Privacy Policy.

Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:.

Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions. This page was last edited on 12 Septemberat Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products.

Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. Because they affect fundamental business practices, they often affect the competitive position of firms as well.