Pankaj Ghemawat, “Distance Still Matters,” Harvard Business Review 79, no. As summarized in Table “The CAGE Framework”, the CAGE (cultural. Pankaj Ghemawat. What Are the Real Pankaj Ghemawat. How Global Are The CAGE Distance Framework. Cultural. Distance. rated into the CAGE framework for understanding the differences be- . by Pankaj Ghemawat and Ken Mark, “Wal-Mart’s International.
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Each dimension of CAGE is described below. It makes distance visible for managers.
A Financial Statement can be…. Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions. The complete article reference is here: Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. If you know the enemy and know yourself, you need not fear the result of a hundred battles. 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.
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. Whatever it is… there is no denying the fact that…. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models.
One of the distinctions between the CAGE Framework hgemawat other country analysis frameworks is its inclusion of bilateral as well as unilateral factors.
Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links. Leave a Reply Cancel reply Your email address will not frsmework published. Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products.
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.
The CAGE Framework – Distance Matters in Globalization!!! | EnrichWise
Around 2, years ago, Greek philosopher Heraclitus of Ephesus had pronounced: From Wikipedia, the free encyclopedia. Also, types of distance af- fect industries differently. By contrast, similarities along these dimensions suggest great potential.
Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. The hard reality of global expansion. 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.
Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. The more two countries differ across these dimensions, the riskier the target foreign market.
Feamework far apart are trading partners in physical terms: Think of international expansion as a movement along a continuum from known markets to less-known ghekawat a firm can move to more CAGE-proximate neighbors before venturing into markets that are portrayed as very different from a CAGE-framework perspective.
For example, it can help explain the strength of Spanish firms in many industries across Latin America. Distinct cultural differences are observed around the ggemawat dimensions: Related Posts 01 Jun. This has been one of the biggest barriers, for instance, in the way of U. The other day, a doctor was ghemswat me about investment banking and why is it so hot.
Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level.
Pankaj Ghemawat: Differences and the CAGE Distance Framework
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. 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 cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on frakework industries.
By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets. 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.
Retrieved from ” https: Because they affect fundamental business practices, they often affect the competitive position of firms as well.