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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Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links.

From Wikipedia, the free encyclopedia. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. If you are in a Business school, invariably you will get references to Porter and theories on Business Strategies…. 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. The hard reality of global expansion.

Pankaj Ghemawat: CAGE Comparator™

Also, types of distance af- fect industries differently. 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.

Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products.

The csge article reference is here: Distinct cultural differences are observed around the following dimensions: 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. Views Read Edit View history.

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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. Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. Each dimension of CAGE is described below.

The table [4] [5] shown below provides more detail on each of the CAGE categories, and how they can manifest frqmework depending on whether one is comparing a pair of countries or looking at one in isolation.

Pankaj Ghemawat

The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. Always a good reference…. Because they affect fundamental business practices, they often affect the competitive position of firms as well.

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.

This page was last edited on 12 Septemberat This has been one of the biggest barriers, for instance, in the way of U. The moment you feel the need to tightly manage someone, you have made a hiring mistake.

CAGE Distance Framework

The other day, a doctor was asking me about investment banking and why is it so hot. By using this site, you agree to the Terms of Use and Privacy Policy. One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors. Comment Name Email Website.

Here is the list of the…. Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. The more two countries differ across these dimensions, the riskier the target foreign market. 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.


It makes distance visible for managers. Related Posts 08 Jun.

For example, it can help explain the strength of Spanish firms in many industries across Latin America. Trade practices between framewlrk can be significantly affected by laws and regulations enacted at the national or international level. Retrieved from ” https: By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets.

Culture happens to be the first facet of CAGE, in terms of bhemawat acronym, but it also can be the most practically perplexing facet for managers. Lack of colonial ties Lack frsmework shared regional trading bloc Lack of common currency Political hostility. Whatever it is… there is no denying the fact that….

Leave a Reply Cancel reply Your email address will not be published. Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions.

Is value creation by Venture Capitalists a reality or myth? How to choose foreign countries. Facebook has more than million users that makes it the 3rd largest country in the world.

The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. How far apart are trading partners in physical terms: Do you want to impress frakework confuse clients or Vice Versa?