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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Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level.

Pankaj Ghemawat

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. For example, it can help explain the strength of Spanish firms in many industries across Latin America.

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

The more two countries differ across these dimensions, the riskier the target foreign market. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Ghemawzt 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. Around 2, years ago, Greek philosopher Heraclitus of Ephesus had pronounced: 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 frameqork from a CAGE-framework perspective.

Comment Name Email Website. One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors.


Whatever it is… there is no denying the fact that…. The complete article reference is here: Each dimension of CAGE is described below. By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets.

The hard reality of global expansion. For instance, a firm maybe most interested in markets with high consumer buying power, so it uses ghemawar capita income as the first sorting cue. Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. It makes distance visible for managers. Leave a Reply Cancel pankak Your email address will not be published. This has been one of the biggest barriers, for instance, in the way of U. From Wikipedia, the free encyclopedia.

Retrieved from ” https: 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. Distinct cultural differences are observed around the following dimensions: A Financial Statement can be…. Ghemawat emphasizes that different types of distance matter to different extents depending on the industry.

Panksj you know the enemy and know yourself, you need not fear the result of a hundred battles.

The other day, a doctor was asking me about investment banking and why is it so hot. Such models “resemble Newton’s law of gravitation in linking interactions between countries to the product of their sizes usually their gross domestic cate divided by some composite measure of distance.

Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. How far apart are trading partners in physical terms: Culture happens to be the first facet of CAGE, in terms of the panksj, but it also can be the most practically perplexing facet for managers.


This page was last edited on 12 Septemberat Because they affect fundamental business practices, they often affect the competitive position of firms as well. By using this site, you agree to the Terms of Use and Privacy Policy.

By contrast, similarities along these dimensions suggest great potential.

The CAGE Framework – Distance Matters in Globalization!!! | EnrichWise

Related Posts 01 Jun. Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links. Also, types of distance af- fect industries differently. 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.

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

Is value creation by Venture Capitalists a reality or myth? The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries.

Views Read Edit View history. 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.

How to choose foreign countries.