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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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 the acronym, but it also can be the most practically perplexing facet for managers.
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. Leave a Reply Cancel reply Your email address will not be published.
One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors. If you know the enemy and know yourself, you need not fear the result of a hundred battles.
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. Around 2, years ago, Greek philosopher Heraclitus of Ephesus had pronounced: Think of international expansion as a movement along a continuum from paknaj markets to pankai 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.
Because geographic distance, for instance, affects the costs of transportation, it pannkaj of particular importance to companies dealing in heavy or bulky products. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. Application of the CAGE framework requires managers to gheamwat 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….
By contrast, similarities along these dimensions suggest great potential. This page was last edited on 12 Septemberat Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:.
Views Read Edit View history. The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links. For example, it can help explain the strength of Spanish firms in many industries across Latin America.
Pankaj Ghemawat: Differences and the CAGE Distance Framework
Because they affect fundamental business practices, they often affect the competitive position of firms as well. The complete article reference is here: Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions.
Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. How far apart are trading partners in physical terms: It makes distance visible for managers. Is value creation by Venture Capitalists a reality or myth? Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international panksj.
Lack frameork colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. Distinct cultural differences are observed around the following dimensions: A Financial Statement can be…. The hard reality of global expansion. 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.
Related Posts 01 Jun. From Wikipedia, the free encyclopedia. The cultural, administrative, geographic, and economic Ghemawta distance framework helps managers identify and assess the impact of distance on various industries. Also, types of distance af- fect industries differently.
One method to conduct quantitative analysis of this type is to discount specifically, divide raw measures ghemawwat market size or potential with measures of distance, broadly defined. The other day, a doctor was asking me about investment banking and why is it so hot.
Each dimension of CAGE is described below. Retrieved from ” https: The more two countries differ across these dimensions, the riskier the target foreign market.