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

CAGE Distance Framework

Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. How to choose foreign countries.

One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors. The hard reality of global expansion.

Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products. The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models.

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. Always a good reference….

The more two countries differ across these dimensions, the riskier the target foreign market. Facebook has more than million users that makes it the 3rd largest country in the world. Views Read Edit View history.


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.

Retrieved from ” https: The moment you feel the need to tightly manage someone, you have made a hiring mistake. The complete article reference is here: From Wikipedia, the free encyclopedia.

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

The CAGE Framework – Distance Matters in Globalization!!!

Whatever it is… there is no denying the fact that…. Ghemqwat method to conduct quantitative analysis of this type is to discount specifically, divide raw ghemaeat of market size or potential with measures of distance, broadly defined. The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets.

Distinct cultural differences are observed around the following dimensions: Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level. This page was last edited on 12 Septemberat For example, it can help explain the strength of Spanish firms in many industries across Latin America.

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


The other day, a doctor was asking me about investment banking and why is it so hot. Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. Is value creation by Venture Capitalists a reality or myth? Do you want to impress or confuse clients or Vice Versa?

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

How far apart are trading partners in physical terms: Also, types of distance af- fect industries differently. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies.

By contrast, similarities along these dimensions suggest great potential. Because they affect fundamental business practices, they often affect the competitive position of firms as well. Leave a Reply Cancel reply Your email address will not be published. By using this site, you agree to the Terms of Use and Privacy Policy. Related Posts 08 Jun.

Pankaj Ghemawat: Differences and the CAGE Distance Framework

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

If you cave in a Business school, invariably you will get references to Porter and theories on Business Strategies…. Each dimension of CAGE is described below. 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.