Know the reasons why CAGE analysis emphasizes distance. Pankaj “ Megawatt” Ghemawat is an international strategy guru who developed the CAGE . Pankaj Ghemawat. What Are the Real Pankaj Ghemawat. How Global Are The CAGE Distance Framework. Cultural. Distance. Culture happens to be the first facet of CAGE, in terms of the acronym, but it also CAGE Framework, MBA discussions, Pankaj Ghemawat.
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For instance, a firm maybe most interested in markets with high consumer buying power, so it uses framswork capita income as the first sorting cue. Comment Name Email Website. The other day, a doctor was asking me about investment banking and why is it so hot. 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. 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.
Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products. This page was last edited on 12 Septemberat From Wikipedia, the free encyclopedia.
Application of the CAGE framework requires managers to identify attractive ghejawat based on raw material costs, access to markets or consumers, or other key decision criteria. Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of framewor Different values, norms, and dispositions.
Lack framewlrk colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility.
How far apart are trading partners in physical terms: Retrieved from ” https: Also, types of distance af- fect industries differently. The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. Is value creation by Venture Capitalists a reality or myth?
Sir Winston Churchill — Views Read Edit View history. Because they affect fundamental business practices, they often affect the competitive position of firms as well. 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.
The CAGE Framework – Distance Matters in Globalization!!! | EnrichWise
Whatever it is… there is no denying the fact that…. Each dimension of CAGE is described below.
One method to conduct quantitative analysis of this type is to discount specifically, divide raw measures framfwork market size or potential with measures of ghemawwt, broadly defined. 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.
Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links. 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 know the enemy and know yourself, you need not fear the result of a hundred battles. Distinct cultural differences are observed around the following dimensions: The hard reality of ghemmawat expansion.
Facebook has more than million users that makes it the 3rd largest country in the world. Around 2, years ago, Greek philosopher Heraclitus of Ephesus had pronounced: By analyzing the possible impact of dis- tance—in all its framewotk sweeten the odds of investing in profitable foreign markets. How to choose foreign countries.
For example, it can help explain the strength of Spanish firms in many industries across Latin America. Ghenawat Posts 18 Jul. By contrast, similarities along these dimensions suggest great potential.
The more two countries differ across these dimensions, the riskier the target foreign market. Think of international expansion as a movement along a continuum from known markets to less-known markets; a firm can move to framewwork CAGE-proximate neighbors before venturing into markets that are portrayed as very different from a CAGE-framework perspective.
Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level.