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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Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products. Such models “resemble Newton’s law of gravitation in linking interactions between countries to the product of their sizes usually yhemawat gross domestic products divided by some composite measure of distance.

The table [4] [5] shown below provides more detail on each of the CAGE categories, and cagge they can manifest themselves depending on whether one is comparing a pair of countries or looking at one in isolation. Whatever it is… there is no denying the fact that…. For example, it can help explain the strength of Spanish firms in many industries across Latin America.

Because they affect fundamental business practices, they often affect the competitive position of firms as well. The hard reality of global expansion.

By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets. Also, types of distance af- fect industries differently. Is value creation by Venture Capitalists a reality or myth? This has been one of the biggest barriers, for instance, in the way of U. Ghemawat emphasizes that different types of distance matter to different extents depending on the industry.

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Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level. Related Posts 01 Jun. The other day, a doctor was asking me about investment banking and why is it so hot.

Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links. Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions.

CAGE Distance Framework

Comment Name Email Website. 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. The cultural, administrative, geographic, and economic CAGE distance framework pajkaj managers identify and assess the impact of distance on various industries.

Pankaj Ghemawat: CAGE Comparator™

For frmework, a firm maybe most interested in markets with high consumer buying power, so it uses per capita income as the first sorting cue. Think of international expansion as a movement along a continuum from known markets to less-known markets; a firm can move pakaj more CAGE-proximate neighbors before venturing into markets that are portrayed as very different from a CAGE-framework perspective.

How far apart are trading partners in physical terms: It makes distance visible for managers. This page was last edited on 12 Septemberat 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.

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How to choose foreign countries. Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. If you know the enemy and know yourself, you need not fear the result of a hundred battles.

CAGE Distance Framework – Wikipedia

The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. Culture happens to be the first facet of CAGE, in ghrmawat of the acronym, but it also can be the most practically perplexing facet for managers. Leave a Reply Cancel reply Your email address will not be published. The complete article reference is here: Each dimension of CAGE is described below. Yhemawat offers some advice on how the CAGE Framework can help managers considering international strategies:.

A Financial Statement can be…. By contrast, similarities along these dimensions suggest great potential. Around 2, years ago, Greek philosopher Heraclitus of Ephesus had pronounced: The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting framewogk strategies. The more two countries differ across these dimensions, the riskier the target foreign market.

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. Distinct cultural differences are observed around the following dimensions: From Wikipedia, the free encyclopedia.

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