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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How far apart are trading partners in physical terms: Here is the list of the…. Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions.

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CAGE Distance Framework – Wikipedia

Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:.

By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets.

Related Posts 08 Jun. Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products. 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. 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.


How to choose foreign countries. 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.

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Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. Do you want to impress or confuse clients or Vice Versa? 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.

Because they affect fundamental business practices, they often affect the competitive position of firms as well. If you are in a Business school, invariably you will get references to Porter and theories on Business Strategies….

Pankaj Ghemawat: CAGE Comparator™

Leave a Reply Cancel reply Your email address will not be published. It makes distance visible for managers. The more two countries differ across these dimensions, the riskier the target foreign market. 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.

Whatever it is… there is no denying the fact that….

The hard reality of global expansion. Also, types of distance af- fect industries differently. Each dimension of CAGE is described below. This page was last edited on 12 Septemberat One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors.


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

The moment you feel the need to ghenawat manage someone, you have made a hiring mistake. 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.

CAGE Distance Framework

By contrast, similarities along these dimensions suggest great potential. Retrieved from ” https: Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level. The complete article reference is here: Facebook has more than million users xage makes it the 3rd largest country in the world.

Always a good reference…. The other day, a doctor was asking me about investment banking and why is it so hot. 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.