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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By contrast, similarities along these dimensions suggest great potential. The impacts of CAGE distances and differences framewrk been demonstrated quantitatively via gravity models. Related Posts 18 Jul.

Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. Leave a Reply Cancel reply Your email address will not be published.

If you know the enemy and know yourself, you need not fear the result of a hundred battles. 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. From Wikipedia, the free encyclopedia.

For example, it can help explain the framewwork of Spanish firms in many industries across Latin America. By using this site, you agree to the Terms of Use and Privacy Policy. Comment Name Email Website.


This page was last edited on 12 Septemberat The hard reality of global expansion. Distinct cultural differences are observed around the following dimensions: Frameworkk far apart are trading partners in physical terms: Because they affect fundamental business practices, they often affect the competitive position of firms as well.

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

The complete article reference is here: The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. 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.

It makes distance visible for managers. Also, types of distance af- fect industries differently. Culture happens to be the first facet of Framewrok, in terms of the acronym, but it also can be the most practically perplexing facet for managers.

Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level.

Think of international expansion as a movement along a continuum from known markets to less-known markets; a fage 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

Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. Facebook has more than million users that makes it the 3rd largest country in the world. Is value creation by Venture Capitalists a reality or myth? Retrieved from ” https: Views Read Edit View history. By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets.


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. Sir Winston Churchill — Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links.

CAGE Distance Framework – Wikipedia

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: Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. 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.