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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This has been one of the biggest barriers, for instance, in the way of U. Each dimension of CAGE is described below. 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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The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. The more two countries differ across these dimensions, the riskier the target foreign market. One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors.

How far apart are trading partners in physical terms: Retrieved from ” https: How to choose foreign countries. For example, it can help explain the strength of Spanish firms in many industries across Latin America. Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products.


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.

The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. Distinct cultural differences are observed around the following dimensions: From Wikipedia, the free encyclopedia. Comment Name Email Website. It makes distance visible 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.

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.

Because they affect fundamental business practices, they often affect the competitive position of firms as well. The other day, a doctor was asking me about investment banking and why is it so hot.

Pankaj Ghemawat: CAGE Comparator™

Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. Views Read Edit View history.

The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on frameworkk industries. The complete article reference is here: Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. 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.


The CAGE Framework – Distance Matters in Globalization!!!

Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level. By contrast, similarities along these dimensions suggest great potential. Whatever it is… there is no denying the fact that…. Around 2, years ago, Greek philosopher Heraclitus of Ephesus had pronounced: This page was last edited on 12 Septemberat 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.

CAGE Distance Framework – Wikipedia

A Financial Statement can be…. Application of the CAGE framework requires managers to identify attractive locations based on raw material costs, access to markets or consumers, or other framedork decision criteria. Related Posts 01 Jun.

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