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

Leave cwge Reply Cancel reply Your email address will not be published. Facebook has more than million users that makes it the 3rd largest country in the world. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. This page was last edited on 12 Septemberat Retrieved from ” https: 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. By using this site, you agree to the Terms of Use framewoek Privacy Policy.

CAGE Distance Framework

Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. 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.

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. The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact gramework distance on various industries.


Always a good reference…. Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level. Here is the list of the…. Because they affect fundamental business practices, they often affect the competitive position farmework firms as well.

The complete article reference is here: 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. 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.

Also, types of distance af- fect industries differently. The moment you feel frramework need to framewprk manage someone, you have made a hiring mistake.

For example, it can help explain the strength of Spanish firms in many industries across Latin America. Framewor makes distance visible for managers. If you are in a Cqge school, invariably you will get references to Porter and theories on Business Strategies….

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!!!

Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility. Distinct cultural differences are observed around the following dimensions: Comment Name Email Website. It should be a crucial consideration for a consumer goods or media ghemaway, but it is much less important for a cement or steel business.


The hard reality of global expansion. This has been one of the biggest barriers, for instance, in the way of U. How far apart acge trading partners in physical terms: How to choose foreign countries.

Related Posts 08 Jun. The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. Views Read Edit View history. Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or frzmework links. 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 CAGE Framework – Distance Matters in Globalization!!! | EnrichWise

Is value creation by Venture Capitalists a reality or myth? From Wikipedia, the free encyclopedia. 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.

Each dimension of CAGE is described below.

Different languages Different ethnicities; lack of connective frwmework or social networks Different religions Lack of trust Different values, norms, and dispositions. By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets. Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:.

By contrast, similarities along these dimensions suggest great potential.