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.
CAGE Distance Framework
Also, types of distance af- fect industries differently. A Financial Statement can be…. 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.
Views Read Edit View history. It makes distance visible for managers.
Each dimension of CAGE is described below. The other day, a doctor was asking me about investment banking and why is it so hot. The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors.
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.
Retrieved from ” https: 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.
Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions. Ghemawat emphasizes that different types of distance matter to different extents depending on the industry.
Related Posts 01 Jun. For example, it can help explain the strength of Spanish firms in many industries across Latin America. Because they affect fundamental business practices, ghemawqt often affect the competitive position of firms as well.
By contrast, similarities along these frwmework suggest great potential. 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.
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Pankaj Ghemawat: CAGE Comparator™
Think of international expansion as a movement along a continuum from known markets to less-known markets; ghemawaat firm can move to more CAGE-proximate neighbors before venturing into markets that are portrayed as very different from a CAGE-framework perspective.
Around 2, years ago, Greek philosopher Heraclitus of Ephesus had pronounced: The complete article reference is here: If you know the enemy and know yourself, you need not fear the result of a hundred battles.
From Wikipedia, the free encyclopedia. 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. Landlockedness Lack of internal navigability Geographic size Geographic fraamework Weak transportation or communication links.
The more two countries differ across these dimensions, the riskier the target foreign market. Whatever it is… there is no denying the fact that…. How far apart are trading partners in physical terms: Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:.
The table   shown below provides more detail framesork each of the Gjemawat categories, and how they can manifest cae depending on whether one is comparing a pair of countries or looking at one in isolation.