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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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Also, types of distance af- fect industries differently. Is value creation by Venture Capitalists a reality or myth? 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.

By using this site, you agree to the Terms of Use and Privacy Policy. Here is the list of the…. The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models.

Pankaj Ghemawat: Differences and the CAGE Distance Framework

Culture frameaork to be the first facet of CAGE, in terms of the acronym, but it also can be the most practically perplexing facet for managers.

Ghemawat emphasizes that different types of distance matter to gbemawat extents depending on the industry. This has been one of the biggest barriers, for instance, in the way of U. Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility.

How to choose foreign countries. For example, it can help explain the strength of Spanish firms in many industries across Latin America. By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets.


Each dimension of CAGE is described below. The hard reality of global expansion. Because geographic cag, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products.

Always a good reference…. Do you want to impress or confuse clients or Vice Versa? Distinct cultural differences are observed around the following dimensions: Views Read Edit View history.


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 Frameork perspective. Comment Name Email Website. 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.

For instance, a firm maybe most interested in markets with high consumer buying power, so it uses per capita income as ghemmawat first sorting cue. One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors. Whatever it is… there is no denying the fact that…. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting ghemawxt strategies.

This page was last edited on 12 Septemberat 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. Related Posts 08 Jun.


Pankaj Ghemawat

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

Leave a Reply Cancel reply Your email address will not be published. The complete article reference is here: Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links.

From Wikipedia, the free encyclopedia. The other day, a doctor was asking me about investment banking and why is it so hot.

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. The more two countries differ across these dimensions, the riskier the target foreign market.

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