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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Pankaj Ghemawat: Differences and the CAGE Distance Framework
If you know the enemy and know yourself, you need not fear the result of a hundred battles. Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products. This has been one of the biggest barriers, for instance, in the way of U. 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.
Around 2, years ago, Greek philosopher Heraclitus of Ephesus had pronounced: The impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models. Also, types of distance af- fect industries ghe,awat.
Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions. It should be a crucial consideration czge a consumer goods or media company, but it is much less important for a cement or steel business. Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level.
Facebook has more than million users that makes it the 3rd largest country in the world. One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors. By contrast, similarities along these dimensions suggest great potential. Ghemawat emphasizes that different types of distance matter to different extents depending on the industry.
The complete article reference is here: Sir Winston Churchill — Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links.
One method to conduct quantitative analysis dage this type is to discount specifically, divide raw measures of market size or potential with measures of distance, broadly defined. The cultural, administrative, geographic, ffamework economic CAGE distance framework helps managers identify and assess the impact of distance on various industries.
Ghemawat offers some advice on how the CAGE Framework can help managers considering international strategies:. Each vage of CAGE is described below.
Whatever it is… there is no denying the fact that…. Because they affect fundamental business practices, they often affect the competitive position of firms as well. 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. How to choose foreign countries.
The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies. The more two countries differ across these dimensions, the cags the target foreign market.
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. This page was last edited on 12 Septemberat How far apart are trading partners in physical terms: Distinct cultural differences are observed around the following dimensions: Retrieved from ” https: 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.
British politician and statesman known for his leadership of the United Kingdom during the….
Related Posts 18 Jul. The hard reality of global expansion. Views Read Edit View history.
Leave a Reply Cancel reply Your email address will not be published. Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility.
The CAGE Framework – Distance Matters in Globalization!!!
From Wikipedia, the free encyclopedia. It makes distance visible for managers. Is value creation by Venture Capitalists a reality or myth? 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. The other day, a doctor was asking me about investment banking and why is it so hot.
Pankaj Ghemawat
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. Comment Name Email Website.