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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A Financial Statement can be…. Landlockedness Lack of internal navigability Geographic size Geographic remoteness Weak transportation or communication links.

Pankaj Ghemawat

Retrieved from ” https: The more two countries differ across these dimensions, the riskier the target foreign market. For example, it can help explain the strength of Spanish firms in many industries across Latin America.

The hard reality of global expansion. The complete article reference is here: The other day, a doctor was asking me about investment banking and why is it so hot. Because geographic distance, for instance, affects the costs of transportation, it is of particular importance to companies dealing in heavy or bulky products. Ghemawat emphasizes that different types of distance matter to different extents depending on the industry. This page was last edited on 12 Septemberat How to choose foreign paniaj.

Distinct cultural differences are observed around the following dimensions: Around 2, years ago, Greek philosopher Heraclitus of Ephesus had pronounced: It makes distance visible for managers.

The CAGE Framework – Distance Matters in Globalization!!!

Whatever it is… there is no denying the fact that…. Related Posts 01 Jun. Leave a Reply Cancel reply Your email address will not be published.


From Wikipedia, the free encyclopedia. Also, types of distance af- fect industries differently.

CAGE Distance Framework – Wikipedia

Comment Name Email Website. Ghemawat offers fage advice on how the CAGE Framework can help managers considering international strategies:. One method to conduct quantitative analysis of this type is to discount specifically, divide raw measures of market size or potential with ghemawwat of distance, broadly defined. If you know the enemy and know yourself, you need not fear the result of a hundred battles.

Views Read Edit View history. The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. Lack of colonial ties Lack of shared regional trading bloc Lack of common currency Political hostility.

By using this site, you agree to the Terms of Use and Privacy Policy. It should gramework a crucial consideration for a consumer goods or media company, but it is much less important for a cement or steel business. Different languages Different ethnicities; lack of connective ethnic or social networks Different religions Lack of trust Different values, norms, and dispositions.

Each dimension of CAGE is described below.

Pankaj Ghemawat: Differences and the CAGE Distance Framework

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. Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level. By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable ghemwat markets.

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 impacts of CAGE distances and differences have been demonstrated quantitatively via gravity models.


One of the distinctions between the CAGE Framework and other country analysis frameworks is its inclusion of bilateral as well as unilateral factors. Because they affect fundamental business ghemaawt, they often affect the competitive position of firms as well.

By contrast, similarities along these dimensions suggest great potential. 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 table [4] [5] shown below provides more detail ftamework 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.

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. How far apart are trading partners in physical terms: The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies.

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. This has been one of the biggest barriers, for frameworkk, in the way of U.