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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The cultural, administrative, geographic, and economic CAGE distance framework helps managers identify and assess the impact of distance on various industries. The more two countries differ across these dimensions, the riskier the target foreign market. By contrast, similarities along these dimensions suggest great potential.
Also, types of distance af- fect industries differently. By analyzing the possible impact of dis- tance—in all its dimensions—you sweeten the odds of investing in profitable foreign markets. 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.
CAGE Distance Framework
For instance, a cqge maybe most interested in markets with high consumer buying power, so it uses per capita income as the first sorting cue. Think of international expansion as a movement along a continuum from known markets to less-known markets; a firm frmaework 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. 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.
Distinct fraamework differences are observed around the following dimensions: Trade practices between countries can be significantly affected by laws and regulations enacted at the national or international level. Because they affect fundamental business practices, they often affect the competitive position of firms as well.
How far apart are trading partners in physical terms: This has been one of the biggest barriers, for instance, in the way of U. How to choose foreign countries.
Pankaj Ghemawat: Differences and the CAGE Distance Framework
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