The acronym cage stands for culture, administrative, geographical, and economic. Ghemawat emphasizes that different ghemaat of distance matter to different extents depending on the industry. Friedman assumes that the world is becoming much more globally integrated. The first module of globe discusses the opportunities and challenges associated with the globalization of business enterprise. Ghemawat socalled aaa framework offers three generic approaches to global value creation. Redefining global strategy pankaj ghemawat the new. The unprecedented cage cofs not only merge the borderline of 2d and 3d cofs but also bridge porous organic cages to extended crystalline organic frameworks.
As traditional distance measures reflect differences in people preferences across countries kim and jensen, 2014. In addition, we limit our regression analysis to an established measure of distance, i. Pdf redefining global strategy crossing borders in a. Cage distance framework, a powerful strategic tool toolshero. Figure 2 covers country characteristics across all four cage dimensions. Differences and distances1 pankaj ghemawat, new york university stern school of business, usa, and iese business school, spain steven a. Ghemawat used the cage framework to propose solutions to lessening the barriers. He optimistically portrays the world as changing for the better. Pdf nowadays, international cooperation is unevenly divided among countries. It may also be used to understand patterns of trade, capital, information, and people flows. With cultural, administrative, geographic and economic data of croatia and eu candidate countries, empirical support about the impact of. This note introduces the cage distance framework, which is used to identify and prioritize the differences between countries that companies must address when developing crossborder strategies. Cage fram cultural distance different languages different ethnicities.
Cage distance framework, where cage is an acronym for cultural, administrative. The purpose of this paper is to analyze lenovos successful acquisition of ibms pc division using ghemawat s 2001 cage framework. These four factors are explained in more detail below. Country portfolio analysis, a commonly used tool by many companies when deciding on which market to enter, will be presented in this section. Pdf gravity for domestic and international alliances. How, if at all, would a merger of mittal with arcelor add value. Among the first articles in this direction, ghemawat 2001 proposes the cage framework which allows differentiating four dimensions.
Globalization, the international integration, is adapted by an organization by adapting various approaches. National cultural differences and multinational business pankaj. The cage framework the cage of distance framework can be applied in this case study of ikea in a large extends. Research comprises original datasets on distance factors within cage distance framework. Through exposure to friedmans ideas, you gain a better perspective on the forces, or flatteners, that are making crossborder business more prominent. Pankaj ghemawat, a professor at the university of navarra. It compares gdpweighted rather than simple averages to highlight differences that business practitioners encounter in the. The cage distance framework identifies cultural, administrative, geographic and economic differences or distances between countries that companies should address when crafting international strategies.
What focal country did you select which countrys exports are you going to analyze. Adaptation strategies strategies that seek to increase revenues and market share by tailoring one or more components of a firms business model to suit local requirements or preferences. Pankaj ghemawat identified this issue and has in turn proposed the cage distance framework which assesses the cultural, administrative, geographic and economic differences between the countries within an international strategy. This helps pinpoint the difference across countries that might put ikea at a relative disadvantage as compared to its local competitors. The emphasis will be on going beyond the justdoit approach to globalization to thinking about globalization moves in a way that builds onbut extends beyondyear strategy course. Distance here not only means the physical distance between. Cage distance framework, where cage is an acronym for cultural, administrative the cage framework. Begin by considering the example summarized in exhibit 21, which plots walmarts operating margin by country in. Cagerelated barriers that continue to constrain crossborder integration.
The framework can also be used to understand the patterns of capital, trade. Lynch and beck, 2001, the cage framework provides an adequate empirical test for our arguments. The final barrier in the cage framework has been economic distance, the lack of developed infrastructure in these countries. Canadian border is the worlds longest undefended border. The absolute importance of arbitrage arbitrage, of course, is the original crossborder strategy. Lenovos successful acquisition of the ibm pc division.
The cage cofs have a permanent porosity and can adsorb co2 facilitated by the intrinsic cage cavities that serve as prime adsorption sites. Cage analysis in order to assess the complexity of a proposed entry into india, the cage framework is a good starting point. Adaptation strategies seek to increase revenues and market share by tailoring one or more components of a companys business model to suit local requirements or preferences. 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. Then, the cage framework is used to unpack potential bases of arbitrage and the adding value scorecard is applied to analyze arbitrage strategies. Pankaj megawatt ghemawat is an international strategy guru who developed the cage framework the analytical framework used to understand country and regional differences along the distance dimensions of culture, administration, geography, and economics. Altman, new york university stern school of business, usa introduction a full 78% of aib members are based in advanced economies, yet our. Pankaj megawatt ghemawat is an international strategy guru who developed the cage framework to offer businesses a way to evaluate countries in terms of the distance between them. Christianity, and then most broadly combine groups of religions with a. Professor pankaj ghemawat, stern school of business, discusses the cage framework and how businesses can use it to evaluate international trade opportunities as a part of the global matters speaker series. Cage based crystalline covalent organic frameworks. International expansion and global market opportunity.
After that a discussion follows of the flaws of this tool, and a description of a more dynamic tool called the cageframework. The four dimension of distance namely cultural distance administrative and political distance, geographic distance and economic distance between the sweden and its foreign markets indicated how different is the foreign market and what. Please feel free to share your focal countrys exports map. Redefining global strategy crossing borders in a world where differences still matter. Section 1 of this note discusses cultural frameworks and value dimensions that have been used to. Trade across it accounts for the worlds largest bilateral trading relationship, still 42 the possibilities. Professor pankaj ghemawat, director of the center for the globalization of education and management at the stern school of business, discusses how having a. Santos silva and tenreyro 2011 were in line with pankaj ghemawat s cage framework when they argued that the gravity model can be extended by including variables to account for language relationships, tariffs, contiguity, access to the sea, colonial history, exchange rate regimes, and other variables of interest. One of the framework was identified by ghemawat aaa framework in. Elsewhere, a satellite tv company must wait for nielsen to install people meters. Cage framework, emerging markets, internationalization, thailand. The cage framework identifies the cultural, administrative, geographic, and economic differences between the various countries that companies should address and take care of whilst working on and crafting international strategies. Lenovos purchase of ibm in 2005 was first seen as a sign of the rapid growth and expansion of the chinese economy and its transformation away from the.
The cultural, administrative, geographic, and economic cage distance framework helps managers identify and assess the impact of distance on various industries. The hard reality of global expansion discusses the reasons and rationale that drive companies. Crossing borders in a world where differences still matter ghemawat, pankaj on. Buildi ng on the cage dista nce framework ghemawat, 2001, w e aim to revea l how the di erent t ypes of d istance divided into cult ural, admin istrat ive, geographic a nd econo. Friedman discussed the fact that the word is becoming easier to do global business in. The cage distance framework is a tool that can be used to uncover important differences between various countries that companies should take into account when deciding on their strategy. Youngresearcherssection cage analysis of china s trade. This chapter enumerates the reasons that borders still matter and classifies them in terms of the cultural, administrative, geographic, and economic distances between countries. Summary pankaj ghemawat s article, distance still matters. Their differing views help you better understand the context of international business.
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