Growth because that businesses often method expanding into different geographic territories. It can seem scary, an overwhelming and full of challenges, and while that might be true, it can also be highly successful, enjoyable and also be a key part of your growth.

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So is a new country or an ar an chance or a threat?

We’re going to assume you’ve completed your external Analysis, definition you’re aware of the current environment you run in and also have possibly selected a brand-new market to enter. The following step is to start thinking about the factors of your new market.

And this is whereby the CAGE Distance structure can yes, really help….

What is the CAGE distance framework?

The CAGE Distance frame is a frame to catch essential information you require to think about when entering a brand-new market and also highlight how big a difference there is in between what you currently do and what you will have to do. Frequently it’s a geographic market, however it can also apply come entering a various industry.

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The CAGE Distance frame is based about 4 pillars:

Cultural differenceAdministrative differenceGeographic differenceEconomic difference

There are many examples of suppliers going into different markets and also failing (see Nokia’s method to the united state in the 2000s) therefore the CAGE Distance frame can it is in a yes, really effective method to ensure industries are analysed correctly. The more thought that’s put right into the differences, the an ext companies deserve to tailor, tweak and also optimise their products and also services for the greatest success.

Ultimately, it’s a frame to help international growth happen quicker!

What are some example cultural differences in a CAGE distance framework?

Cultural distinctions can be really impactful and also they room present across all nations – even ones the seem very similar, ones the speak the same language, or re-publishing the same history, deserve to all have actually a multitude that different cultural attributes you must consider.

The social differences uncovered in a CAGE Distance frame include:

Different languages and also dialectsDifferent ethnicities and networksDifferent id systems and religionsDifferent online behaviour such together social networks or find enginesDifferent values and social normsDifferent attitudes on issues

It’s essential to take into consideration how your own country is regarded within the industry too, and what influence that will have on your sector entry. Don’t disregard culture!

What space some example bureaucratic differences in a CAGE distance framework?

While often considered, the true impact of administrative details is not always realised as soon as a service enters a brand-new market. There is a lot to consider and also early sight of these issues will conserve a lot of time (and margin!).

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The bureaucratic differences uncovered in a CAGE Distance framework include:

Colonial tiesTrade agreements & policiesCurrency differencesPolitical situation

Tip: express to elements of her PESTLE analysis for this area in particular.

What are instance geographic distinctions in a CAGE distance framework?

The geographic distinctions are frequently the easiest to identify. The the first aspect management teams conider and includes the tangible, physics differences between the two countries. The geographic differences found in a CAGE Distance structure include:

Physical distance between home nation and new market countryBorder structure (land or sea)Timezone differencesClimateDisease differencesPhysical dimension of country and also location of significant citiesTransport and also communication ease

This area has tendency to be the most basic to deal with with technology, however one that needs still thought and planning.

What are example economic differences in a CAGE distance framework?

Clearly the economic differences will influence your success, and also can have vast ranging after-effects on her pricing, uptake and also margins. Nations differ so drastically in economic differences so it’s an essential to consider. The economic differences in a CAGE Distance framework include:

Country resourcesRich and poor social dividesInfrastructureAverage income levels and also country wealth

What room the benefits of the CAGE street framework?

CAGE street is a good framework to help plan entry to a industry because:

It forces consideration on a wide variety of concerns that can influence youIt enables discussion to take advantage of the differencesIt’s considerable in the categoriesIt functions for all nations / marketsIt offers a clear look in ~ practicalities of beginning a geographic market

What are some of the limitations of CAGE street framework?

The main limitations are:

It concentrates on your entry and isn’t beneficial to deciding sector sizeIt needs a many research ~ above the market so is not a quick framework come useIdeally you’d have a nation expert in her sessionIt’s concentrated on the country and not the sector or market

What tools job-related well v the CAGE street framework?

The CAGE structure works well with Porter’s five Forces as a method for complete evaluation the a geographic marketplace and also PESTLE.

Who developed the CAGE distance framework?

The CAGE Distance structure was created by Pankaj Ghemawat, lobal Professor that Management and also Strategy and Director that the facility for the Globalization of Education and Management at the Stern institution of organization at brand-new York University, and also the Anselmo Rubiralta Professor of global Strategy in ~ IESE organization School – he knows his stuff!