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Differences Across Countries

This document discusses differences across countries using the CAGE framework. CAGE stands for Cultural, Administrative, Geographic, and Economic differences. It analyzes examples like Google in Russia, Walmart's operations in other countries, and compares India and China from a US perspective. The CAGE framework can also be applied at the industry level when examining cultural, administrative, geographic, and economic distances between countries for specific industries. The framework helps assess challenges of operating in foreign countries and identify natural owners in different markets.

Uploaded by

Rahul Jain
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd

Topics covered

  • CAGE Framework,
  • International Relations,
  • Cultural Sensitivity,
  • Consumer Behavior,
  • India vs China,
  • Cultural Insights,
  • Trade Models,
  • Tariffs,
  • Economic Indicators,
  • Economic Integration
90 views16 pages

Differences Across Countries

This document discusses differences across countries using the CAGE framework. CAGE stands for Cultural, Administrative, Geographic, and Economic differences. It analyzes examples like Google in Russia, Walmart's operations in other countries, and compares India and China from a US perspective. The CAGE framework can also be applied at the industry level when examining cultural, administrative, geographic, and economic distances between countries for specific industries. The framework helps assess challenges of operating in foreign countries and identify natural owners in different markets.

Uploaded by

Rahul Jain
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Topics covered

  • CAGE Framework,
  • International Relations,
  • Cultural Sensitivity,
  • Consumer Behavior,
  • India vs China,
  • Cultural Insights,
  • Trade Models,
  • Tariffs,
  • Economic Indicators,
  • Economic Integration

Differences across countries

Presented by : Group 8

There are no foreign lands. It is the traveler only who is foreign. - Robert Louis Stevenson

CAGE

Cultural Administrative Geographical Economic

Google in Russia
C relatively difficult language A differences in administrative and policy framework G - trouble adapting and setting up offices

E underdevelopment of payment infrastructure.

Wal-Mart

C - Language (Canada & UK) A - Free Trade Agreement (Canada & Mexico) G - Geographically close capital cities E Tough task in poor countries.

Gravity Models
Trade between two countries - Directly proportional to economic sizes
- Inversely proportional physical distance between them

Framework for Country Analysis


Unilateral attributes Finance, Technology, Labor, Management Multilateral attributes Tariffs, Hidden import barriers

The CAGE Framework at the Country Level

Cultural Distance Administrative Distance


Country-pairs (bilateral) - Languages - Ethnicities - Religions - Lack of colonial ties - Lack of common currency - Political hostility

Geographic Distance
- Physical distance - Lack of land border - Differences in time zones - Land locked geography - Weak transportation & communication links

Economic Distance
- Rich-poor differences - Differences in cost or quality of natural resources, human resources etc - Economic size - Low Per-CapitaIncome

Countries (unilateral or multilateral)

- Insularity - Traditionalism

- Non market or closed economy - Weak institutions; corruption

Example: India Versus China from a U.S. Perspective

Cultural Distance Administrative Distance


India - English language - Westernized elites - Common colonizer - Common law - Political friendship

Geographic Distance
- Physical distance - Lack of land border - Differences in time zones

Economic Distance
- Specialized labor - Profitability - Firm Strategy & upgrading

China

- Linguistic & ethnic homogeneity - Diaspora

- Ease of doing business - Enclaves

- Closed to US west coast - East Asian production network

- Large market - Higher income - Labor input & productivity

The CAGE Framework at the Industry Level

Cultural Distance
Products have high linguistic content (TV programs) Products matter to cultural or national identity (food) Product features vary in terms of Size, Standards Products carry country-specific quality associations (wines)

Administrative Distance
Producers of staple goods (electricity) Producers of other entitlements (drugs) Large employers (farming) Large suppliers to government (mass transportation)

Geographic Distance
Products have a low value to weight or value to bulk ratio (cement) Products are fragile & perishable (glass, fruits)

Economic Distance
The nature of demand varies with income level (cars) The economics of standardization or scale are limited (cement) Distribution or business systems are different (insurance) Companies need to be responsive and agile (home appliances)

Applications

Making differences visible Understand the liability of foreignness Assessing natural owners and comparing foreign competitors Discounting by distance

Conclusion

Global generalizations Semiglobalization

Thank you

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