d) The CAGE framework a checklist for forecasting political, economic, strategic or technological factors. Table 9.5 illustrates the process. Adaptation strategies Strategies that seek to increase revenues and market share by tailoring one or more components of a firm’s business model to suit local requirements or preferences. For instance, many countries suffered under the domination of imperial rule during colonial times with effects that are evident in their contemporary culture and influencing national relationships. This cage is supported by a rigid framework made by bamboo, wood, metal and set in sheltered portion of reservoirs, lakes, rivers, and estuaries. The political factors affecting fast food industry can vary from country to country. The greater the distance or difference, the more risk exists and the less opportunity there is for success. The fourth and last aspect of the CAGE analysis talks about the differences between the countries relating to income, the purchasing power of the target market, distribution of wealth, and disposable income levels. The application and working of CAGE Framework help the company to identify the attractive and lucrative international markets based on the raw material costs, easy access to target markets and consumers, access to potential human resources, and other such crucial business criteria’s. For example, Haiti is physically close to the US, but its lack of adequate port facilities make it a poor target for outsourcing manufacturing. Food industry accounts for 2% of European GDP and 13.5% of total employment in EU manufacturing sector (Federalimentare, 2012). Each component present different challenges and opportunities. The analysis of the CAGE Framework helps the company to identify the odds and gaps and thereby invest in the profitable foreign markets. It helps to determine whether the relationship or association between the native country of the company and the particular international country will favor the business operations and the international expansion strategy or will act as an obstacle. To apply the CAGE framework, identify locations that offer low raw material costs, access to markets or consumers, or other key decision criteria. The CAGE Comparator™ analysis tool examines international flows and helps identify untapped opportunities for companies and countries. Your email address will not be published. It harps on the fact that how the individuals living in the social value the individualistic behaviors as opposed and compared to the collective ones. Describe about the Business Strategy for CAGE Framework. Another tool to assist in this evaluation is the CAGE framework. Understanding the distance between the home country and the target country as it relates to differences in culture, administrative functions, geographic barriers, and economic disparities will assist the firm in making the best decision. The popularity of fast food does not cease increasing. You might, for instance, determine that you’re interested in markets with strong consumer buying power, so you would use … The history of relationships between nations provides one source of explanation for the closeness (similarity) or distance (difference) between cultures. https://opentext.wsu.edu/mktg360/chapter/6-3-selecting-target-markets-and-target-market-strategies, Next: 9.4 Types of International Strategies, Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. The Geographic distance determines the physical aspect of distance between the two countries such as the size of the country, the nature of transportation and information, climatic conditions, and more. Apart fro… I am a serial entrepreneur & I created Marketing91 because I wanted my readers to stay ahead in this hectic business world. Therefore, history provides a partial insight into cultural distance. Different laws between countries can make compliance and doing business more difficult. Fast Food Industry PESTEL Analysis. CAGE Framework for International Trade-Global Matters [02:24]. It also helps to identify the current range of products that are best suited and easily transplantable to the foreign markets at a minimum cost. The four CAGE dimensions are: Cultural Distance. Core principles of international marketing [Pressbooks edition]. It helps the company to compare markets from the perspective of profits and how lucrative the particular international market will be. For example, as a former colony of Great Britain, there is a smaller cultural distance between the US and the United Kingdom than there is between the US and Spain. CAGE Framework: Although the CAGE Framework is primarily used to identify Cultural, Administrative, Geographic and Economic differences between countries for crafting international strategies, I believe that I can adapt it to understand the global nature of retailers in the United States. Within the hierarchy and organizational structure of the firm, it signifies the distance to which the individuals accept the inequalities of various forms between the subordinates and superiors. The paper formulates a model that simplifies the layout planning process for the food processing facilities (FPF) in order to help the designers. Chapter 8: Selecting Corporate-Level Strategies, 8.6 Portfolio Planning and Corporate-Level Strategy, IX. It also harps of the geographic distance between the two countries in terms of miles or kilometers that separates the company from the target market or suppliers. You might, for instance, determine that you’re interested in markets with strong consumer buying power, so you would use … I love writing about the latest in marketing & advertising. However, the factors of the internet, social media, and technology have shrunk the distance of transportation time and now with the facility of digital products and services, the constraint of geographic distance has been almost eliminated. Geographic Distance: The literal physical distance between the home and target country are a key consideration of this dimension. The framework can also be used to understand the patterns of capital, trade, the flow of people, and information that work as crucial factors for the organization. The report is covering the weekly session of the classes on e learning and has discussed the lessons taught in e learning (Clark and Mayer 2016). Once fully recognized, the industry-led scheme can be accepted as a model system and factored into CFIA risk oversight. c) The CAGE framework is a broad framework to help managers understand the environment in which their business operates. As a fast food restaurant, economic changes have a large effect on the profitability of Chipotle. Chapter 4: Evaluating the Internal Environment, 4.4 Intellectual Property & Isolating Mechanisms, V. Chapter 5: Synthesis of Strategic Issues and Analysis, VI. It is invisible in nature but it has a huge impact on the values and behaviors of the people of the country that affects the international strategy and sales of the firm. So, scratch those brownie points. Tesla wants to explore going into Europe or South America, and has narrowed down the countries to Germany or Chile. It can work as one of the biggest obstacles for the company to expand its business operations on the international level in particular countries. The ease of communication between countries is another. When relating globalization to the CAGE framework, the analysis is structured around four types of activities for which cross-border integration is evaluated, and importance is placed on (1 ) Products (and Services) Trade and (2 ) FDI and other Capital Flows, and emphasis is also given to cross-border flows of (3 ) People and (4 ) Information. This helps pinpoint the difference across countries that might put IKEA at a relative disadvantage as compared to its local competitors. It helps the companies to have an easy access to risks involved, potential possibilities of growth and barriers of the different international markets. Required fields are marked *, Copyright © 2020 Marketing91 All Rights Reserved, Subscribe to our channel on Youtube (Daily 3 videos), Not found what you are looking for? CC BY NC SA 3.0. Analysis of each facet of the Frameworks : Thank you for reading our article about distance framework. d) The CAGE framework a checklist for forecasting political, economic, strategic or technological factors. Geographic Distance. Adaptation strategies Strategies that seek to increase revenues and market share by tailoring one or more components of a firm’s business model to suit local requirements or preferences. For example, in some countries, laws governing contract compliance are not enforced. The food processing industry is a subset of the manufacturing sector with unique challenges. Chapter 1: Mastering Strategy: Art and Science, 1.3 Intended, Emergent, and Realized Strategies, 1.5 Contemporary Critique of Strategic Management, 1.6 Understanding the Strategic Management Process, II. As a result, aftermath the identification of the countries with the common market environment, the companies are able to develop the unique bundle of products and service offerings best suited to the local market conditions and structures of the identified countries. The impacts of the distances and differences figured out by the CAGE Framework between the countries have been demonstrated in a quantitative manner via gravity models. Mariadoss, B. J. Once there, you may also find additional versions of the framework including previous releases, the Excel version, and alternative languages where available. Outdated or incomplete food laws and regulations Absence of a national food control strategy, poorly defined and overlapping mandates among agencies involved Limited infrastructure, equipment, supplies, skilled personnel Inadequate scientific and technical resources for food inspection and compliance Carlson School of Management. Hence, designers have to overcome such challenges when designing facilities suitable for food processing. Behind it is the consumers’ love for fast food. It helps the countries to develop the new type of products and services that help in venturing into the global markets in an efficient and effective manner. Countries like India, Taiwan, Malaysia, Thailand are all lagging behind China. Your email address will not be published. Chapter 9: Competing in International Markets, 9.2 Advantages and Disadvantages of Competing in International Markets, 9.5 Drivers of Success and Failure When Competing in International Markets, 9.6 Options for Competing in International Markets, X. Therefore, the country with the lower score is the better choice. Ghemawat so-called AAA framework offers three generic approaches to global value creation. October 21, 2020 By Hitesh Bhasin Tagged With: Marketing strategy articles. The minimum wage standards can differ from country to country. ), but other nations may not. The CAGE framework (Mariadoss, 2017) helps a firm gauge the distance that the target country is from the firm’s home country on four dimensions. This facet of the CAGE analysis harps on the aspect of the historical and present legal and political association between the two countries. What is the 5S System Framework in Management? Here's why. The purpose of the program is to provide a framework to support industry-led food safety systems in order to maintain the confidence of FPT governments, Canadian consumers and Canada's trading partners. CAGE Framework was developed by Pankaj Ghemawat, the renowned professor of Global Strategy at the University of Navarra- IESE Business School in Barcelona, Spain. https://youtu.be/7FpUJaG7uMk. When looking to expand our business into the foreign markets, any differences that arise are termed as the cultural differences between the two countries. Globally, the fast food brands have to comply with these requirements. Interbody Fusion Cage Market - Startup companies Scenario Premium 4.1 Top 10 startup company Analysis by 4.1.1 Investment 4.1.2 Revenue 4.1.3 Market Shares 4.1.4 Market Size and Application Analysis 4.1.5 Venture Capital and Funding Scenario 5. The video for this lesson discusses the CAGE framework and how it can be used to evaluate international trade opportunities. It is estimated that the digital printing industry will be worth $187.7 billion by 2018, which means it has a annual growth rate of 7,4%. In countries where wage rates are higher, costs of labor are also high. You might, for instance, determine that you're interested in markets with strong consumer buying power, so you would use … Cultural distance is the first and foremost facet of the CAGE analysis and it is also one of the most perplexing ones for the management of the company. Chapter 11: Leading an Ethical Organization: Corporate Governance, Corporate Ethics, and Social Responsibility, 11.4 Corporate Ethics and Social Responsibility, 11.5 Contemporary Questions of Corporate Ethics. 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. Also, labor laws can be quite different among nations.
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