What does the CAGE Framework analyze?

The CAGE Framework analyzes Cultural, Administrative, Geographic, and Economic distances between countries. It is used to assess and understand the potential challenges and opportunities that may arise when entering a new international market. Each component focuses on different barriers that could impact cross-border trade and business operations.

Cultural distance examines differences in language, social norms, and consumer behavior that could affect market entry strategies. Administrative distance looks at factors such as legal systems, political stability, and regulatory differences that could create obstacles to doing business. Geographic distance considers the physical distance between locations, as well as factors like transportation and logistical challenges. Economic distance evaluates disparities in income levels, purchasing power, and economic conditions that could affect demand for products or services.

This comprehensive analysis helps businesses make informed decisions regarding international expansion by identifying specific risks and advantages based on these four dimensions.