First, to create an advantage, a firm must configure itself to do something unique and valuable. The country of origin matters even for capital, which is often considered stateless. Reading overview aaa triangle aggregation adaptation arbitrage the aaa triangle allows managers to base their global strategy on its predominant type of business expense. Borders still matter, according to pankaj ghemawat, author of world 3. Usual suspects such as ibm and unilever, of course, are aggressively. The framework was developed by pankaj ghemawat, a professor at the. But more executive diversity at the top is sorely needed and will require sweeping. Distance still matters by pankaj ghemawat pdf download, task force black book download 1cc1596b1f strategy. Summary pankaj ghemawats article, distance still matters. An international company should pay attention to the macro environment which means. Environmental education resources to commemorate earth days 50th anniversary. As summarized in table the cage framework, the cage cultural. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext.
In this work, ghemawat proposes the cage distance framework that allows firms to consider four dimensions of international distance cultural, administrative, geographic, and economic when planning global expansion. Still matters the hard reality of global expansion. The 10% presumption while there is more investment in the world now than there has been when opportunities werent as prevalent, the fact of the matter is that 90% of the fixed investment all around the world is still very domesticated, never reaching lower than 80%. Ghemawat, harvard business school 2010 peachpit press format online supplement. I remember, i decided to write my why the world isnt flat article, because i was being interviewed on tv in mumbai, and the interviewers first question to me was, professor ghemawat, why do you still believe that the world is round. The rooted cosmopolitan corporation will be an active foreign investor across many locations but will pay careful attention to the cultural, political, and economic impact of its investment decisions. Pankaj ghemawat is the jaime and josefina chua tiampo professor of business ad ministration at harvard business school. Know the reasons why cage analysis emphasizes distance. Competition and business strategy in historical perspective. Most of these costs and risks result from the barriers created by distance. Companies routinely overestimate the attractiveness of foreign markets. Distance still matters 3 ghemawat p distance still. The cage distance framework identifies cultural, administrative, geographic and economic.
Seduced by market size, the illusion of a borderless, flat world, and the allure of similarities, firms launch onesizefitsall strategies. Pankaj ghemawat born september 30, 1959 is an indianamerican economist, professor, global strategist, speaker and author known for his work in the study of globalization. Ghemawat socalled aaa framework offers three generic approaches to global value creation. Use the a strategy that best meets your companies needs. The hard reality of global expansion discusses the reasons and rationale that drive companies. Pankaj ghemawat pdf professor ghemawat devised the renowned dhl global connectedness. I received this book from the publishers and set it aside for a while. The hard reality of global expansion hbr bestseller. Please accept our apologies for any inconvenience this may cause. Heres a more rational approach to evaluating global opportunities.
But that doesnt mean there arent great opportunities to do business abroad. Managing differences is the central challenge in hr global strategy. The articles discusses the reasons that make companies overestimate potential profits in foreign markets. Its with this mindset that i picked up the latest book from my reading pile, world 3. Pankaj ghemawat coined a new phrase in his talk from tedglobal.
The hard reality of global expansion crc press book by focusing on national wealth, consumer income, and peoples propensity to consume, cpa emphasizes potential sales, ignoring the costs and risks of doing business in a new market. The dhl global connectedness index, now in its third edition, shows that not all flows of trade, capital, information, and people are alike. Despite the recent emerging market slowdown, the imf still projects these economies. Ghemawat emphasizes that different types of distance matter to different. Strategists pankaj ghemawat and jan rivkin appear in the hbr february 2006 edition. Cpd consists of any educational activity which helps to ghemawa and develop knowledge, problemsolving, and technical skills with the aim to provide better health care through higher standards. Despite globalization, the vast majority of the worlds largest corporations are run by ceos native to the country in which the company is headquartered. In this thesis we study if swedish mncs consider the factors suggested in the cageframework when evaluating emerging markets. Distance still matters summary ghemawat p2001 september. Distance still matters by pankaj ghemawat pdf download. In this work, ghemawat proposes the cage distance framework that allows firms to. An analysis of pankaj ghemawats distance still matters. It and global communications areshrinking the world, turning it into a small and relatively homogeneousplace. Friedman assumes that the world is becoming much more globally integrated.
Global prosperity and how to achieve it as want to read. The hard reality of global expansion 12 further reading a list of related. In order to prove this point, ghemawat provides interesting data to prove that crossborder flows. With the study guides and notes written by fellow students, you are guaranteed to be properly prepared for your exams. Recall though, that any international expansion strategy still needs to be supported by the specific resources and capabilities possessed by the firm, regardless of. And though merger waves can push the ratio higher, it has never reached 20 per. An analysis of pankaj ghemawats distance still matters the hard. Step by systematic step, ghemawat provides managers with the tools and techniques they need to improve the quality of the choices that they make. Dazzled by the sheer size of untapped markets, they lose sight of the difficulties of pioneering new, often very different territories. Instructors manual download only for modern graphics communications. Ghemawats view is too much focused on integration while he should mention some others importants aspect of globalisation. Crossing borders in a world where differences still matter, pankaj ghemawat, harvard business school press, 2.
One of these researchers is pankaj ghemawat, who has developed a framework called cage which is supposed to be a complementary tool to the country portfolio analysis model. The diagnosis of semiglobaliza tion does more than just supply a relatively stable frame of reference for thinking about the environment of crossborder operations. The author points out that four distances, cultural, administrative and political, geographic, and economic are causing difficulties in expanding business in different countries. Youngresearcherssection cage analysis of china s trade. Does distance still matter in intraeuropean partnerships. He optimistically portrays the world as changing for the better.
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. Its a notion ghemawat says was first floated in the 1850s by david livingston, the scottish explorer who traveled the. In it, they examine why large differences in economic performance exist, and how competitive advantage may be created. Why do so many global strategies faildespite companies powerful brands and other bordercrossing advantages.
In other words, ghemawat takes issue with the idea that national borders are eroding and that we are all just living in one world. Heres a more rational approach to by pankaj ghemawat evaluating global opportunities. Semiglobalization and international business strategy. 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. Friedman discussed the fact that the word is becoming easier to do global business in. Tool kit companies routinely exaggerate the attractiveness of foreign markets, and that distance still matters can lead to expensive the hard reality of global expansion mistakes. Ghemawats commitment makes recent results in gametheoretic industrial organization accessible and useful to practitioners in the field of strategic management.
He stressed that international trade will still occur between two. Ghemawat 2001 calls this effect the law of distance, and argues that distance continues to dampen international business activities. The hard reality of global expansion by pankaj ghemawat. I think ghemawats theory on strategy of internationals companies is too much based on countries profiles. Distance still matters, and companies must explicitly and thoroughly account for it when. The cage distance framework identifies cultural, administrative, geographic and economic differences or distances between countries that companies should address when defining international hr strategies. In this article, pankaj ghemawat presents a new framework that encompasses all three. Estern companies interest in emerging markets especially china and india, is reaching a new level of intensity. Differences still matter, pankaj ghemawat, harvard business school press.
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