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Implementation of CAGE Framework & Business Strategy for International Trade


Task: Discuss the CAGE Framework and Business Strategy


In this report, the lesson taught in each weekly session in the e-learning program has been covered. This study focuses on the learning aspects of week 3 and 5 and an in-depth analysis of the topics is presented. We have separated the report into two segments. The first segment covers the importance of strategy and its application in an organisation. In the second segment, international trade opportunities are analysed concerning the CAGE framework. The application of the learning outcomes is also presented in this case study.

Week 3: Strategy
Part 1: The strategy is defined as a set of plans which are created to achieve growth in an organisation. The strategy is, therefore, the key policy for implementing a well-designed means of achieving the goal of maximum efficiency. Through this lesson, it was noted that strategy can be applied to much more possibilities than achieving goals. By applying the right strategy an organisations’ internal procedure of working can be analysed. (Kryscynski, 2015)

In the above video, it is stated that the meaning of strategy can be understood with the help of other strategy statements, such as:

  1. Make the first move
  2. Transition to the industrial application from defence
  3. Providing the lowest price
  4. Integration of commodities of regional procurements
  5. Supreme customer Satisfaction
  6. Follow an international policy

The strategy statements which are mentioned above as well as in the e-learning lesson and the video, all promote the same organisational objective. Thus, it is observed that to effectively assess a strategy, it all strategy statements convey a similar message. Based on the above statements it can be deduced that they promote the following aspects:

  1. Strategies
  2. Aims
  3. Explanations
  4. Ideas

Although, this still is not enough to clearly define what a strategy is. (Kryscynski, 2015)

Thus, to understand the fundamental definition, the origin of the term "strategy" must be studied. It is derived from the Greek word, 'Strategos' which translates to 'Generals Art'. Which means the path which is taken by the generals to get to their destination. Whereas, in the late 2nd century BC, a famed Chinese general, Suntzu, claims that strategy is the art of war, by his ideology. According to this, ?there are only two outcomes of a task, either you will win or you will lose and everyone strives to win. ?But in a business environment, beating an organisation is not the most appropriate statement. Instead, the aim of any organisation must be to win over their competitors. Suntzu's point of view has thus been founded that strategy is the art of planning and executing war (Kryscynski, 2015). It also has to do with the winning and losing. In industry, Strategy can be termed as the method which uses the efficient route to obtain corporate advantages.

Part 2: Madsen and Walker (2015) have regarded strategy as the sequence of events and actions taken in a channel judgement. Whereas Salunke, et al. (2013), stated on the contrary that, the strategy is the mechanism of investing in the upcoming future to achieve the beneficial outcomes. Hence it could be said that a strategy lays the course for a company to achieve the objective with the possibility of maximizing profits.

The formation of strategies is a very thoughtful operation for an institution to execute. Hence, to properly administer the procedures and strategies, a company must first recognise the challenges they encountered previously to not repeat them. The major problems faced by the organisations during the implementation are – (a) absence of a competently oriented business initiative, (b) adequate business mechanisms and (c) too little staff and shareholder participation (Bharadwaj, El Sawy, Pavlou, & Venkatraman, 2013). To obtain positive outcomes within an organisation, the strategies must align with the internal laws and guidelines followed by the organisation. Therefore the strategies have to be executed in a way which will make these issues obsolete for the organisation.

There are 5 ways in which a strategy should be implemented by an organisation:

  • Observer and Adjust
  • Appealing employee
  • Strategic organisational structuring
  • Coordinated finance and expenses
  • Aligning business Opportunities

In setting business strategies, certain methods can be used. External screening is essentially the practice of cautious monitoring of the immediate surroundings for variables that might improve the performance of the company, which must be discussed in the course of formulating a plan. For example, throughout the process, you will be paying proper attention to what the competitors are doing and modifying your strategy accordingly. Consistent execution is essentially introducing aspects of the plan to be applied to perform the upcoming phases in the process of formulating the policy. The remainder of the framework of the strategy has to be changed in order.

CAGE framework strategy order.

Figure 1: Strategy Formation

WEEK 5: CAGE Framework for Evaluation of International Trade Opportunities by Pankaj Ghemawat
Part 1: CAGE framework is founded around the global economics that shows the degree to which trade is related between two countries. This lesson recognizes the social, geographical, economic and bureaucratic problems between the nations. It lets promoters identify every nation's issues before beginning to start their company. Although, it may be helpful for firms to consider the dynamics of commerce, opinions of populations, and resources to build the strategy for the position when extending the company across new borders.

The presenter in the YouTube clip explains the significance of the CAGE framework. In their views, the CAGE represents 4 elements that assess different countries' trade conditions. The CAGE is Cultural, Administrative / Political, Geographic and Economic (Management, 2015). These 4 components are the backbone of any company which can be useful to know before getting into business with another nation. From the lecture, it was observed that to get a profitable business, the speaker has to follow the framework. The presenter indicates that the CAGE system allows countries to understand not only trade-related relationships but also the other relationships as well, which will allow them to assess whether or not the exchange will be productive. In an example, the speaker stated that two developed nations, who have similar per capita income, may not be willing to get into multiple trading opportunities with each other. Thus it means that the trade relationship cannot be set at one point; instead, this relies on both countries ' economic status. This could be supported by the fact that the United States is establishing a decent trade relationship with Canada, which ranks 10th in the world in terms of economy (Management, 2015).

CAGE Framework

Figure 2: CAGE Framework

Part 2: Therefore, given that the CAGE framework is entirely predicated on global economics and the use of this strategy benefits organizations from different parts of the world, Ghemawat provides several recommendations as to how the CAGE framework may assist administrators contemplating global approaches (Moalla & Mayrhofer, 2014).

This makes it easier to identify the variations around nations which could interfere with multinational corporations concerning local competition.

This can highlight the multinationals from various countries having relative situations. E.g.: In many sectors throughout Latin America, the power of Spanish companies can be explained with the help of this.

One way of carrying out this form of statistical evaluation is to divide the total market size or possible quantities with specifically defined distance parameters. This can be helpful to assess market conditions from a company's point of view.

According to Ghemawat various kinds of separation matter at various levels, based on industries. Since physical distance has a direct impact on transportation costs, industries associated with large and bulky goods are particularly affected. On the other hand, cultural separation influences the material tastes of buyers. For a company dealing in consumer goods or a media firm, it should be a critical factor, but it is of utmost importance for the entities in the steel and cement industry.

The research examined the efficacy of the process in e-learning and evaluated two lectures. The research addressed the lesson on the business strategy subject in the first section. In this section, the meaning of strategy is found and its application and importance are stated. Pankaj Ghemawat's analysis, clarified the purpose and implementation of the CAGE model, as it was discussed in the second section. This concept is much needed for evaluation before attempting to expand any company to another country, according to the report. ?The efficient implementation of the CAGE framework was also discussed. CAGE framework and business strategy assignments are being prepared by our business assignment help experts from top universities which let us to provide you a reliable best assignment help service.

Bharadwaj, A, O. A El Sawy, P. A Pavlou, and N. Venkatraman. "Bharadwaj, A., El Sawy, O. A., Pavlou, P. A., & Venkatraman, N. (2013). Digital business strategy: toward the next generation of insights." MIS Quarterly, 2013: 471-482.

Kryscynski, David. What is Strategy? Jan 5, 2015.

Management, Carlson School of. Pankaj Ghemawat: CAGE Framework for International Trade - Global Matters. March 12, 2015.

Moalla, E., and U Mayrhofer. "How do different dimensions of distance affect market entry mode choice? An application of the CAGE-distance framework." (No. hal-01134087). (? (No. hal-01134087).), 2014.

Bhattacharyya, Som Sekhar, Sumi Jha, and Christo Fernandes. "Determinants of speed to market in the context of the emerging Indian market." Asia Pacific Journal of Marketing and Logistics 27, no. 5 (2015): 784-800.

Jayawardhana, K. and Weerawardena, J., 2014. Conceptualizing the Role of Market Learning in Social Innovation-Based Competitive Strategy.

Ghemawat, P., 2015. From International Business to Intranational Business. In Emerging Economies and Multinational Enterprises (pp. 5-28). Emerald Group Publishing Limited.

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