RESULT OBTAINED
Canonical method
Choosing between several countries: reading CAGE distance before attractiveness
What must be established
A useful analysis keeps its controls visible.
- 01
Set the home country, the sector and three to six candidate countries, on the same scope and the same horizon.
- 02
Choose for each dimension an observable factor, sourced and dated, and flag the missing data.
- 03
Separate the distances that block access from the distances that translate into a cost of adaptation.
Decision reference
Make the next choice more explicit.
DECISION SUPPORTED
Among several candidate countries, which one offers the best ratio between attractiveness and distance from your home country?
DELIVERABLE TO KEEP
A grid of countries by CAGE dimension and attractiveness, with the reading of every cell and the reasoned list of the countries set aside.
NEXT ELEMENT TO EXAMINE
AttractivenessExplore →Distance is a pair, not a property of a country
A country is not remote in itself: it is remote relative to another. Cultural distance separates two languages, two ways of buying, two relationships to the written word; administrative distance lies in trade agreements, licensing regimes, product standards and requirements of local presence; geographic distance is read in shipping times and costs rather than in kilometres; economic distance compares incomes, factor costs and distribution infrastructure. Each one is therefore measured for a pair of countries, and changes when the origin changes. That bilateral nature has a practical consequence: a grid built for a competitor, or borrowed from a general ranking, is not transferable to you. It also requires naming the origin in the very first column, attaching the sector to it, and keeping for every cell an observable factor, its source and its date. A cell without a source is not a short distance: it is missing data, and it is flagged as such.
- Pair of countries
- Named origin
- Sourced factor
- Missing data
Weighting distances according to what your offer suffers
Not every distance weighs on every offer. A product whose value lies in cultural content suffers from the gap in language and usage; a heavy, low-priced product suffers from the cost of shipping; a regulated service suffers from licensing regimes and requirements of local presence; a good whose demand depends on purchasing power suffers from the income gap. Weighting is therefore not improvised at the moment of concluding: it follows from what your offer actually suffers, and it is written down before the results are read, failing which it will be adjusted to confirm the country that was already preferred. One distinction remains more useful than a weight: the one between blocking distances and costly distances. A ban on operating, an incompatible standard or an obligation to form a joint venture close access for as long as they hold; a gap in language or in distribution channels is paid for in adaptation. The former remove a country; the latter can be costed.
- What the offer suffers
- Weighting written beforehand
- Blocking distance
- Cost of adaptation
When distance overturns the ranking by attractiveness
Attractiveness answers one question, what this market is worth, and distance answers another, what it costs to reach it from home. Merging them into a single score erases the only useful information: the gap between the two. A readable grid therefore keeps the columns separate and is read through comparisons. A country that is highly attractive but remote on a costly dimension can become less interesting than an average, nearby country, because the potential genuinely accessible shrinks once the adaptation has been paid for. A country that is attractive but blocked on one dimension is not compensated: it leaves the list for as long as the blockage holds, and the condition for re-examination is written down. The grid ends in a short decision: one or two countries kept for a deeper study, the others set aside in writing, with the reason and the signal that would reopen the case. The path of entry itself is settled elsewhere.
- Separate columns
- Accessible potential
- Gap, not average
- Country set aside in writing
DECISION ASSET
Distance grid read before attractiveness
Every candidate country is described by its four distances from the home country, then by its attractiveness, in separate columns.
Home base
- Input
- Home country and sector
- Control
- Measured from where?
- Output
- Country pair
Distance
- Input
- Observable dated factor
- Control
- Blocking or costly?
- Output
- Reading per dimension
Attractiveness
- Input
- Size, growth, margin
- Control
- What is the market worth?
- Output
- Separate column
Decision
- Input
- Gap between distance and appeal
- Control
- Which countries to rule out?
- Output
- Reasoned list
- Pankaj Ghemawat, Distance Still Matters, Harvard Business Review, 2001 (opens in a new tab)Founding article of the CAGE framework and of distance measured between two countries.
- CEPII, GeoDist database, Mayer and Zignago (opens in a new tab)Public database of bilateral distances, common language, contiguity and historical ties.
MOVE FROM ANALYSIS TO YOUR DECISION
Produce a testable decision mandate
MOVE FROM ANALYSIS TO YOUR DECISION
Produce a testable decision mandate
RETURN TO THE DECISION SYSTEM
See the canonical definition of marketing strategy→