INSTRUCTIONS: Please RESPOND to this answer from the Point of view as a student. Use credible sources and respond as if you are a manager of a marketing agency. Tell this student what your marketing agency would think of each of these answers from a Management perspective in about 4-5 paragraphs:
“CAGE Framework (culture, administrative, geographic, and economic) provides you with another way of thinking about location and the opportunities and concomitant risks associated with global arbitrage,” (Carpenter and Sanders, 2008, p. 210). This type of analysis is particularly useful for managers, as they can see where international are particularly ripe or sour. Simply because a CAGE framework shows greater distance in a particular country does not mean that an organization should not pursue business there, but there must be steps made in order to mitigate those distances. “Application of the CAGE framework requires managers to identify attractive locations based on raw material costs, access to markets or consumers, or other key decision criteria,” (Carpenter and Sanders, 2008, p. 211).
Currently, Northrop Grumman (NG) has had a business relationship with Australia that spans 20 years that also has a physical presence in Australia as well.
·Cultural: NG and Australia both share common languages and somewhat similar social norms. The ethnicities of Australians vs. Americans (headquarters of NG) is not too different and they can easily connect through social networks. There is little cultural distance.
·Administrative: The aerospace industry is affected by distance between Australia and NG, as there is the presence of national champions and they are also vital to national security. However, there are no links of colonial ties between Australia and the US and there is no political hostility. There is little administrative distance.
·Geographic: The US is approximately 9,000 miles away from Australia, which is relatively far away. There are no common borders and the primary access from US to Australia would be by plane and/or ship. There are strong communication and transportation links between the two counties. There is a relatively medium distance between US and Australia, although it is bordering a high distance due to its remoteness from the rest of the world.
·Economic: Australia has an abundant amount of natural resources, strong infrastructure, high amount of human resources, and a large amount of information or knowledge. There is little to medium economic distance.
CAGE Framework does help identify attractive locations, however, simply because a location is unattractive according to the framework does not mean that a company should not pursue conducting business there. It means that a company should adequately prepare and strategize to mitigate that unattractiveness, or large distance.
Carpenter, M., & Sanders, W. (2008). Strategic management: A dynamic perspective–integrated StratSim simulation experience. Upper Saddle River, NJ: Pearson/Prentice Hall.