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Four Dimensions of Distance: Geographic Distance

Expanding the business in other countries is an important decision for the corporation because it will influence the corporations’ success or fail in the future. However, to expanding the business, setting up a strategy is the most important part because it is a direction or a map for the corporation to follow. A good strategy forces the company to do more analysis and research, such as analyzing the four dimensions of distance.

What does the four dimensions of distance mean?

Christopher et al say that the four dimensions of distance are four basic dimensions which are cultural, administrative, geographic, and economic. These four types of differences influence different business in different ways (66). “The CAGE distance framework helps managers identify and assess the impact of distance on various industries. The upper portions of the table lists the key attributes underlying the four dimensions of distance. The lower portion shows how they affect different products and industries” (Christopher et al, 68).

Why does it important to analysis?

According to Pankaj, to modify the differences of cultural, administrative, geographic and economic dimensions between countries “not only helps identify the key differences in particular settings; it also affords insights into differences in differences by providing a basis for distinguishing countries that are relatively close, along the key dimensions, from those that are relatively fat” (33).

What does geographic distance mean?

Doing business in another country is harder than doing business in domestic country because of many uncertainties, such as geographic. However, to identify the geographic distance could help the corporation to get more information to access the new country.

Christopher et al say that geographic distance is not only about how far away from the target country to domestic country. It also includes other attributes, such as “the physical size of the country, average within-country distances to borders, access to water ways and the ocean, and topography” (71).

Also, according to Pankaj, “the geographic attributes of countries that can affect cross-border economic activity mostly grow out of natural phenomena, although some human interventions may also be involved (44).

What kind of attributes creating geographic distance?

Christopher et al say that size of the country, natural phenomena, weak transportation, communication links, lack of sea or river access, physical remoteness and lock of a common border are the major factors that could creating geographic distance (68).