Let us first understand the meaning of CAGE analysis. A CAGE
analysis helps in understanding the home market and finding the
difference between the target market in terms of culture,
administration, geography and economy. It is considered as one of
the powerful strategic tools and helps business houses in capturing
the target market by making changes in the present market.
CULTURE
- Japan is following a whole set of different culture with
Japanese as its mother tongue and Buddhism as its religion.
- Efforts are put in order to make the people learn English as
another language.
- The values norms and cultures are also different and is long
term oriented and thinks about the future outcomes.
- In Japan the people are considered as the tools to reach to
higher levels of productivity.
ADMINISTRATIVE
- Japan is a democratic administration and enjoys the power of
democracy.
- The legal framework of Japan is strict as the firm's liability
is more towards the stakeholders it deals with and accountability
is high.
- The government involvement is very high while running the
administration and decisions are taken in collaboration with
government.
- Various kinds of import tariffs are imposed on to the ones who
are involved in conducting business with Japan.
GEOGRAPHIC
- The country face physical remoteness from other nations and is
difficult to reach to conduct the business in its local
market.
- The local supervisions is quite intense and hence makes it
difficult to trade with in the market.
- There is lack of internal navigability, hence make it difficult
to conduct the business within terms of transportation.
- Surrounded by North Pacific ocean and contains thousands of
islands, hence is more prone to natural disasters.
ECONOMY
- The economy is labor intensive and sensitive in taking any kind
of risks in the long run.
- There are differences in the quality and cost of the natural
resources, financial resources as well as human resources.
- Advantage can be taken from economic view point as it is
flourishing and being a part of prosperous economy adds on to the
business.
- The level of unemployment is not that high, hence running a
business can be an easy task with more labor availability.
- Japan is involved in export of electronic equipments,
telecommunications and hence making a strong base for carrying out
business.