Question

What is the central theme for "Distance Still Matters-The Hard Reality of Global Expansion" by Pankaj Ghemawat? Provide critical analysis of the 4 distances described, for example, cultural, political, geographical and economical distance. What are the weaknesses and strenghts of this summary?

Answer 1

the central theme for "Distance Still Matters-The Hard Reality of Global Expansion" by Pankaj Ghemawat is to explain the existing distances; namely cultural, political, geographical and economical distance in a country which affects the expansion of foreign markets. The investors or companies to expand their market at global level analyse demand of consumers, their income and propensity to spend etc. but they ignore the distance factor which create barriers for expansion of market.

Analysis of 4 distances :

• Cultural distance : the culture is different in every country. They differ in language, cast, race, religion etc. it affects the expansion of market as there is need to setup market according to the demands and needs of different cultures.
• Political distance: the political conditions are different at global level. Political stability and instability also affects the expansion of foreign markets in a domestic country.
• Geographical distance : different climate or weather at different places, physical distance and environmental conditions also plays an important role in setting up of a business
• Economic distance: size of the economy, income of difference among people, infrastructural development, education level and human resource etc. of a country also decides the scope of foreign markets expansion.

The weaknesses:

though the theory has no weakness as it has given a new dimensions for the expansion of foreign markets. Still there are few things which does not go in favor of the theory as it makes analysis process little complex and also these four distances are different in every country so company can’t change its policies for every single country.

Strengths :

• The theory has given a new dimension for expansion of foreign markets
• It helps in development of foreign markets more efficientl
• Helpful in fulfilling the demands of people according to the distance existing their   
• comparison of markets