Question

REFER TO CANADIAN SOLAR CASE ... I DONT KNOW HOW TO ATTACH IT, its too long to type...

PART A:Explain the CAGE model, its components, and its usefulness in evaluating international business decisions.

PART B:For Canadian Solar, use the CAGE model to evaluate the challenges inherent in the joint venture decision.

Answer 1

answer-

1- :Explain the CAGE model, its components, and its usefulness in evaluating international business decisions.

CAGE model is a business model which helps the company to make strategic business decision to enter into international business to another country.it  identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when crafting international strategies.

COMPONENTS OF CAGE MODEL-

CULTURAL FACTOR-

it is teh first component of the cage model which decsribes the cultural differences between thr home country & foriegn country while making business decisions.this factor includes following -

• language differences
• ethinicity differences
• different religions
• different values,norms & beliefs

ADMINISTRATIVE FACTOR-

Administrative distance reflects the historical and present political and legal associations between trading partnersAdministrative factors imply bureaucracy, political structure and operating system in one country. Institutional environment highlights the impact of social values and norms that causere strictions on organizational behaviour.this includes-

• lack of common currency
• Political hostility
• Lack of colonial ties

GEOGRAPHIC FACTOR-

Geographic distance, except the actual distance between countries, implies topographic features, the size of the country, the average distance of some cities to national borders, the condition of roads and access to waterways. It also consider the access of transportation and overall communication infrastructure. Thereby, it affects the cost of transportation and induces communication and information barriers.it includes

• Differences in climates environments
• Differences in time zones
• Lack of land border
• Weak transportation or communication links
• Lack of internal navigability

ECONOMIC FACTOR-

The economic dimension concerns the economic circumstances prevailing in the country. The stated implies the underlying diversities in income, wealth distribution and the relative purchasing power Significant economic diversities between countries hamper company’s international activity. Specifically, similar gross domestic product (GDP) per capita and consumption patterns are positively correlated .in includes

• Other differences in cost or quality of natural resources, financial resources, human resources, infrastructure, information or knowledge
• Economic size
• Low per capita income

this framework is useful in making international business decisions because it helps the company to analyse the factors of other countries in which we want to operate so it provide information which can help the business to grow & use as opportunity not as threat.this framework is very useful to implement if company chooses to operate in foreign countries.the componets of CAGE model helps to know the cultrual,administrative,geographic & economic differences between the home & foreign countries & make our business decisions based on those differences.

2- For Canadian Solar, use the CAGE model to evaluate the challenges inherent in the joint venture decision.

Canadian Solar Inc. is one of the world's largest solar companies. As a leading vertically integrated provider of ingot, wafer, solar cell, solar module and other solar applications, Canadian Solar designs, manufactures and delivers solar products and solar system solutions for on-grid and off-grid use to customers worldwide joint venture is medium to do international business by joining business to foreign company just like canadian solar did but it should evaluate its business decision while making joint venture decision which can be done by CAGE model-

CULTURAL DIFFERENCE-

canadian company while entering into another country like africa or carribean to do solar panel business it should avlauate the cultural differences of that country like africans speak english thier values & beliefs are different from the canadian culture.so company should make these consideration while making joint venture decisions.

ADMINISTARATIVE DFFERENCES-

the government policies & taxes can hamper the business of solar cell as they would want thier home business company's to sell thier products in thier country.also there is differences in thier currency as compared to canadian dollars which can decrease the value of solar panel in the market of another country.

GEOGRAPHIC DIFFERENCES-

company should evaluate the geographic size, area & how to transport the products to different country or to establish a seperate plant which can be costly.so company should evaluate such factors.

ECONOMIC DIFFERENCES-

the econimic differences is the main factor to evaluate by the canadian solar panel as it would impact the business of the company if the economy of another cooutry is evry poor because no company wants to do joint venture in economically poor coountry as it would have lack of resources.

*asEA, i can answer one out of multiple questions but i tried to answer both for your help. above answer is given in my own words.hope this answer would help you.good luck & rate.