Going global doesn’t mean what it used to: Here’s how we’re rethinking it

The traditional notion of "going global" has evolved, and companies are now reevaluating their approach to expansion. For many years, the strategy focused on entering nearby markets with similar characteristics, such as the Philippines, Indonesia, and Vietnam. However, in recent years, a new market has emerged as a primary focus: Mexico. This shift in strategy is not due to a change in the map, but rather a rethinking of what it means to go global in today's interconnected world.

The CAGE Distance Framework, introduced by strategy professor Pankaj Ghemawat, has become a crucial tool in this reevaluation. The framework considers four key dimensions: cultural, administrative, geographic, and economic distance. While Mexico is distant in geographic terms, it scores well in cultural, administrative, and economic distance compared to its neighbors.

This is due to historical connections, such as the Manila-Acapulco galleon trade, which led to shared cultural and legal traditions between Mexico and the Philippines.

Ghemawat's framework helps companies assess whether a market will remain accessible and relevant in the future, not just in terms of immediate demand but also in terms of long-term accessibility. By applying this framework, companies can make more informed decisions about market entry, considering factors beyond just geographic proximity. This shift in approach reflects the changing landscape of global markets, where political, regulatory, and economic factors play a significant role in determining a market's viability.