Looking at macro-Economic/financial factors related to market attractiveness and risks.

Calculate the level of overall attractiveness of the markets and discuss. You can also use each of the four factors construct a map should shows the relative position of your countries by these factors. Visuals are useful in showing a position. This map can be constructed using your rating data. This exercise can be developed and included in your final project and provide some insight in which markets may be more attractive. Please organize your answer using headings and appropriate grammar multiple (paragraphs) of about. Graph are encouraged. Thank you! Here is a video that talks about CAGE and an optional tool to implement.

Construct map with markets below and add visuals/ graphs

Level of overall attractiveness of the markets + visual (map)

Cage Analysis

Cultural distance

Germany

According to the CAGE comparator tool by NYU, countries that share languages are 10 times more likely to trade than countries that don't share a common language. Germany and the United States do not share a common language therefore may make it more difficult to engage in trade. Germany is the 48th closest country trading wise at 7595 km away, but has the highest statistics when it comes to GDP in 2021 and merchandise exports. I would rank this relationship a 2 (mostly dissimilar).

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10. Rate 1-5 on similarity

Administrative distance

Germany

Colonial linkage and trade agreements are very important when it comes to trade since any similarities in the markets of these two countries can improve trade by a significant amount. Germany and the United states do not share colonial linkage or have any trade agreements. Therefore I would rank this similarity a 1 (very dissimilar).

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8. Rate 1-5 on similarity

Geographic distance

Germany

Germany is 7595 km away from the United States. However if we were to distance that represents the market accessibility, this distance would increase from 7595 km to 8418 km. This represents that trade may not be easily accessible. Countries with a common border are also statistically more likely to trade by a significant amount. Unfortunately, Germany and the United States also do not share a border. I would rank their similarities in this category at a 1 (very dissimilar).

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12. Rate 1-5 on similarity

Economical distance

Germany

Germany has a decent market size, standing at 5.8% GDP. This is compared to the United States at 24%. The United States is #1 in GDP and Germany is #4. According to the CAGE comparative tool by NYU, the distance and size effects of predicted merchandise exports calculation shows the United States exporting 2.4% of world merchandise compared to Germany at 2.2%. In this category these two markets are very similar and I would rate them a 4 (mostly similar).

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12. Rate 1-5 on similarity

Cultural Distance: Italy vs United States

Criteria:

1. Language: 4 (English is widely spoken in both countries, although Italian is the primary language in Italy.)

2. Social standards:3 (There are variances in social etiquette and family structure, but there are parallels in social standards as well.)

3.Religion:3 (The religious populations of both countries are diverse, but the main religions and their social impact differ.)

4. Cultural ideals: 4 (Although attitudes toward work, play, and family are different, there are shared cultural ideals like individualism.)

5. Cuisine and Lifestyle: 5 (Notable parallels exist between the cultures of food and lifestyle, which can help with cross-cultural understanding.)

Administrative Distance: Italy vs United States

Criteria:

1. Legal System: 4 (The common law system of both nations is in place, although there are variations in the laws and practices.)

2.Government Structure: 3 (Democratic systems are in place in both nations, however the political systems and procedures vary.)

3.Bureaucratic Efficiency: 2 (People frequently believe that Italy has more bureaucratic roadblocks than the US.)

4.Policies Concerning Taxation: 3 (The tax systems of the two nations differ in terms of rates, exemptions, and compliance.)

5.Business Regulations: 3 (While labor laws and corporate governance differ, some business regulations are comparable.)

Geographic Distance: Italy vs United States

Criteria:

1. Proximity: 2. (The physical distance between Italy and the US influences logistics and transportation costs.)

2.Time Zone Differences: 1 (There are major time zone differences between Italy and the US, which affect coordination and real-time communication.)

3. Climate: 3 (The climates of the two countries are different, yet there are variances in the ranges of temperatures and patterns of the weather.)

4.Natural Resources: 3 (Differences in the natural resource endowments between the US and Italy impact trade and industry trends.)

5.Environmental Conditions: 4 (There are environmental issues in both countries, but the particular conditions differ and may have distinct effects on operations.)

Economic Distance: Italy vs United States

Criteria:

1. Financial Dimensions: 4 (The GDP of the US is substantially larger than that of Italy.)

2.GDP Per Capita: 3 (Differences in income levels and purchasing power are reflected in the GDP per capita.)

3. Income Distribution: 3 (The two nations differ in terms of wealth inequality and income distribution.)

4.Employment Rates: 3. (While employment rates fluctuate in both countries, there are differences in patterns and levels.)

5. Market Maturity: 4 (In general, the US market is more developed and diverse than Italy's.)

Cultural Distance

Australia

The largest difference between the United States and Australia regarding culture is how people interact with each other. Since culture is acquired both consciously and unconsciously, the contrast between both countries is interesting because of how similar they seem on paper. In the U.S., standing out and making oneself important is highlighted, while in Australia, most kinds of self-centered behavior are looked down upon. The special name for this is 'tall poppy syndrome'. The overall similarity rating for this category is 4.

	The United States	Australia	Rating
Language	None, though English has the status of the national language	English	5
Demographic (Median Age)	38.5 years old	37.5 years old	5
Religions (Top 4)	Protestant (46.5%), Roman Catholic (20.8%), Jewish (1.9%), Mormon (1.6%)	Protestant(23.1%), Roman Catholic (22.6%), Other Christian (4.2%), Muslim (2.6%)	4
Values	Independence, Democracy, Freedom	Freedom, Respect, Fairness, Equal Opportunity	5
Norms	Individualism, Equality, Time Consciousness	Authenticity, Sincerity, Humbleness	2

Administrative Distance

Australia

The power system in both countries is similar in many aspects. The core of both legal systems revolves around having a parliament system, a written constitution, and a judicial system that interprets the Constitution. The biggest difference between the two systems is how voting works. In Australia, it is obligatory to vote, while in the United States, voting is a nonmandatory right. Something else that the two countries have in common is a trade agreement that allows most goods to come in duty-free from either country. The overall similarity rating for this category is 4.

	The United States	Australia	Rating
Legal System	Federal Legal System (based on English common law), State Legal System (based on common law)	Common Law System based on the English model	5
Voting	Voluntary	Compulsory	2
Political Power	Constitutional the Federal Presidential Republic	Federal Parliament Democracy (under constitutional monarchy)	4
Tariffs	99% of US Origin Goods Enter Australia Duty-Free	All AUFTA (Australia Free Trade Agreement) Goods are Duty-Free	5
Relationship	Vital Ally	Vital Ally	5

Geographic Distance

Australia

Located almost on the other side of the earth, Australia's continent sits in between the Indian and South Pacific oceans. The difference in geographical location, different climates and terrains are to be expected. What makes the comparison interesting is that the United States has a wide variety of climates and terrain while Australia is fairly consistent. This is likely due to the size and location of both countries. The North American continent sits higher above the equator, while Australia is below it. Due to the differences mentioned above, the similarity rating for this category is 3.

	The United States	Australia	Rating
Physical distance	14802km	14802km	5
Geographical Size	9,525,067 km	7,741,220 km	4
Location	North America	Oceania	1
Climate	Temperate, Tropical, Arid, Semiarid, Arctic	Arid, Semiarid, Temperate, Tropical	3
Terrain	Vast Central Plain, Mountains, Broad River Valleys, Some Volcanic Topography	Low Plateau with Deserts, Fertile Plains (SE)	2

Economical Distance

Australia

The Australia-United States Free Trade Agreement (AUSFTA), put into effect in 2005, makes it easy for most goods to flow between the two countries duty-free. Based on the GDP, The United States ranks #1 while Australia ranks #14. The main difference between the two economies are the kinds of exports they provide to the rest of the world. Australia focuses on commodities such as coal and ores while the United States exports technology, and petroleum. The overall similarity rating for this category is 3.

	The United States	Australia	Rating
Agricultural Products	Milk, Wheat, Sugar Cane, Poultry, Potatoes, Cotton	Sugar Cane, Wheat, Barley, Milk, Beef, Cotton, Grapes	4
Average Individual Salary (USD)	$59,428	$73,768	3
International Agreements	Antarctic Treaty, Air Pollution (heavy metals, nitrogen oxides), Climate Change	Antarctic Treaty, Climate Change, Hazardous Wastes, Nuclear Test Ban	4
Industries	Technology Innovation, Petroleum, Steel, Motor Vehicles, Telecommunications	Mining, Industrial and Transportation Equipment, Food Processing, Chemicals, Steel	2
Resources	Coal, Copper, Lead, Uranium, Gold, Iron	Alumina, Coal, Iron Ore, Copper, Gold	4

Cultural Difference:

Japan

The cultural differences within Japan and the United States are within the rich cultural traditions and distinct social norms. The US highlights on their values of individualism, direct communiction and casual social interactions vs Japan and their emphasis on collectivism, indirect communication, and formal etiquette. In Japan, respect for authority, group harmony, and their deep roots for tradition are ingrained and reflected in rituals like bowing, gift-giving customs, and hierarchical social structures. To give a similarity rating it would receive a 2.

	The United States	Japan	Rating
Language	English	Japanese	1
Demographic (Median Age)	38.5 Years old	48.4 Years old	3
Religions	Christianity	Shinto, Buddism	2
Values	Individualism, Equality, Informality, Competitiveness	Collectivism, Respect for Authority, Group Identity, Politeness and Etiquette	3
Norms	Communication, Time Consciousness	Formality and Politeness, Punctulity	3

Administrative Difference:

Japan

The Administrative differences of the United States and Japan are that the United States follow under the common law legal system that is followed with a representative democracy. This shows how power is distributed among federal, state, and regular elections determining the policial leadership. On the other hand Japan operaates under a Civil Law legal system. This emphasizes on the codified statues and regulations. Specifically it is a parliamentary democracy that has a Prime Minister as the hed of government and a parliamentary system that influences political decision-making. The overall similarity rating I would give is a 4.

	The United States	Japan	Rating
Legal System	Common Law System, Federal and State Laws	Civil Law System, Emphasis on codified satutes	4
Voting	Representative Democracy, Regular Elections	Parliamentary Democracy, Regular Elections	4
Political Power	Sepertion of powers between executive, legislative, and judicial branches	Parliamentary system, with a Prime Minister as head of Government	3
Tariffs	Trade Policies and Agreements	Trade Policies and Agreements	5
Relationship	Individual Rights and Freedom	Group Harmony and Social cohesion	3

Geographic Difference:

Japan

The United States ans Japan have a very diverse geographic landscape, each with its own unique natural features and climates. The United States spans a vast expanse of North America being 3rd largest globally has a diverse range of ecosystems including mountains, plains, and forests, and deserts. It's varied climate ranges from arctic in Alaska to tropical in Hawaii. On the other hand Jpan is a relatively smaller island nation in East Asia characterized by mountainous terrin and temperate climate. On a similarity rating this would score a 4.

	The United States	Japan	Rating
Physical distance	10286 km	10286 km	3
Geographical Size	3rd Largest Country by Land Area	61st Largest Country by Land Area	4
Location	North America	East Asia	5
Climate	Temperate to arctic, tropical to desert	Distinct Seasons	4
Terrain	Mountains, Plains, Forests, and Deserts	Mountainous terrain with limited rable land	3

Economical Difference:

Japan

The United States and Japan are two economic powerhouses with their own distinct economic structures and characteristics. The US shows a diverse and robust economy, ranging from industries including technology, finance, healthcare, and manufacturing. Japan is an advanced economy with manufacturing, automotive, electronics, and a robotics industry. On a similarity rating this scores a 3.

	The United States	Japan	Rating
Agricultural Products	Grains, Livestock, Fruits, and Vegetables	Rice, Vegetables, Fruits, and Seafood	3
Average Individual Salary (USD)	Higher varying based on region and occupation	Lower varing on region and occupation	3
International Agreements	NAFTA, WTO	TPP, WTO	4
Industries	Technology, Finance, Healthcare, and Manufacturing	Automotive, Electronics, and Robotics	4
Resources	Oil, Coal, Natural Gases, and minerals	Limited natural resources, relies on imports for energy needs	3

CHINA

Cultural Difference:

The median is about the same between both countries, but they somewhat different in terms of language, religion, and values. Both countries share values in motivation towards achievement and success. China values power distance while the United States values individualism. The overall score is a 3.

	UNITED STATES	CHINA	RATING
Language	English	Mandarin	1
Demographic (Median Age)	38.5 years old	39.0 years old	5
Religion	Christianity	Buddhism	1
Values	Individualism, motivation towards achievement and success	Power distance, long-term orientation, motivation towards achievement and success	3
Norms	Monochronic business cultures	Moderately monochronic	3

Administrative Difference:

The legal systems between the two countries are very different. The US has a representative democracy in terms of voting while China does not. In terms of tariffs, both countries share trade policies and agreements. The overall score is a 3.

	UNITED STATES	CHINA	RATING
Legal System	Federal Legal System, State Legal System	socialist legal system with uniquely Chinese characteristics	2
Voting	Representative Democracy, Regular Elections	Elections in the People's Republic of China occur under aone-partyauthoritarian political system controlled by theChinese Communist Party (CCP).	1
Political Power	Separation of powers between executive, legislative, and judicial branches	The Chinese Communist Party (CCP)	1
Tariffs	Trade Policies and Agreements	China is a member of the WTO, imports from the United States are assessed at the MFN rate	5
Relationship	ally	ally	5

Geographic Difference:

Both countries are big in geographical size and both have different climates depending on different parts of the country. Location wise they are on opposite sides of the world. The overall score is a 4.

	UNITED STATES	CHINA	RATING
Physical Distance	11640 km	11640 km	5
Geographical Size	9,525,067 km	9.6 million square kilometers	4
Location	North America	Asia	1
Climate	Temperate, Tropical, Arid, Semiarid, Arctic	equatorial, tropical, subtropical and moderate	3
Terrain	Mountains, plains, desert, forest	mountains, high plateaus, sandy deserts, and dense forests	3

Economical Difference:

Both countries are economic powerhouses. U.S. trade with China has grown enormously in recent decades and is crucial for both countries. Today, China is one of the largest export markets for U.S. goods and services, and the United States is among the top export markets for China. This trade has helped the United States in the form of lower prices for consumers and higher profits for corporations. The overall rating is a 4.

	UNITED STATES	CHINA	RATING
Agricultural Products	Milk, Wheat, Sugar Cane, Poultry, Potatoes, Cotton	rice, wheat, potatoes, tomato, sorghum, peanuts, tea, millet, barley, cotton, oilseed, corn and soybeans	3
Average Individual Salary (USD)	Higher based on region and occupation	Lower based on region and occupation	3
International Agreements	NAFTA, WTO	PRC,WTO,	4
Industries	Technology, Finance, Healthcare, and Manufacturing	electrical and electronic machinery and equipment and clothing, textiles, and footwear	3
Resources	Oil, coal, natural gas	Oil, coal, natural gasaluminum, magnesium, antimony, salt, talc, barite, cement, coal, fluorspar, gold, graphite, iron, steel, lead, mercury, molybdenum, phosphate rock, rare earths, tin, tungsten, bismuth and zinc	4

Answer rating: 100% (QA)

Answer Here is the analysis of the overall attractiveness of the markets and a visual map constructed using the CAGE framework Level of Overall Attrac... View the full answer