Part I: CAGE Framework with Diagram

I have decided to analyze the United Kingdom with respect to Ireland. Qualtrics already has an
office in Ireland and is interested in expanding its presence in the EMEA region. As per Exhibit 3
in the case file, based on the factors Qualtrics is considering, the United Kingdom is an
attractive option. I want to use the CASE framework to decide if the UK is indeed an attractive
market for expansion.

Cultural: Short

Economic: Short
Administrative: CAGE
Medium Distances

Geographic: Short

My reasoning:
Cultural Distance: Short because the two countries do not have many differences concerning
their languages, ethnicities, religions, and social norms.
 Languages: English is an official of Ireland and the most common language in Dublin. The
United Kingdom also has English as the official language. There are some differences in
the accents and usage of words. However, citizens from both countries can easily use
the language for communication with each other. 
 Ethnicities and Religions: They don’t play a role in the case of software companies.
  Social norms: Some are similar, and others are different. Qualtrics can comfortably
accommodate some variations that might be required.
Administrative and Political Distance: Medium, as per my analysis.
 International Relations: The two countries have a complicated history. The relations are
overall good. There are no challenges in software trade between these two countries.
 Monetary Association: The currencies are different in these two countries, which
increases the distance. 
 Political Association: There are several shared political associations between the UK and
Ireland, which decreases the political distance.
 Political hostility: No evidence of any political hostility
 Institutional weakness: Legal and financial institutions are strong in both countries
Geographic Distance: Short due to the following reasons
 They are physically close to each other
 There is a common border between the Republic of Ireland and Northern Ireland.
(Northern Ireland is part of UK)
 They have sea access to each other.
 Transportation and communication links are strong.
 The climates are not very different, which reduces distance.
Economic Distance: Short
 Consumer income: Very little difference as per the latest census data.
 Costs and quality of resources: Hardly any difference in financial and human resources
required for a software company like Qualtrics

Since Qualtrics is looking to expand in a particular region (i.e., EMEA), the geographical distance
will not be a significant factor. I think the cultural and economic distance would be the most
critical determinants for a software company. Cultural differences would shape the company’s
marketing and messaging. It would determine how a company communicates with its clients.
Attitude towards data security, as it relates to a SaaS company, is an important cultural factor
that is highlighted in the case. Speaking of economic distance, the difference in purchasing
power, average wages, and relative strength of the currencies will determine the willingness to
pay (Also highlighted in the case). According to Exhibit 3, UK has a positive attitude towards
SaaS companies, and the general population is not concerned about data security. Moreover,
Qualtrics has observed a high willingness to pay a price premium from their “significant
customer wins” in London, UK.
Therefore, according to the CAGE framework, the UK is an attractive market to expand to for
Qualtrics.

Part II: 
The hard reality of global expansion is that distance still matters. Geographical distance doesn’t
capture all the nuances of international markets. In this case, the CAGE framework is our friend.
It helps to gain a deeper understanding of the challenges a company might face while entering
a new market. It nicely lays out four different aspects in which countries are different from each
other. Cultural, administrative, geographic, and economic distance. Each of these “distances”
poses challenges that the company must consider and facto-in their decision-making process,
before making a final decision about which country they will expand to. 
             The learning from this exercise is that Qualtrics should select a country that has low
cultural distance and economic distance. The set of factors depend vastly on the industry. In a
SaaS company that has other companies as clients, clear communication is vital, and substantial
cultural differences can lead to communication breakdown. For a company in the software
industry, it is hiring the right talent is very important. Economic differences play a significant
role here. The economic variables of a country heavily influence the costs of resources, such as
the cost of capital, salaries, and wages. They also affect the willingness to pay for various
services offered by the company.
             Cultural differences, such as language and social norms, have powerful implications for
software companies. Qualtrics will have to do translations, as well as implement additional
features in their software to allow for differences such as different time zones, daylight savings
time, various conventions, and notations in representing time/money, to mention a few.