Which analysis would you use to study the impact of cultural differences on trade?

CAGE analysis is specifically designed to evaluate the impact of cultural, administrative, geographic, and economic differences on international trade and business. By focusing on cultural differences, CAGE analysis allows businesses to assess how varying cultural factors can influence trade relations, consumer behavior, and market adaptations in different countries. This framework helps firms to understand the distance between markets—culturally, administratively, geographically, and economically—thus enabling them to formulate more effective strategies when entering or competing in foreign markets.

While other analyses serve important purposes, they do not focus on cultural differences in the same way. SWOT analysis is more oriented towards identifying internal strengths and weaknesses and external opportunities and threats, making it less applicable for understanding culture-related trade impacts. Cost-benefit analysis evaluates the economic implications of decisions rather than cultural factors, while PEST analysis looks at political, economic, social, and technological influences but does not break down cultural factors specifically in the context of trade. Therefore, CAGE analysis stands out as the most appropriate tool for studying cultural differences affecting trade.