Location Analytics and Competitive Advantage of Place SIGGIS Pre-ICIS Workshop, Seoul, Korea December 10, 2017 Namchul Shin, Pace University James Pick, University of Redlands
Competitive Advantage Michael Porter (Competitive Advantage, 1985) Industry Forces: buyers, suppliers, threat of new entrants, threat of substitute products or services, and rivalry among existing competitors Value chain activities: primary activities (inbound logistics, operation, outbound logistics, marketing/sales, and service) and support activities (Firm infrastructure, human resource, technology, and procurement) Cost leadership Differentiation Niche Competitive advantage of IT Competitive advantage of place (location analytics) Creating value and mitigating harm
Location Analytics Location Analytics (e.g., Business Analyst) provides solutions for multiple industry sectors: Retail Real estate Insurance Logistics (warehousing and transportation) Government Military Health care Different industries have different types of locations and different customers to analyze.
Industries, Locations, and Customers Industry Business example Location Customer or client Finance Financial services firm Office locations Investor Real estate Broker Buildings for sale or lease Office park developer Retail Grocery chain Grocery stores Shoppers Insurance Insurer Properties Homeowner Logistics/supply chain Shipping line Ports, terminals, warehouses Third-party logistics carrier
Location Analytics Location Analytics help you gain knowledge about the lifestyles and buying behavior of consumers and potential areas or locations for you to build, relocate, or expand your business (with less competition and attracting customers).
Cases and Maps Cases Maps Story Maps The Shopping Center Group (TSCG) Walgreens BP Maps NYC Crime Trends Big Apple Bicycle Map Story Maps Two Koreas
Location Analytics: Creating Value and Mitigating Harm Market Opportunities in the Northwest Region of New York for a Canadian Bank Site Selection for a New Green Home Improvement Center in the Minneapolis area Understanding Risks for an Insurance Company in Florida
Market Opportunities: New Branch Location
Market Opportunities: Search for Competition
Site Selection
Two Retail Store Sites (Carter and Steiers) and Competitors (Home Depot, Lowe’s Home, and Menards)
Major Shopping Centers (Gross Leasable Area)
Supply and Demand/Number of Businesses (Carter versus Steiers)
Market Potential Index (Carter versus Steiers)
Psychographics (Carter versus Steiers)
Findings for Carter and Steiers Retail Store Sites Overall, the Carter market area offers a more favorable competitive environment than the Steiers market area While supply for home improvement products is higher than demand, the difference is smaller than that of the Steiers area. Less number of competitors More active retail market with several large shopping centers Similar purchasing behavior (patterns) in the home (improvement) category, but the psychographic factors favor the Carter market area; adults in the Carter market area report higher levels of consideration of environmental factors in purchasing decisions.
Understanding Risks Using Location-based Information Insurance company Location of the company’s policyholders and the total insured value (TIV) of their properties Circles for TIV Heat Map for TIV
All Historic Hurricane Tracks in Florida
Three Most Likely Hurricane Tracks
Areas in Florida Predicted to Have Inundation from Storm Surge and Properties in the Highest Risk Zone