Trade Area Analysis

1282 words - 6 pages

Trade Area Analysis: The Example of Best Buy in the Toronto Area
Part A: Trade area delimitation for Best Buy stores
1. There are 10 Best Buy stores shown on the map. They are almost evenly distributed all over Toronto. However, those stores are a little more concentrated in the southwest part of Toronto city, where are more densely populated. Apparently, Best Buy aims to serve all customers in Toronto. Each store is relatively some distance away from another to avoid overlapping market and at the same time cover larger market area.

2. Possible new locations can be identified, by applying Thiessen polygon technique to Map One. In theory, the vertices of boundary lines are ...view middle of the document...

The stores that are not under the influence of the new stores are Oakville, Heartland, Bramptch, Woodbridge and Ajax. The market areas for Sherway, Downsview, Leaside, Markham and Scarborough will be cut into smaller areas. As can be seen on Map Two, these market areas will be cut smaller and more even. In this way, more customers will be captured. The two sites are both in the vertexes of the polygons, which mean these areas are poorly served. Now consumers will be able to travel a shorter distance to a store.

5. Comparing East Site and South Site, they are both densely populated. Judging from the satellite image, most of the people live in houses and both areas are easily accessible. Although they will cause the market share to shift, the market areas for existing and new stores will be evener. The problem is “are there spaces for the new stores?” The theoretical locations are both inside residential areas. However, if we expand the potential areas, maybe it is easier to find one. Apart from finding a place to build the stores, opening new stores in the two locations is less likely to “cannibalise” their neighbours.

7. As can be seen, the downtown store and the Fairview Mall store are very close to the two of the possible new sites identified in Map One. The two stores are located in the region where were originally poorly served. Now consumers are better off as they now only need to travel a shorter distance and the stores are probably be able to capture more customers. However, the two stores are closer to the edge of the polygon meaning they might be a little so close to their neighbours that they start to compete with each other.

8. The smaller polygons indicate the regions that are relatively well served. If we are to close stores, in theory, closing a store in the area of smaller polygons will not cause too much inconvenience to customers. It depends on how long a customer will have to travel to another store after the closure of one and how it is compare with the distance he/she used to travel. In practice, there are also other factors that have to be taken in to consideration. For instance, it can be tricky when determining what the acceptable distance is to customers. Moreover, in reality, Best Buy stores are not identical. Some customers may prefer one store to another. Closure of a store can also mean there is space for your competitor.

9. To apply Thiessen polygon technique, there are several assumptions to make. We assume there is a disincentive nature to distance. This is very well proved in the real world. We also assume each store is identical. This...

Other Papers Like Trade Area Analysis

Janmar Coatings Essay

312 words - 2 pages -time low. On the plus side, the industry is seeing an increase in demand from DIY’s (do-it-yourselfers). Janmar’s trade area consists of 50 plus counties in Texas, Los Angeles, Oklahoma and New Mexico. They have a total of 1,000 outlets, but the majority of their business is within an 11-country DFW metro area. 2.) Market segmentation: 43% architectural 50% sold under private label 35% OEM 36% at specialty stores 22% special purpose

Gravity Model at Gcc Essay

5836 words - 24 pages . The GCC trade with the European Union and the US was found to be quite intensive although no formal trade arrangement existed between the GCC and both blocs for the time-period used in the analysis. The results suggest that the newly signed trade arrangements are promising in enhancing new opportunities of trade in the GCC region. *Corresponding address: Dr. Houcine Boughanmi, Associate Professor, Sultan Qaboos University College of

World Trade Organization

2984 words - 12 pages , involving increasing levels of co-operation. Examples include: Free Trade Areas (FTA) – This is the simplest kind of trading bloc and incorporates a two or more countries that have agreed to eliminate tariffs and other barriers to trade amongst members, but individually each country retains its own tariffs on imports from other non-member countries. Examples of Free Trade Areas are: * ASEAN Free Trade Area (AFTA) - a trade bloc agreement by the

Evolution of Trade Theories over the Years

1315 words - 6 pages Assignment I GOUTAM MUKHERJEE Ist Semester International Business Evolution of Trade Theories over the years Trade among counties is happening for ages. At the very basics, trade is about buying and selling – something human beings have been doing since they started living in societies. However, the same used to happen without any rules and regulations and completely depending on the individual or a group of traders

World Trade Organization

2992 words - 12 pages global arbitrage. Below is an analysis of each one of these differences to get a better understanding of the importance of World Trade Organization within the global economic and trading scale. Cultural Distance The WTO’s primary standard purpose is to serve as a negotiating forum for member nations to dispute, discuss, and debate trade-related matters. More than just a series of trade agreements, as it was under GATT, the WTO undertakes

Regional Analysis of Nafta

908 words - 4 pages Regional Analysis of NAFTA January 1, 1994, the United States, Canada, and Mexico entered a trade agreement which removed restrictions on trade between the three countries to encourage free competition, improve investment opportunities, and increase market access. NAFTA has provided some advantages to its members such as the eradication of tariffs, product price reductions, and increased profit margins. By reducing the tariff rate on goods


2969 words - 12 pages Mankiw – Chapter 9 SOLUTIONS TO TEXT PROBLEMS: Quick Quizzes 1. Since wool suits are cheaper in neighboring countries, Autarka would import suits if it were to allow free trade. 2. Figure 1 shows the supply and demand for wool suits in Autarka. With no trade, the price of suits is 3 ounces of gold, consumer surplus is area A, producer surplus is area B + C, and total surplus is area A + B + C. When trade is allowed, the price falls to 2

Free Trade Agreement Of Americas

2587 words - 11 pages Introduction The value of free trade is a contentious issue with many prongs. There appear to be economic benefits in the short-term to most, and in the long-term, to all that participate, as well as disadvantages. However, the area in which free trade appears most valuable and virtuous is that of providing freedom of choice. Since no single individual can produce all the different goods they need to maintain their life and achieve happiness

Darden Restaurants

648 words - 3 pages density, nearby hotels, and buying behavior, to name just a few. What has changed is the powerful software that allows Reiner to analyze a new site in five minutes, as opposed to the eight hours it took just a few years ago. Darden has partnered with MapInfo Corporation, whose geographic information system (GIS) contains a powerful module for analyzing a trade area. With the U.S. geocoded down to the individual block, MapInfo allows Reiner to

The Political Economy of International Trade

5985 words - 24 pages work in this arena. How does this exchange fit in with the WTO’s agenda to liberalize trade? 4. A second issue on the agenda at the summit involved greenhouse gas emissions and global warming. Bush steadfastly refused to commit to any significant effort to reduce greenhouse gas emissions claiming that the costs involved would jeopardize the U.S. economy. In your opinion, is Bush being short-sighted in this area? Will it, in fact, cost

Swot Analysis

1046 words - 5 pages , legal and trade regulations, exchange rates, and the culture of the various consumers they are trying to reach. First the company has to define its mission, what is the goal they are trying reach. If the company doesn’t state specifically what they want to accomplish, they won’t know what to work towards of if it is working. Once the mission/goal has been established, the company usually performs a SWOT analysis. A SWOT

Related Essays

Trade Area Analysis

1285 words - 6 pages Trade Area Analysis: The Example of Best Buy in the Toronto Area Part A: Trade area delimitation for Best Buy stores 1. There are 10 Best Buy stores shown on the map. They are almost evenly distributed all over Toronto. However, those stores are a little more concentrated in the southwest part of Toronto city, where are more densely populated. Apparently, Best Buy aims to serve all customers in Toronto. Each store is relatively some

Free Trade Area Essay

1227 words - 5 pages Free Trade Area At the lowest level there is the preferential trade area, this means that the members charge each other lower tariffs than those applicable to non-members; however there is no free movement of goods within the area. A free trade area means that the barriers and quotas to mutual trade are removed. For instance, the members of the North American Free Trade Area (NAFTA), Canada, Mexico and the United States, pledge to do away

International Trading Essay

1329 words - 6 pages : “Since the late 1990s, Syria has been very open to international trade. In 2005, is signed a free-trade agreement with Turkey (in operation since 2007) and joined the GAFTA (Great Arab Free Trade Area), a regional free-trade zone, while an association agreement with the European Union was drafter in 2005, then in 2008 and has been ready to be signed since the fall of 2009.” {4} International trade represents about 70% of the country's GDP, and

Equilibrium Of Prices Essay

3602 words - 15 pages Permutation and Combination Probability Set Circle and its relation with the circumference and Angles in the circle Angles and their relation angles Ratio Analysis (very very careful) Analytical Ability and critical Reasoning Math Related Critical Reasoning related Synonyms and antonyms\ Analogy International trade is the exchange of capital, goods, and services across international borders or territories.[1] In most