As George Davis clearly put it, “Setting a shop in the wrong place is like tying hands behind one’s own back”, Site potentiality (economic potential of a site) is an important factor that influences the success of a business as it determines the number of customer visits. The success of businesses such as service station, laundry, fast food restaurants, retail store and so forth depend on the economic potential of a site in order to maximize their profits through controlling outlets location.
Geography Information Systems (GIS) is a digital mapping system that links data to it geographic location; it organizes geographic data so that a person reading a map can select data necessary for a specific project or a task, for example, a social analyst can use base map of Nairobi, Kenya and select data from KNBS to add data layers to a map that shows resident’s level of income, ages and employment status.
Organizations are increasingly using GIS for planning and analysis, asset and data management, operational awareness and for tracking their workforce. Using ESRI GIS software, a business is able to maximize the ROI, as the tool is able to go beyond the standard data analysis.
How GIS can help to maximize the economic potential of a site
The quality of a site is associated with type and volume of traffic flow passing through a given site, road direction, road intersections and visibility from the road. By using GIS to capture traffic counts data, it becomes easier for a business to:
- Identify the best location site of business based on traffic pattern.
- Analyze how traffic may impact store construction.
- Schedule staff hours according to peak periods of traffic.
- Identify traffic growth and decline might impact a potential site.
Population density is the number of people living in a unit area or volume, a larger population density implies a larger market size. It has been proven that a large market stimulates potential entrepreneurship and provide workers with a strong incentive to start a business. Through GIS, a business can cluster areas according to their population density, also, it can determine the population distribution according to social-economic variables. For example, if a children’s store business is considering to open an outlet store, it can map the population of people with children being its target age group.
GIS is also used to analyze the level of competition in an area, by mapping the number and the location of similar businesses in an area. Moreover, a business can know where exactly the relevant distribution channels are located, so that it can then start to build a relationship.
In marketing, GIS can be used for sales territory planning, implying that a business will know how to deploy sales staff such that they don’t overlap each others’ territory.