GIS and Strategy – an Introduction

Johannes Moenius

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A Little Personal Story …

Client of mine (around 1990):

• Construction company specialized in road construction, 40 employees

• Saturday mornings: for bids: drove or flew to locations

• Once a month, spend one day asking himself:– Where do I want to be one /

five years from now?– Did I reach what I wanted

one year / five years ago?– What do I have to change in

order to get there?

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Please Write Down:

• Where do I want my company to be one year from now?

• Where do I want it to be five years from now?

• What do I have to change to reach those goals?

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Now Please Ask Yourself:

• Would you like to know where your current and potential customers are located?

• What else would you like to know about your customers?

• Would you like to know where your competitors are located?

• What else would you like to know about your competitors?

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Goals and Strategy

• Competitive Advantage

• Above Average Returns

• Strategy

• Small Business Strategy?

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Decide: Which Markets to Serve and How to Serve Them

• Two Basic Strategies:– Cost Leader– Differentiation

• Not only for Products, also for Services, e.g.:– Cheap delivery– Fast / safe / reliable delivery

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Which Strategy?

• Depends on Your Environment:– Current Competitors– Threat of Entry?– Indirectly Competing Products– Buyer Concentration / Power– Supplier Concentration / Power

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Where Are Your Current Competitors?

• Example: location of competitors in some industry. Have map

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Are there any Underserved Markets?

• Again, example of new location for, e.g. coffee-shops or something like this

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Where Are my Buyers?

• Area profiling example

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How GIS Supports You

• Geo-coding

• Visualization

• Statistical Methods, e.g.:– Neighborhood-Analysis– Gravity Model

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Use Your Own Data First!

• Customer Records with Addresses

• Other Characteristics: Type of Product Purchased, Total Amount Spent …

• Driving Times (with daily profiles Isochrones)

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Other Data Available

• Jim, your input please

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What Kind of Answers?

• Do all my customers buy the same stuff or does that vary by location?

• Are there any areas that I am not serving the right way?

• How far can I reach with my products? How far can my competitors likely reach with theirs?

• Am I offering the right product to the right market segment?

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Some Examples

• Location Analysis

• Product Adaptation

• Serving Strategy (logistics strategy)

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Conclusion

• Strategy essential for small businesses

• GIS can support strategic decision making

• Data and Technology for this is readily available: own customer data, buyable data, open-source software, high-end programs, mapping web-services