Use of Geographic Information Systems (GIS) in Business

The word “business” relates to the exchange of goods and services and in turn gives profit. Now the word “profit” sounds exciting…isn’t it? So how do we make the business profitable? Ever thought of it? Well GIS has solutions.

“Business Geographics” is the area of business which uses tools and techniques pertaining to geographic ones to conduct a plethora of important tasks to the world of business.Be it retail, marketing, insurance or banking, GIS can be used anywhere because it is a tool and not any hardware or software.

Read More about basics of Geographic Information Systems.

But why should one use GIS for business?
Well let’s get into economics 101. Less cost of production means more profit. 80% of business data is location based and GIS specially works on location based data. Let me elaborate with examples.

Applications of Business Geographics:

Identifying Markets:
For example, if a teenage clothing store is considering relocation because of less profit, rolling the store could map the population of people with teenage group in its target age group in the city or area it is considering moving to. The data can then be put into a GIS and mapped using dark colors for the highest concentration families with teenage and lighter colors for those without. Once completed, the map will highlight the ideal areas for the clothing store to locate based on that factor. This important aspect in business is the identification of a target market or "customer mapping”.

Determining if a Service is needed or not
Like “customer mapping”, it’s important to locate where a service is needed to get the best possible sales numbers. Using mapping allows various types of customers to be easily identified to see if an area needs a business or service.
Take for instance, a senior center. Because this is a specialized service it is important for it to be located within an area with a high proportion of senior citizens.
By using mapping,the highest proportion of senior citizens in a city can also be easily mapped. Therefore, the area with a greater senior population would need this service more than other age groups.

Identifying Other Services in the Same Area
Another problem that sometimes occurs in business is the location of two types of service in the same area. For example if there is already a PIZZA-HUT shop in the area, a new one will not be conducive unless there are enough customers to support both.With GIS all businesses or services of a certain type in a city can be mapped. The target customers can be put on top of a layer showing current PIZZA-HUT shop locations for instance. The result would be the ideal location for a new one.

Analyzing Sales-the retail aspect:
STARBUCKS has expanded its business using GIS. NIKE has identified its customers using GIS. How? GIS helps businesses to analyze the geographic patterns in their sales. In identifying these patterns, business managers can see certain areas where people buy various products. This is important because the peaks of say, black coffee as opposed to coffee with cream, might not be recognizable any other way. By identifying such peaks through the sale of different items at several coffee houses in a chain, the manager of the chain can determine which items to carry at the different locations. In doing so, can be a profitable supply chain.

Site Selection:
A new location of WALMART Important to its site selection are incomes, community growth rates, available workers, roads, water, etc. that may be needed to produce or sell a product.By using GIS, each of these factors can be layered on top of each other. The resulting map will then highlight the best possible site based on the characteristics deemed most important by the businesses managers.
Marketing Plans All these listed above (minus site selection) aid in the creation of marketing plans. Once a business is setup, it is important to be able to advertise to its “target market” in an efficient manner. The efficient sale of products and offering of services to the population is an important part of the world’s economy. In using maps, the notion is reinforced that maps make excellent graphical tools.

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