Running a business in today’s competitive marketplace is not as easy as it seems. You might invest millions in a new firm, but it won’t bring the expected ROI until you understand the current market condition. Market share analysis shows you how well your company is doing in the market and what you can do to improve your business’ performance. It is important to conduct competitors and market share analysis every now and then. It gives you deeper insights into your sales, finances, and more. Basically, it is a way to compare your sales with the competitor’s sales so that you get a better understanding of how your business is doing.
One of the most crucial decisions for conducting market share analysis is figuring out an optimal location for different facilities. It helps you identify the perfect location where you can serve people from the surrounding locations. Take retail businesses, for example. It gives you a better idea of where you should open the store, where it will serve the best, and which place will attract maximum customers. Government can also use these location-allocation tools to set up clinics for immunization.
Why is Location-Allocation Important for Market Share Analysis?
Your business’ performance and sales, specifically, depend largely on your location. It is the most important factor in determining the success of your business. For example, a retail store located in a populated neighborhood will most likely attract a large crowd. Once you know where your customers are based, you will have your customers rolling in throughout the year. The question is how do you locate the best location for your business? Well, that’s where the location-allocation tool comes into the picture.
First things first, you need to locate your customers. Find the location where most of your customers are located. This will give you a better idea of which area you should target and where the demand for your products and services is high. Before you set up a business, you need to conduct in-depth research on your audience, the location of your customers, and which segment of the population needs the products you offer. The government, for example, has already started using the location-allocation tools for identifying the perfect locations for establishing fire stations in the city.
Find the Location of Your Competitor’s Stores
The next step is to locate the competitor’s stores. It is important to know where your competitors have set up their business, as this data will give you a better idea of where you should set up your store. For a market share analysis, you are supposed to track the location of different stores offering the same products and services. This information helps you find out the demand at different candidate facilities.
Ideally, a location-allocation tool is the best way to get a clear picture of the most suitable location for your business — whether it is a startup or an established firm. You can also identify a competitor’s business location for conducting a better market share analysis.