For this exercise I chose to
take on the perspective of a supermarket. My company would need to be located
in an area of the city that is easily accessible to not only families and
single individuals, but I would also want to be accessible to employees of many
other downtown businesses and establishment. I would choose an area that is
probably closer to the outskirts of the city, but is within walking distance to
my store from residences and also within walking distances of downtown
businesses. For example, there is a Safeway store located at the intersection
of Osborn and 7th Street here in Phoenix. This store has many
residential homes to the West and South and tall office buildings to the East
and North.
During lunch hours, you can see
the mixture of homemakers doing weekly shopping and many business people
picking up a quick lunch. This logical choice for location of my supermarket
fits in the “Central Place Theory” as discussed in the assigned readings. My business is located in a dense population
based on the large number of high rises and other businesses located a short
distance away; and large residential communities located a “stone’s throw away”
from shopping.
I would also be located near a
major expressway so that goods can easily reach my store in quick time. This
closeness to the expressways will increase my inventory quicker and should
reduce any transportation costs associated with my deliveries. Another factor that would play into placing
my business closer to the outskirts of the city as land would be cheaper to
obtain. As you look to purchase property, 9 times out of 10, land becomes much
more expensive the closer you get to the center of town.
By buying land on the
outskirts, I should be able to save hundreds of thousands of dollars. The money
saved on land could be better used towards inventory or even advertising my
business. The more advertisement money spent should increase my customer base.
Trying to keep the local residents to buy closer to home will benefit me in the
long run.
Overall, by choosing to build
towards the outskirts of town, but staying close enough to service local
businesses and establishment, as well as local residential communities, will
save me initial investment money and allow me to pull in some pretty extensive profits
from those same business owners, employees, and homeowners.
It looks like you put in some good thought into where you would place your supermarket. I agree, that finding that balance between being far enough from the city to have low rent, and close enough to have a solid customer base is important, but it is also very difficult to find.
ReplyDeleteYou proposed that with the money saved from locating outside of town you would work to build a customer base through advertising. It would be interesting to consider if taking the larger initial investment of locating closer to town would take care of the advertising and customer base for you just by being in a more dense area with more people and businesses.
Great post!
ReplyDeleteI would however amend a certain part of your post, specifically that it may be cheaper to purchase on the outskirts of the different zones (depending on the zone of course), and note that (based upon having grown up in the Area) I would speculate you would be well within zone 2 of the concentric zone theory. However, one could argue that although not "downtown" 7th street and Osborn could be considered to be in a quasi-zone 1 due to its close proximity to the Central ave. corridor and "uptown."
Additionally, I would be curious as to the way one would "fill" the market niches in such a diverse area to maximize revenue. The area consists of a composite of highly extreme income and cultural backgrounds, as well as a myriad of factors. One factor to consider while catering to one niche or another that could be needed to be mitigated could be competition from "AJ's" on one spectrum, to many local "mom and pop" neighborhood markets which are more ethnically focused on the other.
Overall I felt your writing was well structured, and was glad to see that you chose to take on a very important point of view (ie the supermarket).
Interesting post. You are one of the only people, that I've seen who took the perspective of a supermarket owner. Being that I have no real facts to back up my own inner city observations, I would say that you've articulated your thoughts well. Obviously there are a myriad of factors that prevent grocery stores from locating withing city limits and suburban areas for that matter. For the scope of this assignment however, I think that you did well.
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