“Location, Location, Location” is a well known saying that started as a punch line and has become a cliché. But like many such sayings, it endures because there is an underlying truth.
We live in a physical world. The ability of overcoming distance has practical limits determined by technology. This has shaped our communities from older cities with narrow streets and rowhouses where most people walked and businesses used carts, to sprawling commuter suburbs powered by automobiles and trucks, to ex-urban settings made possible by knowledge work over the internet/cell phones. There is a time and cost imposed in moving from one location to another.
So location matters because of the need for connections between locations. Increasingly these connections can be “virtual,” but the need for physical connections remains in varying degrees. Location is:
- Where the customers are.
- Where the work or service is performed.
- Where the work place and equipment are.
- Where the products and materials are.
- Where the employees (and prospective employees) are.
- Where the knowledge and skills are.
- Where the meetings are.
- Where the costs are (or are not).
How does location matter to your business?
Now we are into everyone’s favorite high school subject – geography! (I suspect this may not be true, but let’s pretend for a minute.) It is widely claimed that 85% of business information has a geographic component to it. I cannot say whether the 85% is accurate but do believe that the % is high enough that it should be of interest to executives. So what possible value does this 85% offer?
Understanding “Where” Business Activities Occur – The first and most basic value of business geographics is to understand spatial patterns in the data.
- Where are the trouble calls?
- Where are the sales?
- Where are my people?
- Where are our stores?
Going to the next step involved looking into the trends around where (Where is growth occurring? Do we have less trouble calls for properties next to a freeway?)
Identifying Business Advantages of Location – The real value of business geographics is to understand where location provides a strategic or tactical business advantage. In the case of property locations, some traditional examples include:
- Which jurisdictions impose high tariffs on your operations? (macro-level)
- Which distribution centers provide the lowest travel cost? (regional-level)
- Which properties in a 5-mile radius have the lowest purchase and development cost? (site level)
You get the idea.