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GGR252 Lecture 4

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Stephen Swales

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January 28, 2014 GGR252 Lecture 4  Category killer = single category big box (e.g., Home Depot) that threatens the same department existing within department stores  Demand-supply pairs o Customer and store o Movie patron and cinema o Customer and bank o Reader and library o Patient and hospital o Student and school o Whether public or private sector, the objective is to bring the demand and the supply together o The geography of locational strategy is an important component in bringing the demand and the supply together  Course emphasis o Mostly private sector rather than public sector o Mostly retail examples o Mostly North American and European examples o Mostly post 1950  Average household having access to automobiles and accompanying infrastructure (e.g., power lines, sewer pipes, etc.) facilitated suburbanization (e.g., middle and high income) in big cities in North America o Mostly practical, but also academic/theoretical  Spatial concepts and the value of location o Basic spatial concepts o Location and demand – the spatial demand curve o Intra-urban retail hierarchies  Hierarchies of services o Location and competition – the hotelling model o Land value and land use o Bounding a spatial market o Models  Describing point patterns o Regular (uniform) o Clustered (linear clustered)  Distance decay  Linear clustered population pattern around the Golden Horseshoe o Random (dispersed)  Distance decay curve (interaction vs. distance) o With greater from the destination, there is a decrease in attraction o Distance decay describes a pattern  Disincentive nature of distance (friction of distance) o Disincentive of nature is the pattern of distance decay o Cost in time and money to cover distance o E.g., GTA limousine tariffs o Range = the point at which interaction reduces to zero because of increased travel costs  Range (e.g., the steepness of the curve) is different for different activities  Convenience store (narrow range) vs. power centre (broad range)  Doctor’s office (narrow range) vs. specialized hospital (broad range)  Intervening opportunities o E.g., retail interceptor rings  A strategy to intercept people who traditionally shop downtown  From the 1950s, the target market moved to the suburbs  Inner city malls placed in between to intercept the traditional malls  Over time, there are additional interceptor rings  Retail interceptor rings are focused on the downtown  Model = simplification of the real world to demonstrate some of its properties o Look at the assumptions of the model to find the weakness of a model o Models are simplifications of the real world o No model can illustrate the full complexity of the real world o Only the real world can accurately portray the real world  Anticipating a division of the market (in terms of geography) o Thiessen polygon technique  Line of indifference is halfway boundary line between two competitors  Distance or proximity to the destination is the only variable  Assumes that the market is identical (e.g., go to the nearest destination, fully informed and fully rational decision makers)  Where to put new facilities?  Define what the boundaries should look like  What situation would you have identical destinations?  Retail chains o Converse breakpoint method (simple gravity model)  Line of indifference is determined by distance and attraction (e.g., gravity)  The line of indifference moves toward the smaller destination  The customers are dragged to the larger destination  Both destinations are producing a spatial monopoly territory/area  Doesn’t accommodate the gradual distance decay curve  Usually a gradual decrease/increase of interaction (e.g., overlapping markets) o Huff model (more sophisticated gravity model)  Some chance/probability that you will go to the other destination  Accommodates overlapping markets  Boundaries between competitors o An equally divided market area between two centres (A and B) of equal size o If centre B is larger than centre A (e.g., gravity model), then the market boundary (or line of indifference) moves toward centre A  Diffus
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