GIS for Business



GIS for Business

Introduction

Geographic Information Systems (GIS) is a term applied to a suite of computer programs designed to facilitate input, storage, manipulation, and analysis of spatial data and related attribute data (Burough, 2009). GIS have been in use since the mid 1960's (Tomlinson, Calkins, & Marble, 2010). The most common applications of this technology have been in natural resource management (by forestry and water resources management agencies), in infrastructure and facilities management, in land records management, and by property appraisal districts. More recently, many public utilities and municipal governments have embraced the technology (Goodchild, 2009; Estes, 2009). GIS is being applied in thousands of disparate ways, from mapping crime incident locations to tracking nuclear submarines (GIS World, 2010).

Applications in business decision making and market research have been a more recent phenomenon. According to Goodchild (2009, p. 3), "Given the importance of location in marketing, it is perhaps surprising that there has been so little discussion of GIS in the market research literature." With the assistance of this technology, marketers can practice micromarketing (i.e., develop marketing programs targeted to consumers in small geographic regions). Much of the analysis is conducted by large organizations and specialized consulting firms, which developed the speciality term geodemographics (i.e., combining geographic and demographic analysis for market research). (Wendelken 2010) The availability of lower cost software and more powerful and inexpensive hardware has prompted increased application of GIS by smaller firms worldwide. In the U.S., these factors, coupled with availability of standardized nationwide data, have led to a proliferation of GIS use in business applications. The availability of the 1990 census of the Topologically Integrated Geographic Encoding and Referencing (TIGER) system data set, developed by the U.S. Census Bureau, has been a particularly important factor (Martin, 2010). TIGER data is used with commercial PC-based GIS packages, such as Mapinfo and ARCVTEW, in business location analysis, in territory allocation studies, in efforts to identify target populations for market segmentation, in advertising, and in direct mail (ESRI, 2008; Francica, 2008). These PC-based GIS packages, some of which cost as little as $250, along with easy to access data of Metropolitan Statistical Areas (MSAs) or counties on CD-ROMs, low cost plotters, and computers, have rendered GIS-based spatial analysis a financially feasible approach for any size business. (Tomlinson &. Marble 2010)

Sources of GIS Data

GIS applications to analysis of SME-related issues have lagged other business applications, which began to utilize GIS in the late 1980's (Goodchild, 2009). Users have adopted the technology later than users with applications involving infrastructure and natural resources management by as much as two decades (Tomlinson, Calkin, & Marble, 2010). However, SMEs are now starting to embrace the technology and use it to study important issues. For example, franchisees benefit from GIS analysis performed by a parent company (franchisor) on their behalf. In many cases rationalizing and optimizing distribution and allocation of territories is performed using GIS to manage various types of spatial analysis. (Patterson 2008) GIS analysis can be used to determine optimal locations, allocate ...