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Dimensions of Market Attractiveness: Competitively Interactive Spatial Models *
Author(s) -
Cromley Robert G.,
Hempel Donald J.,
Hillyer Clayton L.
Publication year - 1993
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1993.tb00486.x
Subject(s) - attractiveness , normative , market analysis , market definition , multidisciplinary approach , market data , marketing , microeconomics , service (business) , field (mathematics) , business , economics , market structure , psychology , social science , philosophy , mathematics , epistemology , finance , sociology , psychoanalysis , pure mathematics
ABSTRACT This paper presents a normative, multidisciplinary approach for evaluating market entry strategies with concern for the effects of spatial assumptions on performance expectations. An assessment framework is linked to a series of models that show the value of adding spatial and competitive perspectives to typical baseline conceptualizations of market opportunity. Criteria for assessing market attractiveness are discussed with special concern for the problems of field service firms whose market boundaries are not limited by fixed facility locations. The problem is conceptualized as the managerial decision to locate a new brokerage office in a highly competitive regional market area. Realistic constraints are established by focusing the market entry decision through aggregate data from secondary sources that are readily available to an outsider who had not been active in the geographic markets considered. A simple model based on market potential is progressively enhanced with spatially adjusted measures of market attractiveness and competitive resistance. Empirical tests highlight the impact of alternative model formulations and choice criteria on the decision‐making process.