Indian Journal of Science and Technology
Year: 2019, Volume: 12, Issue: 18, Pages: 1-10
Fernando Yanine1*,Felisa M. Cordova1, Lionel Valenzuela2 and Pablo Isla2
1Universidad Finis Terrae, Faculty of Engineering, School of Engineering, Av. Pedro de Valdivia 1509, Providencia; Santiago, Chile; [email protected], [email protected]
2Universidad Tecnica Federico Santa Maria (UTFSM), Department of Commercial Engineering, Av. Santa Maria 6400, Vitacura; Santiago, Chile; [email protected], [email protected]
*Author for correspondence
Universidad Finis Terrae, Faculty of Engineering, School of Engineering, Av. Pedro de Valdivia 1509, Providencia; Santiago, Chile.
Email: [email protected]
Objective: Traditional saturation analysis on competitive location decision science focuses on diminishing returns for incumbents and newcomers in a specific spatial location pertaining to commercial retail potential past a certain point of market saturation. Methods/Findings: This study looks at this problem but employs a different approach to the subject altogether, wherein saturation is no longer a variable affecting only retailers but one that affects both: the marginal utility of consumers and the revenue of retailers albeit differently. A new mathematical model is proposed based on selected papers, contributing new insight into an already widely discussed subject. Application: Analysis shows that it is important for competitive location decision-making to address saturation from both sides of the overall competitive location decision issue, not just from the retailers’ standpoint.
Keywords: Clustering, Competitive Location, Market Share, Retail Industry, Retail Saturation Index
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