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Exercise
Site Selection: Choosing the Right
Location
Section 3 Exercise 1
05/2020
The Location Advantage MOOC
Instructions
Use this guide and ArcGIS Business Analyst to reproduce the results of the exercise on
your own.
Note: Business Analyst is a dynamic mapping platform. The version that you will be using
for this course may be slightly different from the screen shots you see in the course
materials.
Time to complete
Approximately 30-45 minutes.
Technical note
To take advantage of the web-based technologies available in the Business Analyst, you
need to use a fairly new version of a standard web browser, such as Google Chrome,
Firefox Mozilla, or Microsoft Edge. Older web browsers may not display your maps
correctly.
Introduction
In this week's lecture, you learned about evaluating sites to identify the ideal location for a
new or expanding business. There are multiple business questions associated with this
situation, and you can answer many of them using geospatial techniques and the four-step
question-model-analyze-interpret workflow. In this exercise, you will use the analysis tools
available in the ArcGIS Business Analyst mapping platform to support decisions related to
business-site evaluation and selection. You will visualize data variables on a map to match
your target characteristics, and you will then identify the best location.
Exercise scenario
In this scenario, you are a business analyst at Natural Foods, a fictitious natural and organic
grocery store. Corporate management has asked you to find the best site for a new store
location in the San Bernardino/Redlands area of California. You have been provided with a list
of the parameters that Natural Foods typically uses for its new stores; you will need to
consider these criteria in your site optimization analysis. The new store site should be located
in an area with these attributes:
In this exercise, you will use Business Analyst to perform these tasks:
• Create a web map to show the demographics of an area, including household income,
home values, education level, and propensity to shop for natural or organic foods
• Search for possible competition in an area
• Import map layers with city zoning and real estate information
• Create a report with extra information, such as traffic counts
Approach
You will again use the question-model-analyze-interpret workflow for decision-making so you
can standardize the approach to optimizing business decisions.
Note: Download the decision-making workflow explanation document for more information.
Formulate the Question
Using location information can help you with almost any business decision. For this exercise,
Natural Foods' management needs you to recommend a location for your next store. You
know that location information and geospatial techniques can assist you, so the first step is to
frame the larger business decision by identifying a business question. You can frame the
question for this scenario as follows:
Within a chosen area, what is the ideal location for your business?
Model the Solution
Modeling the solution to this question consists of gathering the data (including the locational
component that you need) and identifying techniques to use to answer the question.
What is the locational component?
As you evaluate different sites for your business, you will find yourself asking questions with a
location component: Where do the people who might shop at your business live? Where can
a store or business be located with respect to zoning? Where are the areas of heavier traffic
located, to increase a store's visibility to potential customers? The location component is the
"where" in each question.
What data do I need for my map?
Site optimization uses a large amount of data to model, analyze, and learn about the areas
and the consumers who live in the areas where you want to locate your business.
To create a map that shows potential Natural Foods sites that meet the management's new
store criteria, you will need several types of data:
• Demographic information about the population around the cities of San Bernardino and
Redlands in California
• City zoning information
• Information about the competition (other grocery stores) in the same area
• Available real estate leasing information
• Traffic information
on the company's criteria for a new store. You will examine the local consumer population.
Then, you will analyze the level of competition in the area. Finally, you will add additional
layers to your map for analysis, including zoning districts or areas and real estate information,
such as available leases (with cost, square footage, parking, and so on). The results of the
analysis can be reviewed and interpreted as part of the larger decision about where to locate
a new store.
Interpret the Findings
After following the analysis workflow steps to reveal your findings, interpret the resulting
information to help inform decision-making efforts. You will be armed with accurate and useful
information about the location, potential customers, and competitors.
b To access Business Analyst Web, click ArcGIS Business Analyst Web App or type https://
bao.arcgis.com/esriBAO/login/.
d Sign in to the ArcGIS Business Analyst Web App using the same credentials you use to
access ArcGIS Online for this course.
The user name and password are the same as for the ArcGIS Online organizational site for this
course. Because the ArcGIS Business Analyst Web App is available as an extension to ArcGIS
Online, it uses the same login information, although it has its own web address.
If you have more than one ArcGIS Online account, be sure to use the account created for
this course. You can only access the maps and data for the exercises if you are signed in to
the ArcGIS Online organization created for the course.
Note: The Section 1 Exercise 1 PDF explains how to determine your ArcGIS Online credentials
(user name and password) for this course. If you have trouble signing in, please refer to the
Common Questions list on the course Help tab.
d Click Create.
f Pause your pointer over the Natural Foods Southern California project thumbnail and click
Open.
After the project is created and opened, the Maps tab opens with a preselected basemap.
Note: If you see items on the map from your previous project, from the toolbar on the right,
click the Clear Map button . Then, check the All box and click Clear.
You will configure the map to show the area of interest—in this case, the San Bernardino/
Redlands area of southern California.
g At the top right, above the search field, verify that the country dataset for the USA is
selected.
h At the top right, in the search field, click the down arrow and choose Zoom To An Area.
j Select San Bernardino, CA, USA, from the results list to zoom to that area on the map.
l Click the basemap button again to close the basemap options window.
Natural Foods conducted some initial market planning and analysis to discover potential areas
for the new store. The area bounded by San Bernardino to the west (to the left on the map)
and Redlands to the southeast was identified as the most desirable in the greater southern
California region. This area is most likely to contain a site that meets all of your criteria. You
will start with this area and narrow down your options to the best actual site locations by using
the process of site evaluation and selection.
First, you will learn a little more about the San Bernardino/Redlands area.
a From the Maps tab, click Create Maps and choose Color-Coded Maps.
b In the left pane, in the search field, type natural/organic and press Enter.
c If necessary, in the Data Browser dialog box that opens, expand the 2019 Health (Market
Potential) result in the Variables column.
d For the 2019 Buy Foods Specifically Labeled As Natural Or Organic variable, click the
percent button to map the variable as a percentage rather than as a quantity.
You can see that, particularly to the east (to the right on the map) and southeast, the area has
consumers who buy natural or organic foods—the exact demographic you are looking for.
The information from this map agrees with the market planning analysis and supports the
decision to choose a location in this area. Further, the map suggests specific locations to start
with.
As you take this or any GIS course and perform analysis, you will realize that the hardest part
of any analysis is obtaining the data. For the most accurate, reliable results, having good data
is just as important as having good software tools. Ideally, the data comes from a known,
reputable source and includes metadata that describes how and when the data was collected.
The following link describes the large dynamic dataset included with Business Analyst:
https://doc.arcgis.com/en/business-analyst/web/data.htm
Also read through the following presentation to learn more about data quality:
https://sway.office.com/vFHqEIn3iGojHF29
Note: If you ever lose your map, or have to sign out and sign back in, you can still access your
latest work. Click the All Projects icon, pause your pointer over the project, and then click
Manage Items. This area contains all of your recent sites, polygons, and other layers, which
are automatically saved every time you make an update.
b Change some settings, such as the symbolization or transparency of the overlay, to see
how the settings affect the map display.
You can also change Method, which is the statistical method used to classify the data.
Classifying data means breaking it out into classifications or categories so that different
symbols or colors can be used to visualize the data on a map. Most methods used to create
the classification schemes consider a statistical property, called the distribution of the dataset,
to best show the differences or similarities among values in the areas on a map. Business
Analyst allows you to classify the data in three ways: natural breaks, equal intervals, and
quantiles.
Note: To learn more about using classification methods, see ArcGIS Business Analyst help:
Color-Coded Maps > Method.
c Finally, check and uncheck the Place and Road labels boxes to show labels over the data
and the basemap. These labels can help you get oriented or help with a demonstration.
Note: You may want to remember these settings for later when you prepare the map for
saving, printing, or sharing.
a On the right, from the toolbar, click the Clear Map button.
c From the Maps tab, click Add Data and choose Web Maps And Layers.
This option shows you items in your Business Analyst and ArcGIS Online content, along with
shared items from your organization and the general public.
d At the top of the Web Maps And Layers dialog box, click ArcGIS.
g Pause your pointer over the Redlands Zoning feature layer owned by EsriTrainingSvc and
click Add.
Esri facilitates the distribution of open data through a product called ArcGIS Hub. Hub
promotes engagement and collaboration with communities. This link takes you to the hub site
used by the City of Redlands: https://opendata-coredlands.opendata.arcgis.com.
For this exercise, the dataset has been simplified to eliminate needless complexity and allow
clearer conclusions.
i After adding the zoning data to your map analysis, on the Legend, click the Map Contents
tab.
Note: If you previously closed the Legend, click the Legend button on the right toolbar to
open it again.
j To the right of the RedlandsZoning layer name, click the ellipsis button.
k Pause your pointer over Transparency and drag the slider to the right as needed to see
the basemap underneath the layer.
After examining the zoning information, you are closer to knowing which areas might be the
best for your new store. The candidate areas meet these criteria so far:
Having identified and mapped some of the criteria for a new store location and further
narrowed down the search, you will learn about the degree of potential competition in the
area.
a From the Maps tab, click Create Maps and choose Business And Facilities Search.
b In the left panel, in the search box, type grocer and click Go or press Enter.
Your map display updates. There seem to be several potential competitors in the area. The
stores are displayed as clusters on the map. If you click one of the numbers, a pop-up window
will display that contains information for the stores in each cluster.
On the left, you can scroll through different categories for filtering the data. Under Business
Name, notice that you could filter out grocery stores that you know do not focus on natural or
organic foods. And by setting parameters for Number Of Employees and Sales Volume, you
could find only those stores that are most similar to Natural Foods in size.
c At the bottom of the Business And Facilities Search pane, click Next, click Next again, and
then choose Save Layer.
e If you receive a warning about credit consumption, click OK, and then click Continue.
f If you have download capabilities, click Export To Excel to see the competition layer with
full attribute information. Save the spreadsheet locally on your computer in an easily
accessible location.
g On your own, examine the Excel spreadsheet to discover details related to your
competition.
a Open another tab in your browser, and go to the RedlandsRealEstate shapefile (https://
bit.ly/2R447wr).
d Close the browser tab from which you downloaded the RedlandsRealEstate shapefile, and
return to ArcGIS Business Analyst Web App.
e From the Maps tab, click Add Data and choose Import File.
g Browse to the location on your computer where you saved the zipped RedlandsRealEstate
shapefile and click Open.
k At the top, enable Classic Symbols and choose the green flag.
l Click Next.
m Under Choose Column For Site Name (Optional), click the down arrow and choose
Details.
n Click Save.
Examine where the real estate locations appear on the map and how the locations relate to
both the zoning areas and the competition. Look for sites that are located in or near the areas
noted earlier as being both close to target customers and within an area zoned for
commercial use. Which sites should be analyzed further? Can any be ruled out?
p Click each point to view the information in the pop-up window. Compare the sites on
these criteria: leasing cost, size, and amount of parking. Recall that you need between
25,000 and 50,000 square feet, less than $20,000 per month in cost, and at least 100
parking spaces.
The real estate information gives you more information for your search. There are other tools,
with additional parameters, for comparing the areas. In addition to the attribute information
on these real estate points, you can use the point locations to create areas, or sites, for further
analysis.
b If necessary, expand Other Layers and locate the RedlandsRealEstate imported points
layer.
c To the right of the RedlandsRealEstate layer, click the ellipsis button and choose Setup
Layer.
To create sites from point data, you can create rings with a set radius from each point. You can
also create sites based on drive times for cars or delivery trucks from each point or based on
walk times. For this scenario, you are interested in learning more about the areas immediately
around each potential store location that can be reached with a short walk.
d In the Setup Layer pane, under Use Field As Item Name (Optional), click the down arrow
and choose FullAddres.
e Under Create Buffers Around Selected Points, click the Walk Time tab.
f Change the time in the first box to 15, and delete the numbers in the other two boxes.
This step creates a single walk time area that shows what is reachable by foot within 15
minutes.
h If necessary, zoom and pan the map display to see all five sites.
After the new site layer is created, you have the option to use it for further analysis.
Note: If you closed the Setup Layer pane, from the Maps tab, click Run Analysis and choose
Suitability Analysis.
b If necessary, on the first screen in the Suitability Analysis pane, click Get Started.
By default, all five of the sites are selected for suitability analysis.
c Click Next.
d In the Suitability Analysis pane, click Add Criteria and choose Add Variables From Data
Browser.
1. From the Income category, add 2019 Median Household Income (Esri).
• Hint: Click the Income category icon and look in the popular variables.
2. Add 2019 Median Home Value (Esri).
• Hint: In Categories, search on home value and expand the 2019 Home Value
category result.
3. Add 2019 Education: Bachelor's Degree (Esri) as a percent (%).
• Hint: Click the Education category icon and change the type to percentage
before checking the box.
4. Add 2019 Buy Foods Specifically Labeled As Natural Or Organic as a percent (%).
Above-average income, home values, level of education, and percentage of people who
prefer natural or organic foods represent the more detailed population characteristics that
Natural Foods wants near the store site it chooses.
Note: If you need help or more detailed steps for finding variables using Data Browser, refer
to the Section 2 exercise.
After you add these data variables, the Selected Variables count in the Data Browser window
should show four selected variables.
f Click the Selected Variables count and verify that you have the correct variables, and that
the college-educated people and people who buy foods specifically labeled as natural or
organic variables are set to percent (%).
g Click Save.
h In the Save Criteria dialog box, name the list Natural Foods suitability.
i Click Save.
k If necessary, zoom or pan the map display to see all of the sites.
The default color ramp shows darker colors for the more desirable sites, which refer to the
15-minute walk-time areas around each real estate point.
l If necessary, expand the Suitability Analysis Results table at the bottom to learn about the
weighted and final scoring for each site.
Note: Pausing your pointer over a row in the table highlights the area on the map.
m In the Suitability Analysis pane, move the sliders for each of the four criteria.
Note: You can use either the sliders or the text boxes to set the weights. To type in the text
boxes, you may need to use the number keys at the top of your keyboard rather than the keys
on your number pad.
n Notice the changes in both the features in the map and the scores in the table.
You can see that increasing the weight of one variable automatically decreases the weights of
the others so that the weights always add up to 100 percent. The weights are what make
some areas appear more desirable than others. For example, increasing the weight of the
median home value variable shows that the areas to the east are more desirable. If Natural
Foods places greater importance on the percentage of natural/organic food shoppers and
higher education levels, however, the areas to the west appear more desirable.
You can click More Options under each variable for more settings. You can also click the lock
icon to lock a variable so that it doesn't automatically adjust.
You now have more information about which specific areas around each real estate
opportunity may or may not be ideal for your new store location. You can export these results,
either as a spreadsheet or as a new suitability layer.
p Select Export To A New Suitability Layer and check the box next to Include All Site
Attributes In The Suitability Analysis Export.
q Click OK.
particular location in one day? This information can allow you to gauge how many potential
customers may visit your store. You can find this information by creating a traffic count report.
a On the map, click the point that seems like the best possible site for a new store location.
It can be any of the five points.
c Under Choose A Report To Run, click the down arrow, and then scroll all the way down
and choose Traffic Count Map.
You can print or save this report along with the map image that you saved earlier.
The traffic report could help confirm your thinking that this is the best place for a new store
location. Or you could run reports on another site for more information.
As you interpret the findings, build a case for which site you believe is most suitable and why.
Do the combinations of existing parameters put one site ahead of the other, such as lower
cost, more parking, or more favorable demographics? There are usually even more factors
that you must consider when making such a big decision. What other possible criteria can you
think of? Remember to look to the future: Are there plans to add a commuter train stop near a
potential site? Consider ease of access to transportation: How close is each location to the
nearest highway off-ramps, and which side of the street is each location on when traveling
from those access points? Here are some additional variables that management might also
want to consider:
a In the top-right corner of the Business Analyst window, click your name and choose Log
Out.
Conclusion
In this exercise, you evaluated sites for a new business location. There are many factors to
consider when making such a potentially high-profile, high-cost decision. As you have
learned, considering quantitative variables, like costs or traffic counts, can help provide a solid
basis for a recommendation. You can explore many different datasets in Business Analyst that
cover a wide range of demographic, business, and consumer characteristics.
What further variables do you think could be useful in performing site optimization? There are
probably more qualitative, harder-to-measure variables to consider in a search like this, such
as neighborhood feel, sense of place, perceived relative noise, or other factors. How can you
take this analysis a step further? You are encouraged to take these tools, access the data, and
see what other information you can derive or what else you can learn.
You began this exercise with a business question: Within a chosen area, what is the ideal
location for your business? You used information available in Business Analyst. You modeled
the solution by combining the data with techniques to answer the question. You can apply the
techniques you used to other similar situations as well:
• Locating a military or college recruiting agency near wherever the potential recruits or
students live
• Locating a food delivery business in an area where people tend to have more disposable
income but fewer cars
• Locating a different part of the business, such as a manufacturing plant, farther from
consumers but near where potential workers live
• Locating the best place for a new office complex, which would need parking spaces,
zoning, restaurants in the vicinity, and so on.
Most importantly, take action on your findings. Do not let your findings simply be
documented in reports and archived (although those are good ideas, too). Your analysis
results should also be integrated where possible. The datasets and maps can be added to
reports or dashboards in your business intelligence systems to be made accessible or
distributed, for example. Putting your findings to use increases your competitive advantage:
the location advantage.