IS415 Geospatial Analytics for
Business Intelligence
Assignment 3 – Trade Analysis Report
G1
Nur Qamar Binte Kamaroli
25-02-2011
Introduction
Jurong General Hospital is managed by JurongHealth, the new public healthcare cluster formed to facilitate the
integration of services and care processes within the hospital and across the community, so as to better serve the
healthcare needs in the West. This is done in collaboration with community partners including primary care providers
such as General Practitioners and polyclinics, hospitals, long term care providers and voluntary welfare organisations.
Apart from Jurong General Hospital, JurongHealth also managed Alexandra Hospital from August 2010.
Purpose of the report
This report is prepared for Jurong General Hospital (JGH) to determine, analyse and report its trade areas and
geographic profiles by considering the market shares of the other hospitals in Singapore. This is done by:
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Mapping potential customers in relation to JGH business location
Determining the distance of all hospitals that impact JGH’s trade areas
Developing a model for predicting trade areas by adopting the Huff Model
Using the results as an input to analyze market potential
Jurong General Hospital & Trade Boundary
Jurong General Hospital (JGH) will be located within walking distance from the Jurong East MRT and Jurong East Bus
Interchange. Expected to start its operation in 2014, it will have 700 beds when it is fully completed. To analyse the trade
area for JGH and to estimate the market potential, a concentric circles methodology was adopted by drawing a 3km buffer
around the hospital.
Trade Area (3km from Jurong General Hospital)
The figure below shows the trade area of 3km within Jurong General Hospital.
Estimating Market Potential
According to NC State University1’s publication, there are 5 steps in determining the market potential:
1. Define the market segment (target market).
2. Define the geographic boundaries of the market (trade area).
3. Define the competition.
4. Define the market size.
5. Estimate market share.
1
http://www.ncmarketready.org/pdfs-ppt/business_development_files/PDF/estimating_market_potential.pdf
Step 1. Define the market segment (target market)
One of the first important steps of estimating the market potential for a business is to
determine the market size. The target market was generally described using
demographic variables: gender, age, education and income. In this case, the
demographics profiles are those from the lower to middle income family in the West.
This is due to the fact that 75 percent of the beds in the hospital will be in the
subsidised B2 and C-class wards, thus, it would be more realistic to set the
demographic profiles as such. Based on the spatial SQL query, there are a total of
54,179 households with income bracket of less than $3000
within 3km of Jurong General Hospital.
Step 2. Define the geographic boundaries of the market (Trade Area)
Using Manifold, the trade area is determined within 3km away from the Jurong
General Hospital. As the area is nearby neighbourhoods and has easy accessibility of
public transport, setting a 3km distance boundary would justify this decision. This
would be appropriate as Jurong General Hospital is meant to cater the healthcare
needs in the West and since it will be in the heart of the neighbourhood, people can
just walk from their homes or the interchange, even driving there would be no
problem as there would be abundance of parking lots situated nearby the
neighbourhood.
Step 3. Define competition
The next piece of valuable information is to note the competition around the trade area. As seen above there are 2
hospitals nearby that are situated within 3 km of Jurong General Hospital, they are West Point Family Hospital and Saint
Luke’s Hospital for the Elderly. It would be good to note what kind of services the competitors offer to the same target
group.
West Point Family Hospital has the capacity of 110 and offers the following services:
*Outpatient Consultation
*Minor Surgical Treatment
*Statutory Medical Examinations
*Treatment for Chronic Medical Conditions (e.g. diabetes, hypertension, etc.)
*Women's Health medical check-up
*Vaccinations (e.g. Hepatitis A & B Cholera, Typhoid.etc)
*Specialist referral
*Health Screening
*X-ray Examination
*Laboratory Tests
*Health Education & Promotion
*Retail Pharmacy
*24-hour Ambulance Services
By running the Spatial Query, we can obtain the number of households with income of less than $3000 within 3km of each
of the hospitals.
Since JGH's service focuses more on inpatient and major surgical treatments, Westpoint Family Hospital will not be seen as
a competitor to JGH.
While St Luke’s Hospital for the Elderly has the capacity of 380 and provides professional medical, nursing and rehabilitative
care for the needy elderly. Since St Luke's Hospital mainly cater to elderly needs, it can be seen as a supporting business to
JGH since most of elderly population resides around Jurong East area.
Step 4 & 5. Define the market size and estimate the market share
Once the market area, target market and total number of people in that market are defined, we make use of the Huff Model to define a trade area based on its
attractiveness relative to other trade areas. This model provides an approximation of business trade area by putting the distribution of all hospitals into a
geographical context and evaluating each location's relative attractiveness. A gradient probability circle is then used to model the spatial interaction of individual
locations.
Where:
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Aj is a measure of
attractiveness of store j,
such as square footage
Dij is the distance from i
to j
is an attractiveness
parameter estimated
from empirical
observations
is the distance decay
parameter estimated
from empirical
observations
n is the total number of
stores including store j.
The Huff model calculations are broken down in 5 steps below:
1. Calculate the distance of each grid to Jurong General Hospital.
2. Then calculate the distance of each grid to all other hospitals.
3. Calculate the attractiveness level of all hospitals in a grid. Attractiveness level is determined by the capacity of
each hospital.
4. The Huff model requires the summation of attractiveness levels of all hospitals in a grid.
5. Finally substitute all the values from step 1-4 into the equation to get the probability.
Conclusion
From the analysis presented Jurong General Hospital may be placed in a strategic location as it is situated in the heart of
a neighbourhood with majority of the middle to low income households can be found. With no major competitors
offering the same kind of services nearby, Jurong General Hospital has an advantage to reap off the benefits of being the
only hospital in the west to offer such services. The 2 hospitals situated nearby can be considered to complement the
nature of JGH’s business while supplementing the services that each is lacking of. By looking at the Huff Model, we can
see that JGH’s attractiveness level is quite high in the west region thus, iterating the point that I mentioned before, JGH
definitely has a large market share in the West as compared to other existing hospitals.