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Measure cannibalization calculates the amount of overlap between two or more trade areas. This overlap refers to the extent at which trade area boundaries coincide. For example, you could create drive time trade areas around an existing network of stores and a proposed new store location. The resulting analysis measures the amount the new store will cannibalize the existing store network. This tool can also be used to examine the amount of influence a new competitor will have in a given market.
Input PrerequisitesTwo or more polygonal trade areas. The trade areas must overlap.
Example OutputThe image below shows two trade areas with the Measure cannibalization tool applied. The bright green area highlights the amount of overlap between the two trade areas and can signify market saturation. The cannibalized area is approximately 30%.
The derived analysis can be shown in the table below and are indicated by the fields, A1, A2, A3 and A4:
- A1 - Measure of how large trade area 1 (dark green) is compared to trade area 2 (blue). TA1 is 132% larger than TA2.
- A2 - Proportion of trade area overlap. There is a 30% overlap between TA1 and TA2 meaning that 30% of the total area covered by TA1 and TA2 is overlapping.
- A3 - Proportion of trade area 1 that lies within trade area 2. Roughly 40% of TA1 lies within TA2.
- A4 - Proportion of trade area 2 that lies within trade area 1. Just under 54% of TA2 lies within TA1.
Learn more about Measure Cannibalization.