Why do competitors open their stores next to one another? - Jac de Haan
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- čas přidán 30. 09. 2012
- View full lesson on ed.ted.com - ed.ted.com/lessons/why-do-comp...
Why are all the gas stations, cafes and restaurants in one crowded spot? As two competitive cousins vie for ice-cream-selling domination on one small beach, discover how game theory and the Nash Equilibrium inform these retail hotspots.
Lesson by Jac de Haan, animation by Luke Rowsell.
Teddy is a cold son of a bitch!
Son of a beach
abcdefg What you did there, I see.
+Disabler Keep calm, it was just a joke...
abcdefg ok im calm now *breathes inside lunchbag*
it's called paint huffing
Should have broke teddy's kneecaps for invading your territory.
Tammc's addendum to game theory :^)
Pimpin ain't easy.
Now that's a real Nash Equilibrium.
Edward Samuel Miliband you good sir just made my day, thank you.
Funnily enough this is similar to how original ice cream van locations worked in the UK, Where The venders would fight for prime locations due to how mobile their selling stations were
Alternative title for this video: "Why everyone hates Teddy and you should too"
Could you explain what is so bad about Teddy? I think that I might be confused
This is a genuine question
@Theo Van Tazic are you Teddy?! 🤔 you can sell other things and not keep changing the cart location. Ed is your cousin afterall, you can work together 😁 or maybe sell something else, fresh coconut 😉 hahaha
@@pyktukasplays4945 not only Teddy is a copycat, but he also tried to hinder Ed's biz by moving his cart further from the middle, leaving Ed with smaller area of selling ice cream, so that Ted can have more customer to himself. A cousin who's trying to break other cousin's rice bowl. Well tho they're just fictional characters but Teddy's action irk me so much. LOL
@@varideasfitidea Teddy provides competition in a market that was previously dominated by a monopoly. Every customer should be happy that Teddy is there
😂yesss
“In the real world businesses are free to compete with marketing strategies”
*fish flavor ice cream*
mmmmm my favorite
Well, TECHNICALLY You cant hate it if you never tried it
@@daforkgaming3320 still sounds like a deterrent than a niche marketing strategy 😂
Well, TECHNICALLY no one said they had to buy the fish flavour, they could just keep buying the original flavour and pretend the fish flavour never existed. If the original flavour was replaced by fish flavour then that would be more of a deterrent
Lmao thats legit the worst advertisement u can do, even if its legit. Cos nobody want like to think ur icecream is somehow related to the sea right ahead. Makes it sus what the icecream is made from.
One day, police found Teddy's corpse floating on the ocean.
😂😂
LOL
cha0s_dvl11 good I hate that guy
A MAN HAS FALLEN INTO THE OCEAN IN LEGO CITY
You do not recognise the bodies in the water
Unfortunately it seems that teddy decided to go swim in the ocean with cinder blocks tied to his legs
How unfortunate, nobody should try that
He tried to expand his market to scuba divers, unfortunately didn't turn out as expected.
These comments 😭
This is why you don't do leg day in the ocean..
🤣🤣🤣🤣
Me having learned a new concept in a simple manner: Wow! Neat!
The comments: "DEATH TO TEDDY!!"
Hahahaha! Exactly!!
Same bro wtf is going on😂
no no no, killing Teddy is far too merciful. what you want to do is partner with your friend neddy and arrive late. it looks like you aren’t coming, so teddy gets the middle. you and neddy agree to share the profits 60-40 (because your friend is a good sport and you hired him) and set up camp to the north and south of teddy. teddy can’t move anywhere because moving too far north or south would mean he would lose over half the customers, so he goes bankrupt. you and neddy split the beach at the 1/4 and 3/4 mark. you market yourself as different brands in fierce competition with each other, each with different marketing strategies. you make people fight over which one is better, driving up sales.
@@wren_. Nah bruh, if I'm bringing along my friend, I'mma make sure we both stay two step away from Teddy to the either side of him, he can take everything in between.
What if he tries to move? So will my friend and I, checkmate Teddy.
I came to the comments to get a summary of the video so I can learn it without wasting the time watching it...
now I'm really curious just what teddy did to make everyone hate him so much
"You don't need to solve the problem if the problem doesn't exist"
Somebody after erasing Teddy from existance
S.M.A.R.T
Wait? FBI OPEN UP!
Somebody who saw you did it
*He killed Teddy*
Well that's what predatory pricing and copyright attempt to do. Of course, if Ed's ice cream monopoly engages in business practices that endanger free market competition, there would be antitrust issues
im gonna make Teddy an offer he can't refuse
hahahhaja
disassemble his ice cream cart?
HE is gonna be turned into ice-cream!
POW!
BAM!
*WHACK!!*
+David Nagle This week: Strawberry chunks.
+Bonifilio Soto I don't get it :( can someone explain this please?
Stupid guys, handing out icecream but forget to take the money. They will be ruined.
Hevron underrated
I'm weak
a good comment. 10/10. this is the kind of content i want to see.
😂😂
It's a special beach, you buy a ticket and have access to the ice cream
If the cart is big enough, put Teddy inside it and take him to a drowing walk.
If you don't, what guarantees he won't?
Damn. Nash Equilibrium back at it again!
Totally agree
"Keep your friends close but keep your enemies closer"
-Sun Tzu
did Sun Tzu actually say that?
i thought its L (ryuzaki) who said that
(art of war)
And kill teddy
I thought its don vito corleoone that said this 😂
I would accuse teddy of violating the non-agression principle and proceeding to nuke his cart 20 times
Then invade his territory with Red Army
That would break 19 international atomic treaties, unless you did it silently.
@@kimjongun5676 do you know anarcho-capitalism?
@@somestickmanboi9458 a philosophy of self ownership, which i beleive is like in the vid where you have only your business by itself.
@@kimjongun5676 yeah..
Imagine a McDonald's and a burger king just relocating every day.
I am now suffering from mental trauma . Thank you
I'm pretty sure that's the pitch for Mortal Engines 2
McDonald's
Burger King
McDonald's
Also the other reason why it's good especially for new competitors is because if the people are not satisfied with the competition or it is too busy they can always come and try your products, thus gaining popularity. If you were to be in a place where you have no competitors the only people you that will come are people who specifically come to buy from you and that doesn't happen to often in the beginning.
Unfortunately, Teddy's business had to be closed because he ended up "missing"
Easy
“Keep your friends close but keep your enemies closer”
Robman92 “Tony Stark used to say that to me”
Dang it I was gonna say that😂
"Whoever said that didn't have many enemies" - Stannis the mannis
Andrew Simpson
Hi
@@JamesRival
Hi
Conclusion:
_Teddy is a problem_
teddy must be obliterated
teddy must be obliterated
teddy must be obliterated
teddy must be obliterated
teddy must be obliterated
Moral of the story: never trust your cousin!
Lol
*never trust teddy
It's as they say:
"Keep your friends close but keep your enemies even closer"
I would've pushed tedys cart in the ocean
+● Barack Obama ● i know
+Jigsaw79 ikr
+Jigsaw79 ikr
+● Barack Obama ● man FCK ted
Thanks +● Barack Obama ●
Never before has "keep your friends close but your enemies closer" made so much sense
its keep ur friends close and your enemies toaster
Godfather
I absolutely loved this comment.
Until one of you stabs one in the back... ;P
Hardball?
Moral of the story : Do not be cousins with Teddy
I think this is one of the simplest and clearest and best educational videos on CZcams.
sell your ice cream for 1 cent, with $999 shipping and handling
Mr. Drake bro do you work at EA?
Mr. Drake bro do you work at EA?
Or $1000 with free shipping
ProIceCream $0.99, stick not included
ProStick $999
$10 rebate, but you dont send the rebate and your custom service makes people wait 1 hour on phone.
Did you know many people die from accidental drowning at beaches
Wtf man
GO HOME
"accidental"
It would be such a shame if a certain ted "accidentally" drowned, wouldn't it?
Nice
One day teddy had a heart attack, not like the one where you all of a sudden get chest pains and nearly die, but one where someone literally shot his heart. Police don’t know who did it because the criminal was smart and wore gloves and also made sure there were no witnesses.
Nice
"When competition arises, burn them to the ground"
- Sun Tzu, the art of war
"stop quoting me for things I never said"
-sun tzu, the art of war
Keep your friends close but your enemies closer
+paul mathew I am dead cauz of your comment xD
+paul mathew Don vito corleone said this...
Shit you beat me to it
+The Man Whoever said that didn't have many enemies
+Rising Ragnarstrikper Its a line taken from the Spiderman cartoon series.
oh so this was the famous TED we keeping hearing about in TED talks. xD
That;s why this Ted hasn't showed up to any TED talks I've seen so far. his decomposing body is still currently on the ocean floor.
Both of these are underrated
Yeah
I actually didnt notice the ted ex joke
So everyone in these comments is tryna Kill TED?!
I don't know but there is something nostalgic with this animation style. Great job.
So, that's why Starbucks opens another store right across another *Starbucks*.
Starbucks are franchised and so each store has a different owner meaning this still applies to that
3:46
Yes eddy! Bring on the fish flavour!
Lmao 😂
🤮🤮🤮🤮
Lol 😅
@Stratis Georgilis Watch the video..
No wonder teddy outsmarts him everytime
On the fourth day, Teddy never show up again because he was “persuaded” to stay the fk home!
corona strikes, neither sell anything.
No his house were nuked
Ted shows up one more time and I'm shoving that fish-flavored ice cream where the sun doesn't shine
WHY ISNT THIS TOP COMMENT 😭😭
How do you know Teddy won't like it? Now if you shove it up his eyeball...
People set up similar shops near a bunch of stores who sell the same thing because whenever people wanna buy something, they tend to go to a location they last saw the store, and when they reach there, they see two similar stores. If the shop was set up else where, no one would know about it
It's 2020 and people still coming up with new ideas to torture Teddy
Edit: now it's 2021 and still people are being dark..
HE DESERVES IT
I legit love u 😂
However.. *why ??* :/
The coronavirus has now been created in a laboratory for the only purpose of killing Teddy.
2021 and teddys a memory
If my cousin broke our agreement like that I would have a nice little chat with him.
Then he will beat the shit out of you.
zoz0boy Probably
If i come out very aggressive but i can convince my cousin to honour our agreement.
But your competitors may not be your cousins always!
@@thomasli3119 That may be satisfying at first. But in the end you'd go to jail and then he would have the entire beach. If an accident were to happen though...
yea he would have a nice little chat with your fist
Why not offer cousin Ted to work together, merging ice cream companies while having 1:09 placement of two carts?
One morning Ted finds his icecream cart on flames, "sweet" irony
If i am on that situation and i am the customer. I always go to buy on the guy that have less customers, because it will not waste a lot of time waiting on the line rather than other guy that have more cutomers.
TRUEE
Yeah this! Especially when they sell identical products..i mean distance wouldnt be a problem tho!
What if the reason he has fewer customer is because he sells substandard stuff/faulty products or something?
@@SashaWtheweirdoanimallover yes sometimes who have more customer have more delicious products
Only if they are close to each other. In real world scenario distance is much bigger than this. Btw this is also one of the reason why same business exist in same place..
Why do a competitors open their stores next to one another
Plankton: To steal the Krabby patty secret formula
Ahhhhhhhh 😂😂
Lmao u made my day
🤣🤣🤣
Underrated comment
For some type of shops, it might also be due to communities managing where commerical shops or anything industrial is supposed to be placed. Around here, it also seems to be more about which area attracts which type of customer and where people have to walk past most frequently. They just end up next to each other because there are the most people in that area and they are allowed to do so.
It's also good to have options near each other just in case one place doesn't have something you are looking for or just for comparisons... a lot like how stores are organized. Each brand doesn't have it's own section, items are placed near similar items.
But how often that happens? Like 1 of 1000. Most common things are available everywhere.
That's why you should try to merge with Teddy's business and then raise the price to maximize profit together.
Capitalism in a nutshell
This is forming a monopoly which is currently illegal in the United States. Unfortunately, there is a way around it by forming an oligopoly which some big companies do.
A guy who exists with what purpose?
Joe C yeah then old cousin comes in with a cheaper price then bam you and ted are out
They could, but nothing's stopping a 3rd cart from strolling in and undercutting them, thus pressuring them to lower their prices again.
Solution: *[insert random way to kill Teddy]*
...why though ?? :v
-a confused soul
Solution: kill teddy with the strongest and biggest gun that shoots atomic bombs
Put a green eye lens
A hole in Teddy's cart 😁
@@Nightmare_Developer A hole in Teady's belly :D
1:26 God, I hate it when I fall into my ice cream cart and break my hips.
"Keep your friends close, your enemies closer"
What i got from the video:
1. Businesses (i.e. stores) all want to be located at the optimal location in which customers require the least amount of distance to get to.
2. However, the best case scenario is for businesses to be located away from each other, at a distance that allows both to be accessed by customers with the least effort (distance i.e. steps) known as socially optimal solution (S.O.S).
3. Since no one business can ensure that the optimal location will not be occupied by another business, all the businesses 'crowd' (place themselves) in the optimal location, therefore competing stores are all located next to each other.
There is one thing you missed. The "best case scenario" you pointed out is "the best case scenario FOR THE CUSTOMERS". Nash's equlibrium is the best case scenario for the icecream sellers (the one in which any player - in game theory - cannot inprove it's own situation without other player(s) getting in a worse situation).
They are both optmal scenarios, it only depends on what perspective you are looking at it.
@Theo Van Tazic yes, but don't think the government would choose acording to the interest pf the consumer. Just like the icecram sellers, politicians work according to theyr interests and that rarely coincides with the interest of the consumer.
For example, think of the following situation: a government exists (different from the situation in the video) and can choose who can and where you can open a business. For that job, the government receives X dollars (from the consumers). Now, if I'm the only icecream seller in the beach, I can bump up my prices AND will have more costumers. What is the optimal decision for me now as an icecream seller? Offer Y amount of money to the government in return for him canceling the permit of the other icecream seller. The optimal choice for the other icecream seller is to match my offer until Y = the marginal gain of owning the monopoly of icecram. At that point, when me and the other seller offer Y to the government, it will choose randomly (or who he likes the most - the one he plays golf with and always lets him win, or something) who will have the permit to sell icecream.
In other words, the government only helps the consumer if the politicians are incorruptible AND know the most efficient way to use the consumer and companies resources, and that doesn't happen often.
@@jromaoo The true optimal solution would be to go for the socially optimal solution yourself by opening 2 stores.
Sure, it will cost more at first, but it will give you most of the customers without the competitors being able to find an optimal spot to gain customers, putting you in reach of 100% of the customers. Since 2 stores are relatively closeby, that also means less costs for stocking up their product and if one store sells out of a product, you can get a quick restock by getting your other store to share some of their resources, meaning you can keep serving customers for longer periods of time without needing to restock.
Anyone trying to compete with you in the area will need at least 2 stores to get a similar advantage and would need at least 3 stores to start taking all your customers.
In fact, it should have a good effect on small businesses as they can settle around you having a guaranteed influx of customers without needing to advertise.
The only way big companies can truly start competing is by spreading out their restaurants optimally, improving the overall socially optimal solution as nash equillibrium is impossible to get.
In fact, this is done in amusement parks, where food stands are placed based on socially optimal solutions, and they rack in massive amounts of cash.
@@Predated2 are you talking about the scenario with or without government?
@@Predated2 if you are talking about the monopoly given by government, which is the situation similar to the amusement park example, you are correct only in the stores placement point. The optimal situation would to open stores as you pointed out, but the prices would be far superior to the free markets scenario (as we can observe trough the same example. Food inside amusement parks is much more expensive than outside).
*sry for my english
man .. looking at the comment section, you gotta love the internet 😂😂😂
😂😂
God yes
So much
Why
OMG I saw this talk many years ago and always mention it. Finally found it again!
I love this type of content. Keep it going!
I just realized... Teddy (Ted) + Eddy (Ed) = Ted-ed!
Omg yeah!!!!! So smart!
r/iamverysmart
Like one of my favorite Cartoon Network shows.
Ted, Ed, Teddy, and Eddy.
They're cousin in real ?
@@januzairamli4426 bruh how is this a r/iamverysmart he just realised
god dammit teddy
jasmine yeah Teddy is a traitor!
Even though I already knew part of this process, the video was really interesting and worth sharing, thanks !
I really think it's much simpler than all this. Business owners set up shop where crowds are already gathering. People don't want to take risks and would rather set up their booth right next to a competitor because they can see he already has people gathering there vs trying something new + unproven.
That's why you need the Mafia, to put Teddy in his place.
Yes
Your comment perfectly matches your profile picture.
Believe it or not this Nash equilibrium, is part of the economic game theory that won John Nash a Nobel prize.
Varoon way more.
Varoon No, its genius actually. It changed the whole economic landscape.
***** When its applied daily in almost everywhere, its more than just a theory.
"Beautiful mind" -- his biography movie
Ondra Hrdy Its a great movie, but I wouldn't call it a biography.
This took "keep your friends close a d your enemies closer" to another teddy level 😂
Tysm for such a informative insight. I was often stump by the same conundrum. Now, I see why is that.
*Slaps a stamp to improve ice cream sales*
Stamp: "New Fish Flavor"
Lol.. Go home.. u drunk
Govinda Solanki Vlogs W-what are the chewy bits? Minced fish heads?
hahahaha
@Bjjs That's a thing where is it sold????
@@cookiedove659 you can make it in your home . Buy a fish( middle sized, any fish) , chop it into very very small pieces ( very small) now add 3tbls sugar to it. Mix it properly and place it in refrigerator for 5 hours ( it becomes sweet. Then keep it outside until it comes back to room temperature. Now add 1 cup powdered milk and 1 cup water . Mix thoroughly. Add 2tbls sugar and mix again . Then let it freeze in refrigerator. I tried it . It's actually really nice to taste . It's chewy. You should try it too. Update me if you liked it or not .👌
Just double checked to see if you were pulling stuff out of the blue - But nope, it definitely says new fish flavour... Yikes!
I would've slapped teddy until he got knocked out
then u get all the custos
Them being closer to eachother has the benefit that customers can see both of the carts and chose which one they'd rather go to. The goal isn't the ability to go to ONE of the carts but ideally to ALL of them.
Also the distribution isn't always going to be the same throughout all of the beach. You could for example have it so that 50 % of people live on the southern most tip of the island and the other 50 % lives on the opposite side. Setting the cart in one of those locations takes all of the customers in that location and there's still an open market on the other side, so it's more beneficial to move your bussiness there.
As there’s say “Keep your friends close and your enemies closer”
I've read that this also affect customer's thinking psyche, like when Pepsi and coke open store next to each other the customer wouldn't think that should I buy a cold drink or not instead they would think should I buy the Pepsi or coke.
I agree with this. Making the consumer choose between two facilities makes him aware of the difference between rivals.
why tf would pepsi and coke open a store if their only commodity is a single product?
@@alexo2303 Ever heard of vending machines?
I wouldn't go for either. I'd seek out Dr. Pepper.
@@violetviolet888 That would be the third vending machine, also it is the second time I try to write this so if it pop up a second time it is youtube's fault.
There is an unsocial optimum solution though........burn teddy's cart...🤣🤣🤣
1:31 One thing - if someone were in the middle of the beach length-wise and on the edge width-wise, they would have to walk sqrt(2)/4 miles, which is more than 1/4.
I am so lonely sippin 40s that I am watching this on new year's eve! Happy 2021 everyone! and thanks yt for the recommendation.
There is another reason as well: it increases the value of the whole area for certain products as well.
Take clothing store.
I am not gonna go to some place via car to check if it has the clothes i want. Now, if there are 5 shops right next to each other i am more likely to go find it there, if not in one shop then maybe in 3rd one. So ordinarily i wouldn't have travelled their due to cost of opportunity ( i could go do something more useful instead of going there and coming back empty handed).
Same thing with Grocery Shops... I rather get everything i want, in one go from one place instead of traveling all over the neighborhood.
In other countries where transport systems aren't that good, markets are very specialized, for example.. there is flower market, books market, clothing market, hardware market etc.
Now this doesn't apply to super massive market. They always have everything often at cheap prices they are like the whole market themselves.
+answerOfstupids Comprehensive analysis! And a very good one too.
+Srinivas Ravi thanks
pretty much why commercial centres have opened xD
+answerOfstupids Yeah but this affects the relationship between the customer and the storekeeper and creates an air of suspicion. For instance, if there are two shoe stores next to each other and I walk into one. I find that they don't sell the shoes I want. Now if I get out of there and walk to the next store and that storekeeper sees me walking in from the next store, I get this huge feel of guilt because he just saw me prefer his competitor over him first. Then I begin to doubt that since he knows that his competitor does not have the shoes I want and also since he is angry at me for not preferring his store first, whether he may overcharge me on purpose.
This is why I hate it when two stores of the same kind open up next to each other.
Ashcool True, however, sometimes it's more true for regular items. But if you go like twice a month. Then they don't see it that way since they dont really know what you want.
I think the more important factors in the real world are: 1. Observer bias -- noticing a single isolated auto shop is more common but not noteworthy and 2. Often a "hub" of similar chains makes sense. Think of a fashion floor in a mall. It's often convenient to the consumer to find similar shops near to each other. Even something like a cafe: if it's a nice spot for a cafe, then when I go there it's great that if my first choice of cafe is packed there's another one a couple dozen metres away.
Exactly. The animation only briefly mentions it, but product differentiation means that you know the general idea where the products are, but the individual stores can still compete for your business, such as a fashion court. Meanwhile, with a food court, each person in your party can get what they want, so each seller benefits. Or, downtown where several restaurants are near your work, you will eat in the same area for lunch, but more than one restaurant will have your business during the week.
I also think there's one important factor missing.. if I'm opening a new store, placing it next to an existing store means that I will get a chance to attract their preexisting customer base.
Keep your friends close, and your enemies closer.
Very well produced video.
I just realized that while Teddy would be taking up your territory, you should widen your company's horizons and employ more people into the Ice Cream selling industry. Get a second cart and place it on the other side of Teddy, make him be flanked by two carts.
If he tries to employ the same strategy, buy a store on the shore. Advertise air conditioning, fresh and cool ice cream, get into the press and media to get more popularity. Spread your business to sandwiches and lunches, Teddy doesn't have the resources to compete outside of Ice Cream. Monopolize the selling industry for that particular beach, then SPREAD to other beaches. By then, you will have enough power and influence to frame Teddy of poor conduct. If he accuses you of monopolies, argue that Teddy is allowed to sell his ice cream, and that a monopoly would push him out of the market. THEN, you push Teddy out of the market by dropping your prices to such a low price that a small influence like Teddy would be unable to compete. Because beaches, unlike retails or manufacturing contain such a small portion of the industry, you will most likely be able to silence Teddy, then make a monopoly right under the government's eyes.
After you have made big bucks, go public. Make a brand name for yourself. Enlarge your corporation if you haven't already. Sell for lower and lower prices, invest into technology, then leave selling Ice Cream for stock exchange and the housing market. Go bigger than before. You've already monopolized one small industry, what's stopping you from monopolizing more? Start building bases in other countries, amass enough wealth and popularity to overrule the law against monopolies. Then? Then team up with big companies such as Amazon and Google. Wipe out your competition. Influence the government, corrupt the officials, then make the government your puppet. Mess with the election, get yourself as president. Get your friends into the Senate, and change the Constitution. Remove the Constitution, and replace it with a government of your making, a standing monument to the weakness of democracy. Go back to your roots, set up your ice cream cart again.
You're old, tired of fighting the government, the economy, the massive corporations. With your now ten year old ice cream cart, you head back to the beach where it all started. You smile at the place where Teddy's cart once stood, then go back. Back to selling your ice cream once more, content with the fact that you've changed everything, all thanks to Teddy and his cart.
Well damn….
that long
@@Deadeye3935 *thats
I love how you made a whole life story with one stem teddy and his cart. Wouldn't be surprised if you made it a self-management book..
Nice.... might consider putting it into action someday. That's how far one can go with motivation, competition, and an ice cream cart.
Boy, I love me some fish flavoured ice-cream!!
Yum!
i hate spiders
in my university, we developed a saint peter fish ice cream. but it taste like vanilla. what a fail
But shit, it was 99 cents!
Who knows, maybe it is a legit product :3
Ted Ed remains on of the most informative videos ever
"keep your friends close but your enemies closer"
-ted or ed probably
On the Friday morning of October 5 2012, investigators found what had looked like an old dish rag, but upon closer inspection, they found out that it was the remains of the missing Teddy H. Bear. There's no doubt that Teddy was stabbed then cut several times, investigators are now searching the area for any remaining pieces of Teddy. Friends and families have been informed, we shall let Teddy Rest in peace. This is D.A.Y News, Saturday at 7.
October 5 2012 _is_ Friday
there actually two more reasons for businesses to do this: 1. the geographical position is best. for instance: both icecream cars are on the same location (the beach) because the demand for their products is the highest in the area, plus no other competitors, like restaurants or supermarkets can move their businesses onto the beach. In that same way factories seek cheap land to build, near a workforce (the city) and near infrastructure (rivers and highways), since those locations are rare, all factories will go to the same area. 2. the reputation of the area. In my town, a whole bunch of restaurants and takeout places have settled in the same area near the trainstation and the shopping area, they got there because of the good conditions, however, the restaurants are right next to each other, causing the place to be known as a place to go for food. It allows customers to go there and then decide what to eat or ever get their food from multiple fastfood restaurants when they cant agree on what to eat, this gives the restaurants an advantage over other restaurants.
that is correct, in my city that what happens one street as more restaurants than the rest of the city, and they all gain from it. Although the inicial reason I guess it was free space north of the city, a former highway and an early famous restaurant. Several others opened. Now we have traffic jams to the restaurants as it attracts people from other cities, who where the early tourists (or their parents where) and these are the people responsible for the jam, and now it even started to attract foreign tourists just to eat, as that is not a pretty street.
Jason Schneijder your answer explains why they are at beach...it does not explain their positions
That's why in some countries it's the city council who decides where it's permitted to open a shop
Thanks for the video!
Who the fuck likes fish ice cream?
I do like!
+Martin Soendergaard-Jensen You've obviously have never lived.
+TheGayGamer who the fuck likes fish anyway ?
+Vegan Resistance lololol
+TheGayGamer Sharks get hot too ):
So in germany they opened a subway near a subway wich is next to a chinese resturant wich is next to a japanese resturant wich is next to a kfc wich is next to a burger King wich is near a McDonalds
And yes this is real
In my country (City to be exact), old business is starting to compete with new business. For example mcdonalds has been there since 2008. Until clothing store across the street was demolished and later renovated into a burger king. Same thing happened to another mall 6 km from mcdonald. A new mall is still under construction though.
I had simmilar situation here in Poland
Welche stadt?
yea its called a food court.
@@smilee6003 Welche nicht?
I had a similar question! thank you!
Nice video. Thanks for sharing
I asked this exact question when I was younger, just with car dealerships. My parents told me it was because if you didn’t like what they had at another store, similar stores wanted you to be able to come in, and hopefully find what you were looking for so you buy it
Not a bad answer tbh
@@Grivianyes
"Keep your allies close, but keep your enemies closer."
Actually it's the opposite
@@outlaw9889 K sorry nuggets
@@outlaw9889 No I called u a nUgGeTs
@@outlaw9889 lol
@@Mystic-wq8xt lol
Very well explained!!!
A question that I've been asking myself a life long! Thanks
I also think that the location itself is a factor. Downtown for example, is a really good place for restaurants regardless of whether there are competitors or not. You wouldn't build one in the middle of nowhere.
Superstores and Walmarts want location with cheap land so they can have large parking lots so suburbs would be ideal location regardless of competitors.
i always thought it was because if you go to mcdonalds and the lines backed up, there is a burger king across the street to take customers from a busy mcdonalds, if that makes sense
McD will generally make a substantial investment to identifying optimal locations. BK knows this and basically says, "Hey, McD did research on this locale and deemed it worthy of a location, if it's good enough for them it's good enough for us". Thus BK didn't have to spend the upfront $.
Okay, come to think of it, I do realize Tim Hortons and McDonalds are always near each other. Maybe there is some merit to this. XD
You wanna test test all these claims by removing mandatory minimum parking requirements, and by loosing zoning restricts (and no not like Texas, they have informal restrictions)? See some of those parking lots being sold to build apartments for families and singles, and watch new metro centres pop up in the suburbs.
There's a better explanation. If you need to buy a pair of shoes, where are you going to go?
There is a corner shop that sells shoes, it's the only shoe shop in the area. But in a mall, there are 5 shoe shops right next to one another. You could go to the cornershop, but if you don't find what you're looking for, you need to drive a long way to get to another shop.
On the other hand, at the mall, if you pick one shop, and don't get what you're looking for, you can just walk to the next shop.
Which location would you choose to shop? In other words, having competing shops in your immediate area will actually _increase_ your number of customers, because people will know that they have a wider choice of your products in your area, and so more people will come.
C
that works for some long lasting goods. But in the case of ice cream, people arent gonna be picky in the way they are picky about shoes.
ultimatenoob3 True.
Exactly. Or if you are a small food chain setting up next to a McDonalds. You are more likely to siphon off some of their customers just by being in close proximity.
The model in the video only works if firms sell the same products
I'm a civil engineer, and I can tell you that this is incorrect.
Whether the factor in the video actually plays a role or not, I can't tell you. However when it comes to choosing a location for a business, companies (Or at least the ones that I have done site design for) intentionally try to stay as far away from competition as possible. However, there are a few major factors which truly determine the location of construction.
The reason why I don't agree with this video is because choosing a location is not something which can be so easily switched around such as the ice cream example in the video. Once you choose a location for construction, this is permanent. The reason why so many similar businesses end up being next to each other is actually because of zoning requirements. It's easier to get a zoning use approved if there are similar facilities nearby. The city or county in charge of the development will never allow someone to set up a tire store in the middle of a rural area with no heavy commercial anywhere close. It's almost completely due to zoning and city requirements.
I won't say that competition over customers isn't a factor. It absolutely is. However this doesn't mean that businesses have to set up right next to each other. Zoning requirements on the other hand, do.
Ted Ed: A comprehensive explanation for a real life phenomenon.
Comments: *pulls a drag from a cigarette* "Teddy's gonna be sleepin with the fishsicles..."
In our area there are 7 gas stations within a square kilometer of each other that's ridiculous
Z
After eating taco bell, I have 100 gas stations inside my large intestine. How crazy is that?
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shut up you are like 8 you do not know anything about politics probably only what Facebook tells you.
thats cute .. come to philippines and see how many gas stations are there in 100 square meter
To steal the Krabby Patty formula of course
This literally sounds like Dream doing a presentation to his class
That was really interesting. Thank you very much!
I remember learning about this in university, but they used stationary business examples like a hotel or gas station (something that couldn't just move so easily).
With this they factor in footfall, i.e. if you wanted to set up a business but a competitor already existed, you would go set up near it as opposed to a completely new location.
This is because people would naturally already be coming to that location as they knew they could get the product/service there. That way you can exploit the natural footfall your competitor spent so long developing.
This would allows you to save on some overheads e.g. advertising trying to encourage customers to come to you. It's not black and white though, as you factor in brand loyalty etc too and determine if the hotelling model is the best idea.
You could always just dump boiling water in your Ted's ice cream cart when he isn't looking, then steal his girlfriend with the extra money you made
Are we hiring kidnappers?
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Go away.
How spiteful
This is literally the first ted-ed video I searched for
“Keep your friends close. Keep your enemies closer”