MARKET ANALYSIS FOR OPENING A FOOD BUSINESS
Rafael Alcon
October 18, 2020
1. DESCRIPTION OF THE PROBLEM AND A DISCUSSION OF THE BACKGROUND
City of La Paz is the seat of government and the administrative capital of Bolivia. It is the second most populated department, with 25.2% of the population. It is located in the northeast of the country. According to projections for 2020, the department of La Paz has 2,927,000 inhabitants, with women making up 50.4% and men 49.6%.
The two departments with the largest number of economic units are the city of Santa Cruz and the city of La Paz. The largest number of economic units are dedicated to commerce and services.
When someone wants to start a new business it is necessary to know the growth of the economic activity of the area, also he needs to know the competition in order to evaluate the place and type of business to undertake.
This project will focus on finding information that can be useful for an investor, who will be able to evaluate where to open a food business in the city of La Paz.
2. DESCRIPTION OF THE DATA AND HOW IT WILL BE USED TO SOLVE THE PROBLEM.
The necessary data to be used are the following:
- Population of the city of La Paz divided by districts
- Data on economic activity in the Restaurant and Food Service sector
- Growth in the sector
- GPS location of established businesses
This data is important because it will guide us through understanding the market and give us a global vision with data support of the businesses currently working in the sector. We will be able to understand the relationship between different demographics and business data.
First the data will be cleaned, to prevent missing or invalid data from affecting the results later on. The information collected will be used for an exploratory analysis to evaluate the growth that has occurred in the past, and the proportion of the sector's impact compared to other economic activities will also be presented. A combination of data will be made to obtain new characteristics that can be useful in the project.
After that, we will proceed to perform relationship analysis between the data in search of new information that can help us make a good model. The results will be evaluated in order to know if we will need additional data or if the model needs to be modified.
The source of the required information is the following:
· Statistical summary of the Business Base, September 2020 - Ministry of Productive Development and Plural Economy
https://miempresa.gob.bo/docs/estadisticas/RESUMEN_BE_SEPTIEMBRE_2020_miemp.pdf
· Macrodistrict cards, services
http://sitservicios.lapaz.bo/cartillas/descargas/cartillas_macrodistritales.xlsx
· La Paz in figures 2020, INE (National Institute of Statistics)
http://inecloud.ine.gob.bo/owncloud/index.php/s/EHUEqSsYukkuyaA/download
· Public Accountability 2019
https://www.economiayfinanzas.gob.bo/rendicion-publica-de-cuentas-2019.html
METHODOLOGY
First the data was loaded and then it was cleaned. The data had the following structure
After the cleaning, a statistical analysis is made to obtain preliminary information
From the information we obtained the following
A comparison was made between the cities of the country and it was found that the city of Santa Cruz and the city of La Paz have the largest number of companies, surpassing by far the other cities. The city to which we will dedicate more attention will be the city of La Paz because it is the center of our research
On the other hand, a study was also made on the importance of the food sector compared to other categories.
The result of the data display was the following
The food sector only occupies 2.83% of total production compared to other categories
However, despite the fact that this sector is small in comparison with the other categories, its growth is in second place, which gives it greater importance and also gives it the opportunity for greater future growth
It was also possible to verify the distribution of inhabitants in the different districts of the city
RESULTS.
Through the combination of data and the search of places we were able to find the distribution of businesses in the city through the different districts
This information is very useful because it allows us to see the competition in each sector. In this way we can make a better decision based on the data. This information was also graphed. Two types of visualizations were made, the first one shows the different districts of the city with their respective amounts of inhabitants, on the other hand it was proceeded to make a graph grouping the different establishments according to their categories within the food area, specifically restaurants.
CONCLUSIONS
The food business is a sector in constant growth, which is why it deserves to be studied in depth. This research aimed to show the growth of the sector, the amount of competition according to the districts of the city and the number of inhabitants per district. This information will be very useful when evaluating the opening of a new food business in the city of La Paz.
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