Purchasing A Gas Stations Is A Great Investment

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Purchasing a gas stations is a great investment. For this reason my cousin Edger is seriously considering purchasing two gas stations to increase his economical profits. I have been hired as a consultant for edger to assist him with analyzing the gas station industry and help him determine the best optimal decision. It is importance to consider the following when making a gas station purchase: location, if a convenience store will be beneficial, and if a franchise or being independent is the best route.
Demand Determinants
1. Location-competition
A company’s location is a very important factor. Location is a key component to a successful and profitable organization. When considering a location for a gas station it is important that buyer considers the demand. The buyer must take into consideration the customers wants and needs and all possible competition. Accessibility and neighborhood location is also a determining factor. Fox example immediate accessibility would a benefit for a gas station that is near an express way or highway.
The article Retail Redlining: Are Gasoline prices higher in poor and minority conducted a research study concerning price in poor neighborhoods and how these neighborhoods affected the price of gasoline. The research concluded that “prices will be higher in neighborhoods where stations have greater market power because of some combination of fewer competitors and/ or more inelastic demand (Meyers, p. 801).

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