Where should Tractor Supply Company stock Arrowquip cattle chutes in the Rocky Mountain region based on cattle inventories and a lack of Arrowquip dealers?
Moving forward, for the duration of our project we made the decision to answer a different question, that question being based off of cattle inventories, where the cattle handling equipment manufacturer Arrowquip should instate sales agreements with Tractor Supply. As such, the variables within our cluster analysis are the number of cattle including calves per county, as well as the number of Tractor Supply Stores per county. This allows us to put our clusters on where market opportunities may be present in comparison to where we see current Arrowquip dealers within operation. The idea here is to assess whether or not there could be a demand for these products. We anticipate that more cattle inventories would necessitate a greater demand for handling equipment and if Tractor Supply stores are within dense concentration, this could lead to opportunities in these given markets for sales contracts.
The results of our cluster analysis provided us with 4 distinct clusters, as can be identified in the below graph. Those counties as have been identified in red, are areas in which we see low numbers in cattle inventories while simultaneously also seeing low numbers of Tractor Supply stores. Additionally, we have the green counties. These counties are those that comparatively have higher cattle inventories while also having more Tractor Supply locations within that county. Thus, our green counties provide us with greater market opportunity than those of the red counties because we have existing infrastructure with many existing cattle producers within the area who could utilize Arrowquip products.
Later by comparing our cluster analysis to that of current Arrowquip dealers in the Rocky Mountain region of TSC, what we can see here is that in primary, places that are reflecting as red, or where demand may not be as substantial, are where the majority of current dealers are operating. While some are located in green areas, such as in the western region of Montana, what this allows us to do is find places where we may be able to satisfy demand, not over saturate the local markets with Arrowquip dealers, and not overshadow the current dealers. Thus, for example, a location like Colorado's very own Larimer County would be a very appealing place for Arrowquip and Tractor Supply to partner seeing as cattle inventories are relatively higher than most other places and there is also several current stores within operation that could handle the sales requests.