SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN

THE DESIGN SCHOOL

FOUNDATION IN NATURAL BUILD ENVIRONMENT

NAME: Lai Choon Feng (0315898)

Bo Yong Khong (0316317)

Chong Zit Man (0315915)

Lee Kit Hung (0315722)

Gan Jet Foong (0315998)

Principles of Economics [FNBE0135]

Assignment: A Tale of Two Businesses – A Comparative Analysis of 2 Businesses of Similar Industry in Different Geographical Locations

LECTURER: Chang Jau Ho

SUBMISSION DATE: 13th June 2014 (Week 18)

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Table of content

Content page

Cover page 1

Table of content 2

Key summary 3

Brief description of business 4-5

Comparative analysis of business 6-9

Recommendation 10-12

Appendices 13-25

References 26

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Key summary

This is an assignment that we have to research and compare the same

business between Klang Valley and Penang. At first, we have decided to

interview the fried oyster food stall as our business, then we have to

elaborate how both of the business going. For the result that we know

from our report is fried oyster in Klang Valley is having the more profit

and also the fresh oyster compare with the Ah Soon Fried Oyster

(Penang). This is because of the fried oyster in Klang Valley is a

monopoly in the market. For the similarity, the main products selling of

Klang Valley and Penang famous fried oyster.

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Brief Description of Business

Ah Soon Fried Oyster

Location: No.2, Leith Street, 10000 Penang, Malaysia.

Branches: Do not have any branches

Employees: Do not hire any employees, his wife and daughter help him.

Main products: Oyster fried

Estimated current sales per day: 50-100 plates per day, can sell 200 plates in weekends, the highest sale is 300 when Chinese New Year

When the business started? : 5/1/2006, he was doing this business over 15 years ago.

Founder: Mr. Soon Zhen Wai (Ah Wai)

Motive to start this business: He affected by his father and brother. His father was a vendor and his brother had learned fried oyster omelette from a chief. Then, his brother asked him to start a business with him. After a few years, they decided to separate and earn money themselves because this can earn more profit. Therefore, Mr. Soon decides to go Red Garden to rent a stall and start his business alone.

Their recent development: They have no big recent development actually. However, the Red Garden food court was parking lot in the past.

Fried oyster in Klang valley

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This Fried Oyster stall was interviewed which was located in Klang valley, Subang Jaya Asia Café. The interviewee is the food stall manager and also the boss, Uncle Lim.

The business is only unique in that area. Uncle Lim had no idea to develop a second outlet because there are no successors to continue his business.

The food stall mainly sells fried oyster and Lobakoh. The famous food of selling is fried oyster.

Uncle Lim runs his business since he was a teenager and he did his business about 20 years and above. The reason why he comes to this business is his brother suggested him to be a partner to start this business as he just came to help at the beginning. After that, his brother quit the business as Uncle Lim turn to pick him up all the business. He preserves to continue the business alone.

Now his stall has two employees to help him to cook and serve the customer but only on weekends and public holidays. If on weekdays, there is only one employee to help him as well.

He started his business on 5pm until 2am midnight every day.

Each plate that he sells is RM10 for fried oyster and RM8 for Lobakoh. The size is fixed for all types of his food.

In that area, he has no any competitor because this type of business has no any big reciprocation.

He can sell his fried oyster about 100 plates per day and 50 plates for Lobakoh. He can sell more than the amount during weekends and public holiday.

Comparative analysis of business

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1. Number of competitors in their respective geographical markets;

Penang: There are a lot in Penang, can find out about 200 fried oyster omelette business through Internet.

Klang Valley: the fried oyster stall that we interviewed has no strong competitor. Since that, we can know that Uncle Lim’s fried oyster owns the only business in that area.

2. Brief bios of each business’ top 3 competitors

Penang: Mr. Soon said do not have top 3 competitors because there are too many selling fried oyster business in Penang.

Klang Valley: the market share of fried oyster is small since there is no competitive to Uncle Lim’s fried oyster.

3. How do the businesses compete with their competitors? What strategies were employed and how successful are they?

Penang: Mr. Soon had participated many tournaments of fried oyster and won many awards in Asian. For example, he went to Hong Kong, Singapore and Taiwan to participate tournament. Therefore, there are many reporters visit and interview him. Then, he gained a free cost of promoting his products through mass media. For the product variety, he said that he must the fresh oyster to maintain the delicious and yummy every day.

Klang Valley:No idea of competing with other opponents. He hasn’t meet challenge from other competitors.

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4. What are the obstacles faced by new businesses who wish to enter their markets today? Are they easy or difficult to overcome? Why?

Penang: The main obstacle is it is very hard to survive in this business because there are too many same businesses in this market. Then, the capital also is a problem who wants to start a new business. It is very hard to overcome the main obstacle. The reason is everybody else can make the same delicious foods, why they want to come and eat yours?

Klang Valley: To enter the market according to both bosses are currently we need enough cash as their capital to start their business. For business friend oyster in Klang Valley, Uncle Lim contributes about RM 100k to tart his business as well. He communicates by the food court manager to deal his rent about RM 2400 per month and also his employees. Each of his employees he has to pay them RM1200 a person for a month. By the way, He also deals with his supplier as well. He buys the stocks with fresh oyster on cheapest price or the price with discount.

5. What is the nature of their markets and your justifications?

Penang: The nature of their markets is perfectly competitive because there are unlimited of fried oyster businesses in Penang.

Klang Valley: The nature of their markets is monopoly because there are no competitors.

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6. You must include a summary table (see appendix 3) to compare the similarities and differences between the 2 businesses.

Competitive traits

Ah Soon Fried Oyster (Penang)

Fried oyster stall in Klang Valley

Number of competitors

200 above No

Barriers to entry Low, there are too many same kinds

of businesses.

Strong, it is the only stall in the area.

Differentiated or standardized products

Standardized, just one kind of food.

Standardized, just one kind of food.

Pricing power Price maker, it is very difficult to cook at the house.

Price maker, it is very difficult to cook at the house.

Other characteristic

Many close product substitutes foods nearby.

No close product substitutes foods nearby.

Verdict Perfectly competitive

Monopoly

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7. Based on your analysis, which business is more commercially successful? And why?

Based on our analysis, the fried oyster in Klang Valley is more commercially successful than Ah Soon Fried Oyster (Penang). The main reason is there are too many competitors in Penang. Therefore, the Ah Soon Fried Oyster (Penang) is difficult to gain extra profit. However, the fried oyster in the Klang Valley had no any competitors. So that, it can earn much profit.

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Recommendation

Ah Soon Fried Oyster Omelette

The business should open a new stall to become branches. The reason is this way can make the business maximum the profit. When the business is just focused at one stall or one shop, it is hard to earn extra profit. When need to open a new stall, den Mr. Soon and his wife should do business in their stall separately for maintaining the quality of food. The reason is foreign worker should not put so many efforts to do business when the boss is not there.

The business should make a new creation of fried oyster omelette because there are too many same kinds of fried oyster omelette in this market. Therefore, as the fried oyster omelette is very special and delicious. This would attract more extra customer come and taste. For example, black pepper fried oyster omelette, thousand island fried oyster omelette, mushroom fried oyster omelette and spicy fried oyster omelette.

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Fried Oyster in Klang valley

Uncle Lim has to expand his business to start his outlet. To expand his business, He has to find an other area there are having a majority of population like college students, workers and employees. And also he has to find the area that has a less competitor as he can earn more profit easily in a short period time. Besides, Uncle Lim can make more different ways of food which fried the oyster like he can do it with different type of saucers like chili, mayonnaise and steam as well.

Furthermore, Uncle Lim has to reduce each plate of the price from Rm10 to Rm8 for fried oyster and Rm8 to Rm6 for Lobakoh. This action is related to the strategy of attracting more customer come to his food stall to consume the products with him. And last, He must expand his size for his plate like he has a medium size and bigger size as it is easy for customers can choose more.

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Appendices

Ah Soon Fried Oyster (Penang)

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Shop's Title '' Penang Famous''

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Stall's appeared in newspaper

An appreciation model from Galaxy Macau

Lower view of the shop

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The front view of the shop, including the menu and price

These are the questions we had prepared to interview

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Questions (Mr Soon)

1) When is this food court started?

-5th of May, 2006.

2) What is the Business before this food court?

-Disco, car park.

3) Business?

-Fried oyster, hokkien pan mee

4) Are there any same business such as your's in this food court?

-No, this food court only does not allowed same business.

5) How to start a stall in a food court?

-You have to show a document of your experience, such as where have you do the business before.

6) Do your parents do together with you?

-Yes.

7) How long have you been doing this business?

-over 15 years.

8) Why would you do this business?

-I was inspired by my father.

9) What time do you open per day?

-5.30-12.30am

10) What time you come to prepare before opening?

-Around 4pm

11) How many plate of fried oyster can you sell per day?

-50-150 plates. Sometimes when there are events, it can sell more than 300 plates.

12) When would you rest?

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-Just one day during the 5th day on Chinese New Year.

13) Do you have any competitors?

-Yes, a lot. When you search online for fried oyster, there are about 200 fried oyster shop in Penang.

14) What is your strategies to maintain your selling?

-Fame, it is to attraction that people would come to buy. I had participate in a lot of competition and got many rewards, which also got me a lot offered from others countries such as Taiwan, Hong Kong, Singapore and Macau. I also find reporters to help promote my shop through newspaper and magazines.

15) How do you learn to fried oyster?

-I learned from my brother.

16) How many branches do you have?

-None, because I want to focus in a shop.

17) What is your obstacles to start this business?

-Suppliers. When there are technical problems such as vehicles broke down, then I cannot get the supplies.

18) How to avoid these obstacles?

-avoid to take ingredients from one supplies only

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Picture taken when we interviewed with the owner, Mr. Soon (Ah Wai).

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The owner was preparing the ingredients before business start

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This is the front view of Ah Wai's business card

The back view of the card

This is the certification of participation in the Penang Red Garden Hawker Center

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Certification of appreciation for Penang Hawker Fare in Singapore ( 1-31 October, 2010 )

Fried Oyster in Klang Valley

Contact details

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Address: No2, Jalan SS 15/8A Subang Jaya, 47500 Subang Jaya.

Contact number: 016-3581463

Boss name: Lim Tong Kiat

The signboard of the fried oyster stall in Klang Valley

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The license for business

The contact number given by the boss Mr. Lim

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How the stall looks like.

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References

Issac Tan. Isaac Tan.net. Retrieved from http://www.isaactan.net/2011/08/red-garden-food-paradise-penang.html (Accessed 5/5/2014)

Food point of interest. Retrieved from http://www.foodpoi.com/2012/04/crispy-fried-oyster-at-lam-ah-coffee-shop-chulia-street-penang/ (Accessed 5/5/2014)

Campbell.C (January 2013). Penang's traditional Oh Chien fried oyster omelettes. Retrieved from http://www.1stoppenang.com/articles/oh_chien (Accessed 5/5/2014)

Famous most wanted. Retrieved from http://food.malaysiamostwanted.com/venues/kedai-kopi-seng-thor-lebuh-camarvon-penang (Accessed 5/5/2014)

Penang travel tips. Retrieved from http://m.penang-traveltips.com/site/fried-oyster.htm (Accessed 5/5/2014)

Place sand foods. Retrieved from http://www.placesandfoods.com/2013/03/seng-thor-greasy-oh-chien-oyster-omelette.html (Accessed 5/5/2014)

Top food. Retrieved from http://www.tourism.gov.my/en/my/web-page/places/states-of-malaysia/penang#page/2 (Accessed 5/5/2014)

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CK Lam (20 jan 2014). What to see online. Retrieved from http://www.what2seeonline.com/2010/01/fried-oyster-omelette-oh-chien-in-penang/ (Accessed 5/5/2014)

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