economics assignment report fnbe

SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN Centre for Modern Architecture Studies in Southeast Asia

Foundation of Natural & Built Environments (FNBE)

Principles of Economics [ECN30205] Prerequisite: None Lecturer: Tay Shir Men

Report Title : A Comparative Analysis of 2 Businesses of Similar Industry in Different Geographical Locations

Group Members:

Alfred Loh Kai Xuan (0323581) Carol Tang Ngie Bing (0323963) Chong Yi Hui (0324404) Joshua Lim Sie Khai (0323959) Yew Wing Kee (0323555)

�1

Table Of Content

�2

Cover Page 1

Table Of Content 2

Key Summary 3

Brief Bio Of Business 4-7

Comparative Analysis Of The Business’ Competitive Traits 8-11

Recommendation 12

Appendices 13-18

Interview Notes 19-22

Comparative Analysis Summary Table 23

References 24

Key Summary

We were given an assignment to compare the analysis of two businesses of similar industry

in different geographical locations. We chose to compare stationery businesses in Perak and in

Klang Valley. The stationary shop we chose in Perak is Pustaka Chiew Sdn Bhd which is located in

Bidor and in Klang Valley we chose Vision Art & Stationery Suppliers, which is located in Bandar

Sunway. After completing interview and analysis the report, we have investigated various stationery

shops dotted around Vision Art & Stationery Suppliers and thus understanding this particular

market current condition. In order to have a fairer analysis of the market, the investigation subjects

were carefully selected prior to the interview. Various factors are discovered to be playing an

integral part in its success. One of the deciding factors is the strategic location of the shops which

ensure its exposure and widen its range of customers. Pricing is also important as the market has

different natures in pricing due to the geographical locations.

�3

Brief Bio Of The Businesses

Vision Art & Stationery Suppliers

1. The stationery shop that we had interviewed in Bandar Sunway is named as Vision Art &

Stationery Suppliers. The interviewee is the Co-owner which is the owner’s wife, Winny Haiu.

2. The Vision Art & Stationery Suppliers is strategically located near the famous tourist spot which

is Sunway Pyramid Shopping Complex.

3. Vision Art & Stationery Suppliers has the one and only outlet opened for the business at PJS

11/28, Bandar Sunway, Subang Jaya. Vision Art & Stationery Suppliers has in total 5 employees.

The 5 employees of Vision Art & Stationery Suppliers consists of the owner(Mr Franky), the co-

owner(Winny Haiu), and 3 permanent full time employees.

4. The main product of Vision Art & Stationery Suppliers are the material of arts & stationery. For

example, sketching pencils, outline pens and et cetera. Other than that, Vision Art & Stationery

Suppliers also provides retailing and servicing such as photostat, binding and printing services.

5. In recent times, the co-owner(Winny Haiu) of Vision Art & Stationery Suppliers said that the

range of customer source is 90% of students and 10% of outsiders( people who wish to make

advertisement). Winny Haiu has estimated that there is around 100++ of customer everyday

during school days but when all the student is having their holiday, there will be a decrease from

100 students a day to less than 100 student a day in the estimated numbers of customer in Vision

Art & Stationery Suppliers.

6. The Vision Art & Stationery Suppliers business was founded by Mr Franky (55 years old) in

1994. The co-owner, Winny Haiu married into the family of Mr. Franky and helped continue the

stationery business. Vision Art & Stationery Suppliers has been doing good to the students by

supplying art materials, stationeries, retailing and services for more than 20 years.

�4

7. Vision Art & Stationery Suppliers was founded by Mr. Franky started with a very small shop in

PJS area during 1994 to 1997. They started their business there because they was targeting the

student from Satio Academic Of Graphic Design. In 1998, Vision Art & Stationery Suppliers

change the business strategic to Bandar Sunway. The aim is to target a better market, which is

The One Academy College, Monash University, Sunway University & Taylor’s University

Lakeside students. The result is better and profit of the business increase and bigger model.

8. The main motive of Mr Franky Started this business is to find a business which can make

money, and know where to find the source. Mr Franky was introduce to a stationery supplier by

his friend.

9. Over the past 3 to 5 years, Vision Art & Stationery Suppliers has gained more and more profit.

They were happy that a lot of student goes there to buy stationeries and art supply. This means

that they had accomplish to make Vision Art & Stationery Suppliers famous among the art

students.

�5

Pustaka Chiew Sdn Bhd

1. The stationery shop the we had interview in Bidor, Perak is named as Pustaka Chiew Sdn Bhd.

The interviewee is the manager of Pustaka Chiew Sdn Bhd in Bidor who is Sevon Tang Siew

Fung.

2. The Pustaka Chiew Sdn Bhd is strategically located Jalan Dewan Orang Ramai, Bidor, Perak.

The location there is strategic because there are parking spaces there and a primary school is

located near there.

3. According to the manager, Sevon, Pustaka Chiew Sdn Bhd has 15 outlets. All of the outlets are

located in West Malaysia. Pustaka Chiew Sdn Bhd has a total of 5 employees. The 5 employees

of Pustaka Chiew Sdn Bhd consists of one manager, Sevon Tang, 3 full time workers and 1 part

time worker.

4. The main product of Pustaka Chiew Sdn Bhd are stationery, practical work book and also art

supplies. Other than that, Pustaka Chiew Sdn Bhd also provides retailing and servicing such as

photostat, binding and printing services.

5. In recent times, the manager, Sevon Tang said that the estimated number of customers is around

30 customers per day. She also stated that most of the customers who come are teachers from

both primary and secondary school.

6. Pustaka Chiew Sdn Bhd business was founded by Mr. Chiew in 1997. The outlet in Bidor started

in year 2013. It is still new to Bidor but they have gained a good reputation among the people of

Bidor.

7. The main motive of Mr Chiew started this business is to find more profit to support his family.

He didn't know his business will go this way and have about 15 outlets in whole west Malaysia.

�6

8. Over the past 3 to 5 years, Pustaka Chiew Sdn Bhd has gained a lot of profit. Pustaka Chiew Sdn

Bhd make enough profit to support all the 15 Pustaka Chiew Sdn Bhd outlets in West Malaysia.

They hope their profit can support for more outlet until East Malaysia.

�7

Comparative Analysis Of The Business’ Competitive Traits

�8

1 In Klang, the Vision Art & Stationery Suppliers has 123 competitors, specifically in Klang Valley. There are at least 5 competitors in Bandar Sunway market.

In Perak, the Pustaka Chiew Sdn Bhd has 160 competitors, specifically in Perak. There are at least 1 competitors in Bidor, Perak.

2 In Klang, the Vision Art & Stationery Suppliers’ market share is big. There are at least 5 competitors which are near and threat to them which is Popular Bookstore located in Sunway Pyramid Shopping Complex, JS Stionery & Photocopy located in PJS 11/20, Bandar Sunway, Stationery & Media Shop located in PJS 8/2, Bandar Sunway, MCE Stationery(Chain Store) Sdn Bhd located in PJS 11/7, Bandar Sunway, Tee Seng Resources located in Taylor’s University Lakeside Campus & Heng Co Stationery Shop located in PJS 7. Among this 5 competitors, the top competitors in the market would be Popular Bookstore.

In Perak, the Pustaka Chiew Sdn Bhd’s market share is smaller than Vision Art & Stationery Suppliers. There is one competitor which is near Pustaka Chiew Sdn Bhd and is a threat to Pustaka Chiew Sdn Bhd which is KC Yue Enterprise located in Jalan Bidor Raya.

3 Vision Art & Stationery Suppliers:

Heng Co Stationery Shop

Khor Sai Ngob is the founder of the stationery shop. In 1960s, Khor Sai Ngob started business at Sungai Wang. The target customer is the villagers from the area. But sadly, she passed away 3 years after the business started leaving her husband and son to continue her business. In the 90s, they moved to PJS 7 because the government wanted to demolish the previous location to build double story houses. The business revenue decrease day by day due to the changing of location.

�9

B. Tee Seng Resources

Loo Tee Seng, the founder of this stationary shop. He graduated from UK in 1985 with a degree in economics. He travel for a few years and studying about the psychology of humans. He then worked with his brother in a stationary shop located at KL Jalan Ampang in 1996. After working with his brother for more than 20 years, he decided to retire from his work and find a more relaxing work to pass his time. In 2010, Mr Loo meet his old friend, Datuk Loy. With the relationship he have with Datuk Loy, he rented one of the shop lot in the commercial block of Taylor’s U Residence to start his stationary shop business. His business in Taylor’s University started 5 years ago. In the beginning, his business was not that good because of the lacking in students. However, after the first year of bad business, the business finally turn around and became more profitable.

Pustaka Chiew Sdn Bhd:

A. KC Yue Enterprise

Mr Yue is the founder of KC Yue Enterprise. He started his stationery business in Bidor earlier than Pustaka Chiew because Pustaka Chiew did not have an outlet in Bidor yet. KC Yue Enterprise’s stationery business went well throughout the years as there were not a lot of other stationery businesses in Bidor. A lot of teacher’s and students went there for their stationery supply. But when Pustaka Chiew Sdn Bhd opened a new outlet in 2012, KC Yue Enterprise’s business started to drop as the customers went to Pustaka Chiew Sdn Bhd to buy their stationeries. Based on the customers review, the prices of stationeries in KC Yue Enterprise are more expensive than those in Pustaka Chiew Sdn Bhd. And Pustaka Chiew also has a discount card for customers.

�10


Their strategy is to stock their products once the product is finish. Mr. Franky will call the supplier and order for new stock. Therefore, they do not have a fix time for ordering new stocks. It all depends on how much stock there is left. The owner will stock more of the product if that particular product is selling better. The supplier will introduce them to new products. They do not do much about market surveying and research. They never visit any other stationary shop for special purpose because they are quite successful in the stationery business.


Actually, Pustaka Chiew Sdn Bhd has no intend to divert customers away from the competitor. They just wanted to open another outlet anywhere to increase business sales so that they can profit more. Customers have the right to choose where they prefer to buy stationeries. However, because of its location that is at the commercial block, people tend to buy things there. Therefore, the location is their strategy to attract customers to go there. Near that commercial block, there is a tuition centre. Students and tuition teachers from that tuition centre find it convenient to just walk down to buy stationeries and exercise books. Besides, the pricing of stationeries in Pustaka Chiew Sdn Bhd is cheaper than the competitor.

5 Nowadays, it is hard to enter this market because the competitors out there are much more stronger than imagined. One cannot stand still in this business if they are not competitive enough. To start a stationery business, you need around RM150,000.00 capitals. Besides, you need to know a good and cheap supplier and also some basic knowledge about the machine being used for a stationery business. Due to Good & Services Tax( GST ), Income Tax and et cetera starting a stationery business is hard.


Their business is very good. Because Vision Art & Stationery Suppliers is famous among art & design students around Bandar Sunway. Vision Art & Stationery Suppliers’ is a monopolistic business.


Pustaka Chiew Sdn Bhd’s stationery business is more succssful than KC Yue Enterprise because of its lower stationery prices and also a discount card for loyal customers. Putsch Chiew Sdn Bhd is a monopolistic business.

�11

Competitive Traits Vision Art & Stationery Suppliers


Number of Competitors 120-125 firms 150-170firms

Barrier to Entry

• Weak • More diversified and

specialised goods with cheaper price

• They has high capital • It is located in the vicinity of

Sunway Pyramid and a residential area

• High exposure to the public • Wider range of customer

• Weak • Less diversifies goods but

with cheaper price • Low capital • Located at a commercial block

with a tuition centre nearby • Exposed to the towns people

in Bidor only • Narrow range of customers

Differentiated or Standardized Products

• Differentiated • Their goods more specify to

Art & Design materials • A1 to A5 size drawing paper

& mounting board • Art Eraser • Colour Spray

Standardised

Pricing Power• Price Maker • Few different products • High exposure to the public

• Price Maker • Normal stationery products • Less exposure to public

Other Characteristics

• No close product substitutes found nearby

• Inconstant advertising • Mutual dependence

• Many Close Product substitutes found around the area

• Constant advertising • No mutual dependence

Verdict Monopolistic Competition Monopolistic Competition

8 Based on my analysis, Vision Art & Stationery Suppliers wound be the more commercially successful business. One of the reason why Vision Art & Stationery Suppliers is more successful is because although it is located in Klang Valley and has a lot of competitors, Vision Art & Stationery Supplier still remains popular among a lot of students from various university in Klang Valley. Although in Perak the number of competitors are less, but Pustaka Chiew Sdn Bhd is not as commercialised as Vision Art even with its 15 outlets.

Recommendation


- Limited space in Vision Art is the biggest problem in running the business. Since Vision Art is

popular among the arts students, it is always crowded by customers. This makes it hard for

anyone to move around. Sometimes, when the suppliers comes, they will carry big boxes of

stationeries. They tend to block the entrance into Vision Art. Therefore, a larger space is needed

for the customers and the existing stocks.

- Besides, some students complain that the pricing in Vision Art is quite expensive. Students who

have little income has difficulty in buying stationeries because too expensive. They should come

up with a student discount card and prices.


- Pustaka Chiew is lacking in art suppplies. They have a lot of exercise books for school because

teachers will buy the books there for their classes. But Pustaka Chiew needs to widen their

customer target to not only school teachers. They should target also art students. Therefore, they

should supply more art products.

- They should survey their stocks that come in because some of their products spoil easily after the

customers bought them.

�12

Appendices


Contact Details : (Stationery Shop)

Contact Details : (co-manager)

�13

Address 3G, Jalan PJS 11/28, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan.

Contact Number 03-5636 0168

Fax Number 03-4636 0163

Email Address [email protected]

Name Winny Haiu

Contact Number 016-297 9978 019-336 7457

mailto:[email protected]

Interview notes

�14

Picture

�15


Contact Details : (Stationery Shop)

Contact Details : (Manager)

�16

Address 12, PT 2328, Jalan Dewan Orang Ramai, 35500 Bidor, Perak Darul Ridzuan.


Fax Number 05-434 1091

Email Address none

Name Sevon Tang Siew Fung


Interview notes

�17

Picture

�18

Interview

Business type: Stationery Business name: Vision Art & Stationery Suppliers Location: 3G, Jalan PJS 11/28, Bandar Sunway, 47500 Subang Jaya, Selangor Darul Ehsan. Office number: 03-5636 0168 Interviewee: Winnie Haiu, Co-owner

1. When was the business founded? In 1994.

2. Who are the key founders? Mr Franky is the founder.

3. What prompted the founders to start this business? They started their business there because they was targeting the student from Satio Academic Of Graphic Design. He started this business to make money.

4. What are your main products or services? Art materials & stationery. We also provide retailing and services such as photostat, binding and printing services.

5. Who are your customers? The estimated number of customers is around 100++ per day. 90% of the customers are students while the other 10 % are outsider or promoters.

6. What is the business’ annual revenue figure? 10K

7. How many branch of stores do you have? This is the only outlet.

8. Can you provide us a brief history of your business and its most recent developments? Mr Franky just wanted to do something that can make profit. Mr Franky was introduce to a stationery supplier by his friend. From then on, he started his stationery business until now.

9. Do you have many competitors? Who are they? There are a few competitors near here but we did not bother about them. I can name a few. They are POPULAR in Sunway Pyramid and JS Stationery & Photocopy,

10. Is the business constantly facing strong competition from other competitors?

�19

Of course there is competition but i wouldn’t say that the competition is a problem to us because we are famous among the arts students already.

11. What strategies have you used to compete with them? Sell more products to get more profits. With the profit, we buy more stock and sell more to earn more.

12. How often do you release new products? We release new products if the supplier supply new products for us. And if we think that the product is OK, then we will stock and sell.

13. Are your pricing strongly affected by your competitors? No.

�20

Business type: Stationery Business name: Pustaka Chiew Sdn Bhd Location: 12, PT 2328, Jalan Dewan Orang Ramai, 35500 Bidor, Perak Darul Ridzuan. Office number: 05-434 1091 Interviewee: Sevon Tang Siew Fung, Manager

1. When did the business here started? In 2013.

2. Who are the key founders? Mr Chiew is the founder.

3. What prompted the founders to start this business? The main motive of Mr Chiew started this business is to find more profit to support his family. He did not know that this business will have 15 outlets.

4. What are your main products or services? The main products are stationery, practical work book and also art supplies. Besides, they also provide retailing and servicing such as photostat, binding and printing services

5. Who are your customers? The estimated number of customers is around 30 per day. Most of the customers are teachers.

6. How many branch of stores do you have? All together there are 15 outlets.

7. Can you provide us a brief history of your business and its most recent developments? Mr Chiew was just a normal guy who wanted to provide for his family. That is why he started this business. Throughout the years, Pustaka Chiew has gained a lot of profit.

8. Do you have many competitors? Who are they? There are not many competitors in Bidor as Bidor is a small town. There is only one competitor which is KC Yue Enterprise. KC Yue Enterprise has been in the area long than this outlet. But Business is going well for us. No worries.

9. Is the business constantly facing strong competition from other competitors? We are not facing much competition from the other outlet because our prices is cheaper than KC Yue Enterprises. We also have friendly staffs.

10. How often do you release new products? We release products depending on the main outlet. It is very hard to say.

�21

11. Are your pricing strongly affected by your competitors? No.

�22

Comparative Analysis Summary Table

�23

Competitive Traits Vision Art & Stationery Suppliers


Number of Competitors 120-125 firms 150-170firms

Barrier to Entry

• Weak • More diversified and

specialised goods with cheaper price

• They has high capital • It is located in the vicinity of

Sunway Pyramid and a residential area

• High exposure to the public • Wider range of customer

• Weak • Less diversifies goods but

with cheaper price • Low capital • Located at a commercial block

with a tuition centre nearby • Exposed to the towns people

in Bidor only • Narrow range of customers

Differentiated or Standardized Products

• Differentiated • Their goods more specify to

Art & Design materials • A1 to A5 size drawing paper

& mounting board • Art Eraser • Colour Spray

Standardised

Pricing Power• Price Maker • Few different products • High exposure to the public

• Price Maker • Normal stationery products • Less exposure to public

Other Characteristics

• No close product substitutes found nearby

• Inconstant advertising • Mutual dependence

• Many Close Product substitutes found around the area

• Constant advertising • No mutual dependence

Verdict Monopolistic Competition Monopolistic Competition

References

Websites

Facebook logo. (n.d.). Retrieved January 18, 2016, from https://www.facebook.com/pages/Pustaka-Chiew-Bidor/570078379740073

Google. (n.d.). Retrieved January 18, 2016, from https://www.google.com/?gws_rd=ssl#q=pustaka chiew bidor

Google. (n.d.). Retrieved January 18, 2016, from https://www.google.com/?gws_rd=ssl#q=vision art

PUSTAKA CHIEW (BIDOR). (n.d.). Retrieved January 18, 2016, from https://foursquare.com/v/pustaka-chiew-bidor/5311b8e111d286ccf2f348ad\

Vision Art & Stationary Suppliers. (n.d.). Retrieved January 18, 2016, from https://foursquare.com/v/vision-art--stationary-suppliers/4d9ea7df9bf0a35dace3ff0a

Eyeing the Four Basic Market Structures. (n.d.). Retrieved January 18, 2016, from http://www.dummies.com/how-to/content/eyeing-the-four-basic-market-structures.html

Person

Haiu, W. (2016, January 1). Vision Art Interview [Personal interview].

Tang, S. (2015, December 27). Pustaka Chiew Interview [Personal interview].

Map

Vision art - Google Search. (n.d.). Retrieved January 18, 2016, from https://www.google.com/search?q=vision art&rlz=1C5CHFA_enMY671MY675&oq=vision art&aqs=chrome..69i57j69i60j69i59l2j69i60l2.2438j0j7&sourceid=chrome&es_sm=119&ie=UTF-8#q=stationery shop in klang&rflfq=1&rlha=0&tbm=lcl

Vision art - Google Search. (n.d.). Retrieved January 18, 2016, from https://www.google.com/search?q=vision art&rlz=1C5CHFA_enMY671MY675&oq=vision art&aqs=chrome..69i57j69i60j69i59l2j69i60l2.2438j0j7&sourceid=chrome&es_sm=119&ie=UTF-8#q=stationery shop in perak&rflfq=1&rlha=0&tbm=lcl

�24

https://www.facebook.com/pages/Pustaka-Chiew-Bidor/570078379740073

https://foursquare.com/v/pustaka-chiew-bidor/5311b8e111d286ccf2f348ad%5C

https://foursquare.com/v/vision-art--stationary-suppliers/4d9ea7df9bf0a35dace3ff0a

http://www.dummies.com/how-to/content/eyeing-the-four-basic-market-structures.html

economics assignment report fnbe

Education