final econs report

SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN

FOUNDATION IN NATURAL BUILT ENVIRONMENT

MODULE : PRINCIPLES OF ECONOMICS [ECN30205]

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

LECTURER : MS TAY SHIR MEN

SUBMISSION DATE : 25TH NOVEMBER 2015

Group Members :

Name Student ID

Chloe Sim Ti ing Ern 0322932

Rachel Yeo Chi Xuan 0323005

Karen Choo Qiao Ying 0322480

Melvyn Poh Ern Meng 0322653

Lee Zhi Ang 0322061

FNBEJANUARY2015|EconomicsAssignment|Taylor’sUniversity 2

Key Summary

In this research assignment, we, as a group of 5, are required to write a report regarding the comparison of 2 different companies of the same business industry. We are to compare the businesses’ competitive behaviours, to research and analyse the results. We chose to compare two tyres & auto services workshops, one in Malacca and the other one in Subang Jaya. Through our researches, we found out that the workshop we interviewed in Malacca differ from the workshop in Subang Jaya in the sense that the one in Malacca is of a family business, whereas the one in Subang Jaya is an organisation with a few branches in Klang Valley.


Methodology

To begin with, we chose tyre and car care workshops for our research assignment because of its popularity in Malaysia and they can be found almost everywhere, anytime. We planned a trip to Melaka as required in our brief. Coincidentally, one of our group mates have a family friend who owns a car tyre and battery workshop, which makes work a lot easier for us. He contacted the owner of the shop and later on we went on with the interview session straight away. We planned beforehand the things we have to do when we visit the shop, to prevent wasting time and work inefficiency.

We chose Yuen Chuen Huat in Melaka and HupShun Tyres in Kuala

Lumpur as our interviewees. For the HupShun in Kuala Lumpur, we sent an email to the company and received a quick reply by the sales manager. He was very willing to help us for this assignment and therefore we appointed a time to meetup in their workshop for an interview session. We recorded the whole process for the both interview sessions, took down some notes and also took pictures of the shop.

Eventually, we as a group, compile all our information collected and

combine them into a report.


History of Tyre Business & Its Development In Malaysia

The modern tyre that we took for granted nowadays is very different from where it all started during the 1800s. Going back in history, the earliest tires were bands of leather, then iron, later steel, placed on wooden wheels, used on carts and wagons. The tire would be heated in a forge fire, placed over the wheel and quenched, causing the metal to contract and fit tightly on a wheel. A skilled worker, known as wheelright, carried out this work.

The materials of modern pneumatic tires are synthetic rubber, natural rubber, fabric and wire, along with carbon black and other chemical compunds. Today, the majority of tires and pneumatic inflatable structures, comprising a doughnut-shaped body of cords and wires encased in rubber and generally filled with compressed air to form an inflatable cushion. Pneumatic tires are used on many types of vehicles, including cars, bicycles, motorcycles, buses, trucks, heavy equipment, and aircraft. Tires are classified into several standard types, based on the type of vehicle they serve. Since the manufacturing process, raw materials, and equipment vary according to the tire type, it is common for tire factories to specialize in one or more tire types. There are many leading tyre brands such as Continental, Bridgestone, Goodyear and Michelin. However, other companies such as Pirelli, Yokohoma, and Sumitomo are expected to give a stiff competition to these brands that are more dominant in Malaysia. Malaysia, being the third largest rubber manufacturing country in the world, provides immense growth opportunities to tyre manufacturers, which are planning to establish tyre production facilities in the country. With easy availability of rubber and other resources, the market for retread tyre in Malaysia is also expected to register consistent growth in the next five years. The commercial vehicle tire segment dominates tyre-retreading


business in Malaysia, with retread tyres being used commonly in trucks and buses. Western Malaysia, comprising Kelantan, Pahang, Selangor, Perak and Negeri Sembilan provinces, accounted for around 90 per cent share, in volume terms, in the country’s tyre market in 2013. Having enhanced capacity and capabilities in producing tires of quality, coupled with aggressive marketing and brand development, Malaysia is amongst the leading global producer of tires with a wide variety of offerings for all industries.


Brief Description of Yuen Chuan Huat Tyres & Batteries Sdn Bhd

Yuen Chuan Huat Tyres & Batteries Sdn Bhd is an incorporated company founded by Yuen Chuan Huat in the year 1992. The company is located at Jalan Semabok in Melaka. The business’ activities include Tyre recapping, retreading and also repairing.

Besides all these, Yuen Chuan Huat also offers a wide range of tyres and

rims from the popular brand such as Silverstone. The company serves both products as well as providing services to customers. There were around 5-8 workers in the workshop, which include the owner’s wife, working as the manager managing the business’ performances, monitoring the workers and helpers who are in charge of repairing tires etc.

Yuen Chuan Huat started this business as he used to learn about tires

and how to operate them, his interest was there which brought him to start up his own business in this industry. There is no other branch for this company, this is the only company that he is running. The estimated current number of customers per day that visit his shop is around 10-20, depending on the day. Their estimated revenue per day is approximately RM 4000.


Brief Description of Hup Shun Tyres Auto Car Care Sdn Bhd

The company that we interviewed was Hup Shun Tyres Auto Car care Sdn Bhd. The interviewee was Ivan Ti, the current sales director of Hup Shun Tyres. They are currently located at PJS 11 and SS3. They have expanded their business by branching out the second outlet which is the one in SS3. There are 11 employees including 10 locals and 1 foreigner.

Hup Shun’s main products are tyres, sports rims, big brake kits and wheels. They provide services which include car care services such as suspension performance, brake performance and exhaust systems. The average amount of estimated customers per day is 20 with majority amount of adults which usually are businessmen.

The business was officially started in the year 1995 by the father of Ivan Ti, Mr Ti. There is no specific reason to start the business back then. Mr Ti used to work for his brother in a tyre shop and decided to start his own business after a few years. They have successfully developed the shop by extending from just 1 unit of the shop to 3 units.

To start up a business, around 300 thousand ringgit of capital is needed which includes stocks and basic machinery. In addition, the owner needs to be


specialized in knowledge to run this kind of business such as knowing the size of tyres, price range of tyres, materials of rims and tyres.

Even though they have great business, they are dealing with a lot of competitors in that area because of the strategic location. Their competitors are big companies like APEX, Kim Heng car Care Sdn Bhd and Michelin. To compete, Hup Shun Tyres advertise, sell their products at reasonable prices, make sure they always have ready stock as customers do not like to wait. Besides, they provide good customer services.

There are also some difficulties they face in running the business. According to Ivan, it is never easy finding a strategic location while strategic locations have very limited parking which leads to traffic issues, and therefore get complaints from the police. It is hard to find local workers as more foreigners are willing to work instead. He stated that business is getting tougher and tougher every year and having strong competitors are one of the reasons. Hup Shun Tyres make the business better by advertising though different sources such as the media – newspapers, magazines and facebook. They too have an official website for advertisement. For every 3 years, the supplier releases new designs of tyres and rims.


Strategies Employed by Yuen Chuan Huat Tyres & Batteries Sdn Bhd

Strategy Description Pricing

The prices of the products sold in Yuen Chuan Huat Tyres are reasonable and standardized as it depends on the type of products and services the customers want. The prices are mostly the same as compared to the competitors around.

Service and Product The main products and services sold in Yuen Chuan Huat Tyres are tyres, rims, car batteries, tyres recapping, retreading and also repairing services. They have large variety of tyres and sports rims of different brands for their customer to choose from. They obtain new types or tyres and designs of rims every 3 years once their suppliers release to them.

Customer Service Yuen Chuan Huat Tyres provides good and quality service to their customer. The owner and his wife help out in the shop too to supervise their workers to ensure they provide the best services and quality to their customers. The workers they employed are local so that they can communicate well with their customers since most of their customers are local.

Advertising Yuen Chuan Huat Company is often being complimented by the customers and are spreaded around the city through close friends, family and acquaintances. The name itself is making it popular and more demanded.


Strategies Employed by Hup Shun Tyres Auto Car Care Sdn

Bhd

Comparative Analysis of the Businesses’ Competitive Traits

Strategy Description Pricing The prices of the tyres are reasonable compared to other tyres

shop. Their pricing are also negotiable depends of the types and rims their customers want.

Product and services Hup Shun Tyre’s main products and services are tyres, sports rims, big brake kits, wheels and car care services. They have variety of tyres and sport rims for their customer to choose from. They restock their products every day, especially tires, to make sure they have sufficient stock and never run out of stock so that their customers do not need to wait. They will release new products and design every three months to attract customers.

Customer Services Most of the workers Hup Shun Tyres employed are local to make sure they can communicate better in different language with their customers. Hup Shun Tyres also provides excellent quality service to their customers. The owner and workers treat their customers with full respect and interact well with all the customers, besides having a good relationship with usual customers.

Advertising Hup Shun Tyres promote their business through Google to attract customers. Hup Shun Tyres also promote their business through Facebook page and having an official website. Besides updating their latest product on Facebook, they also use Facebook to interact with their followers and show what service they provide. Occasionally, Hup Shun Tyres also appear on magazines and newspapers.


Business 1 : Yuen Chuan Huat Tyres & Batteries Sdn Bhd

Yuen Chuan Huat was established in Melaka, a small city whereby many people start up their own businesses to make a living. Unlike most people, Mr. Yuen Chuan Huat, the owner of this company developed an interest in tires and car care during his younger age. He ventured into learning tires and the business industry eventually started up his own company. He opened up his company at the Semabok Area where there are several similar companies that are selling the same products and services as well. That area is quite popular for the demand of tyres and batteries. Residents in Melaka would know where to visit for tyres and batteries. There are around 3-5 of the similar companies in that area within the radius of 3km.


Competitor 1 : Sinwufu Enterprise Sdn Bhd

Competitor 2 : Chin Thye Tyre Trading Co.

Competitor 3 : Soon Hoe Tyre Service Centre

Sinwufu Enterprise is a company selling tyres and providing tyre services located just a few shops away from Yuen Chuan Huat. It provides services similar to Yuen Chuan Huat’s, therefore creating a very competitive situation. Sinwufu Enterprise not only serves as a reseller for the brand Bridgestone, but also for Silverstone in a different branch.

Chin Thye Tyres Trading Co. is located 500 metres away from Yuen Chuan Huat. This shop sells tyres, provides tyre repairing service and also car maintenance services. It is a much smaller shop

Soon Hoe Tyre Service Centre is a very old shop which provides tyre servicing and also a reseller for silverstone tyres. It is located just another lane away


Strategies Employed by Yuen Chuan Huat to Compete With Competitors

1 – Product Variety

2 - Advertising

The products of tyres and sports rims are always available in stock. Also, there are many varieties to be chosen from, this attracts customers as they have lots of choices to choose from, not having only limited choices. Different types of tyres, ranging from different sizes to different prices, different designs of sports rims are all available in the shop. The shop also provides car batteries, different car accessories and excess parts that customers usually demand for their car.

The awards and certifications received by the company are displayed in the shop where they are visible to the customers. Customers tend to get attracted to the shop as it shows high credibility, being awarded by the international brand, Silverstone as one of their best resellers in town. Those awards prove that the company is a trustable one.


3 – Pricing

The prices for the tyres are reasonable prices. The prices are standard and are always comfortable for any buyers to afford, making it affordable for everyone. The company does not raise up the price just to earn extra profit, but to keep it standard for customers to buy.


Business 2 : Hup Shun Tyres Auto Car Care Sdn Bhd

Hup Shun Tyres Auto Car Care was set up at PJS 11 in Subang Jaya in the middle of a bustling city of Kuala Lumpur. Mr. T used to work for his brother when he was younger and finally decided to start up his own business after several years of working. He opened up his first workshop in PJS 11, where there are a quite a number of similar workshops around as well. There are many car care workshops and also tyres resellers near the area, resulting in severe perfect competition. Under perfect competition, customers have a vast variety of choices to choose from, making the tyre shops competing against one another for more profit.


Competitor 1 : Kim Heng Tyre Services & Car Care Sdn Bhd

Competitor 2 : Sibujaya Auto Car Care Plt

Competitor 3 : Hoe Hing Tyres

Kim Heng Tyre is a certified tyre reseller and a car care center located just less than 1 km away from Hup Shun. It is its main competitor as told by Mr. Ivan during the interview, most of their customers are similar and they would compare the prices and services quality between the two companies. Kim Heng has large variety of tyres but less sports rims compared to Hup Shun.

Sibujaya Auto Car Care centre is the reseller mainly for LingLong Tires and is located just a few shoplots away from Hup Shun. Sibujaya often advertises its company through social medias such as Facebook. Sibujaya provides top to toe car care services in the automotive line.

Hoe Hing Tyres is a small tyre shop located right next to Hup Shun. It is operating on small number of products that are similar to Hup Shun’s. Besides selling tyres, Hoe Hing also sells sports rims.


Strategies Employed By Hup Shun Tyres Auto Car Care Sdn Bhd to Compete with Competitors

1 – Products Variety

Hup Shun Tyres is becoming one of Malaysia’s biggest market in wheels and tyres retailing centres with a “One Stop Car Service Centre” concept. Not many tyres and car care workshops in Malaysia have manifested this concept in their companies yet. Hup Shun does not only provide a large variety of sports rims and tyres, it also sells performance big brake kits, car body parts, suspension and exhaust systems and other car accessories. The price of the products and services are always reasonable and standardized. Besides that, Hup Shun also serves as an official sole distributor for the official Vossen Wheels and BC Forged Wheels in Malaysia.


2 – High Performance Car Repair & Services

3 – Advertising

Hup Shun provides car care services with superb quality. Together with the 10 workers, 9 of them are from local which really helps in communicating with the local people who often pay visit to the workshop. Hup Shun is also an official Meisterchaft Exhaust authorized dealer in Malaysia. Moreover, it also provides the best service and maintenance for its customers such as tyre recapping etc. Its highly trained team members consisting of 10 workers provide compromising services to all of their customers.

Hup Shun promotes its company through facebook pages, customer’s recommendations and having its own public website. Occasionally, Hup Shun Tyres would also appear on medias such as the magazines, newspapers and articles.


Obstacles Faced By New Businesses

Obstacles

Reasons

Lack of capital to start business

Starting up a workshop business that sells tires, batteries and services require huge sum of money as tires are quite pricey. Tyres servicing also require machineries that are expensive. There are no alternatives for tyres. Also, a workshop requires a more spacious shop which is more expensive than a small regular shop lot. It is hard to overcome as a sole trader because it is not easy to appeal loan from bank to have enough capital to start up a business.

Competitors

It is competitive to have a tyre and car care workshop in Malaysia as this type of shops are abundant in Malaysia and can be found anywhere. Furthermore, they are usually placed at the same area, serving the same purpose. It is hard to stand out among so many shops and be the best one because there are too many competitors out there.

Location and Usage of Space

It is important to choose a strategic place for a workshop because people tend to go to the nearest workshop available to fix their tyre or get a new tyre. There must be ample space for the servicing to be done and also for the products to be stored.

It is easy to overcome compared to the other obstacles as finding a good strategic place only requires some research and findings, not something very hard to do.


Nature of Their Markets

Both tyres and car care services shops are of perfect competition. There are a lot of tyres and car care services shop in Malaysia that sell products that

are mostly similar but not identical. For instance, there are many different types of tyres but the products are still standardized. Different types of tyres may differ from the sizes, shapes, designs, price and brand. There are many tyre workshops in Malaysia mainly because the barriers to entry are relatively weak,

which means that new firms can enter and exit the markey easily. Since there are many tyre workshops in the market, the competition is rather intense.

Therefore, the firms cannot charge a high price for its products or else customers will buy from its rivals. In other words, tyres and car care workshops generally have a weak pricing power.. For example, some workshops sell batteries, some sell bottled-petrol, some sell car accessories and so o Product differentiation results in customers developing attachment for their products. If customers have strong attachment, then it is harder for competitors to steal away the firm’s customer and profits.


Summary Table to Compare The Differences Between The 2

Businesses

Yuen Chuan Huat Differences HupShun 1992 Year Founded 1995

Yuen Chuan Huat Founder Mr T 4940, Jalan Semabok, 75050,

Malaka, Malaysia

Location No.11,JLN PJS 11/7 Bandar Sunway 46150 Petaling Jaya

Selangor

Around RM 3 to 4 thousand Dai ly Revenue Around RM 5 to 10 thousand 0 Branch 1 2 Units of shops 3

Less than 10 Number of employees 11 Around 15 a day Number of customers Around 20 a day

3-5 Number of competitors

More than 5

7am-7pm Business Hour 9am-6:30pm Through recommendation of

customers and friends; Awards received

Advert ising Through media, magazine and newspapers

More improve services and quality of products

Future plans Extend the business and improve service and quality of products

Sports rims, different brands of tyres, car batteries, tyre services

Type of products and services

Different brands of tyres, car sports rims, exhaust systems, suspensions,

tyre services

Lead by owner and his wife Leaders Lead by the owner and his son


Summary Table to Compare The Similarities Between The 2

Businesses

Yang Chuan Huat Similar it ies Hupshun 1 Number of founders 1

Family influence What prompted to start this business

Family influence

tyres Main products tyres

Businessman Main customers Businessman

Provide good services and quality products

Strategy Provide good services and quality products

Home base Business operation Home base

Around 300k including machinery

Capital is required to start this business

Around 300k including machinery

Depends on the season Best sel ler Depends on the season


Conclusion of Analysis

Based on our analysis and research on both tyres’ business in Melaka

and Klang Valley, the business that is more commercially successful is Hup Shun Tyres Auto Car Care Sdb Bhd. Although Yuen Chuan Huat Tyres and Batteries sdb bhd has been established earlier than Hup Shun Tyres Auto Car Care Sdn Bhd, however Hup Shun Tyres provides more professional, consistent and quality services at affordable prices to their customers. Other than that, Hup Shun have more variety of tyres and sport rims compared to Yuen Chuan Huat. This shows a strong advantage in order to attract more customers.

Other than that, Hup Shun has 3 units of shops compared to Yuen

Chuan Huat only has 2 units of shops. On the other hand, Hup Shun has official website on the internet and Facebook page to advertise their latest products to attract customers. The services provided by Hup Shun are more quality and faster because they have more workers and all their workers are well trained. Most importantly, Hup Shun makes certain that the stocks are always sufficient, as customer do not like to wait.

Therefore, Hup Shun is more commercially successful than Yuen Chuan

Huat.


Recommendations

Business 1: Yuen Chuan Huat Tyres & Batter ies Sdn Bhd

Although Yuen Chuan Huat Tyres & Batteries’ business is doing fine, they have rooms for improvement to make the business better. Not being in city area, their business might be small but rich of history.

Area of Improvement Recommendations Not active in promoting They should distribute flyers or brochures

around to nearby housing areas or shop lots, places with lots of people to promote the shop and for more people to discover the existence of the shop. Besides that, investing in a newspaper advertisement is also an ideal way to increase its publicity.

Regular customers To make sure the company does not only receive business from its regular customers but also from first-timers, a recommended way to improve this problem is to expand their business by branching out to more than 1 shop lot in a different area to gain more customers.

Size of Shop The size of the shop lot limits the number of vehicles and customers that can fit in the shop. There is also insufficient space for customers to park their cars. It is recommended to extend the size of the shop lot so that more people are willing to visit the shop if it is more spacious.

Waiting Area Facilities There is no air-conditioned waiting area for the customers and also very limited seats for them to wait for their car services. This will cause the customers to feel impatient. It is recommended to install an air-cond in the waiting area and also put a few more seats for the waiting customers.


Business 2 : Hup Shun Tyres Auto Car Care Sdn Bhd Although Hup Shun Tyres Auto Car Care is in a good business performance and is located at a strategic place, there are still some improvements that can be made to further improve the business performance.

Area of Improvement Recommendations Waiting Duration Keeping customers waiting in line to get

their vehicles fixed can be tiring if it takes a long time. To increase efficiency, Hup Shun should hire more workers to help speed up the work and also to ensure customers are satisfied with the quality of services. Of course, a faster service will attract more customers compared to a slow-paced one.

Location Hup Shun is indeed located at a very strategic place with lots of competitors but that also means parking becomes a big problem. Customers often complain there is no space for them to park their vehicles. In order to solve this, Hup Shun should make a specific land of space mainly for their customers to park their car so that they do not have to search for parking in such a hard way.

Employees’ Performance Hup Shun should train their employees to a much qualified and better standard in order to compete with the others. Having trained workers can improve efficiency in their work and also gaining more trust from customers who send their cars in.


Appendix 2 :

Yuen Chuan Huat Tyres and Batteries Sdb Bhd Date: 31th October 2015 Time: 3:30pm-4:00pm Location: 4940, Jalan Semabok, 75050, Malaka, Malaysia Interviewed Person: Owner’s Wife, Tay Siew Ling Job position: Manager Office Phone Number: +60 6-283 8617 Q: When was the business founded? A: It was founded in 1992. Q: Who are the key founders? A: The key founder of this shop is Yuen Chuan Huat. Q: What prompted the founders to start this business? A: Last time the owner was working with his brother and learn about changing tyres and rims. So he later started this business on his own after working for a few years with his brother. Q: What are your main products? A: Our main products are car tyres, rims and car batteries. We do provide services such as recapping, retreading and also repairing services for tyre. Q: Who are you customers? A: Our customers are mostly businessmen. Q: How many branch offices do you have? A: We don’t have any branch office. Q: Can you provide us a brief history of your business and its most recent developments? A: As I mention before, the owner was working with his brother for a few years. He later starts this business on his own. Q: Do you have many competitors? Who are they? Who are your top 3 competitor? A: We have quite a lot of competitors as there are lot bigger and popular shops in this market. The top 3 competitors are Soon Hoe Tyres, Chin Thye Tyres Trading Co and SinWuFu Enterprise Sdn Bhd. Those 3 competitors I mention just now are the competitors around this area as there are a lot more in this area.


Q: Is the business constantly facing strong competition from other competitors? What strategies have they used to compete with you? A: Yes. The strategies used by other competitors are mostly the same that is lower the price of the products to attract customers. Customers always want something cheap for the products so our competitors keep on lowering down the prices which affected the market price. Q: How much capital is required to start this business? What, if any, specialized field of knowledge do you need to run this business? A: Around 300k including stocks and machines. The knowledge to run this business is how to operate about tyres, rims and batteries. Q: Generally, do you feel it is easy or hard to enter this market? Why? A: It becomes harder as there are a lot of competitors around this area. The capital required to enter this market is quite expensive. The machines are very expensive. There are a lot of competitors in this area. Q: How do you compete with your competitors? What strategies do you employ to divert customers away from your competitors? A: The strategies we used are customer service and pricing. We provide a good customer services to our customer so that they will return. We want customers who return so that our business will be consistent. The second strategy is price of our products. We keep our pricing same as the market so that it will not be too expensive and too cheap which will influence the market price. Q: How much is the business annual revenue figure? A: I am not sure about the annual revenue figure but I can say that it was depends on the number of the customer. We could earn at least RM 4000 per day. Q: How often do you release a new product? A: It depends on the factory. When the factory has released new products, we will release it after we get the stock. Q: Are your pricing decisions strongly affected by your competitors? A: Yes. It is to ensure that our price of our products and services are not too expensive in the market.


Hup Shun Tyres Auto Car Care Sdn Bhd Date: 17 November 2015 Time: 12:30pm – 1:30pm Location: 11, Jalan PJS 11/7, Bandar Sunway, 47500 Subang Jaya, Selangor, Malaysia Interviewed Person: Mr. Ivan Job position: Sales Managing Director Office Phone Number: +60 3-5632 9926 Q: When was the business founded? A: It was founded in 1995. Q: Who are the key founders? A: The key founder of this shop is Mr. T. Q: What prompted the founders to start this business? A: The owner used to work for his brother when he was younger and learnt about changing tyres and rims. So he later started this business on his own after working for a few years with his brother. Q: What are your main products? A: Our main products are car tyres, sports rims. We also have some car accessories, bottled petrols, and also provide services such as tyre fixing and car care services. Q: Who are you customers? A: Our customers are mostly businessmen. Q: How many branch offices do you have? A: 1 branch. Q: Can you provide us a brief history of your business and its most recent developments? A: The shop was started by my father, as mentioned and it used to be a small business with one unit of shoplot. Slowly, we extended our business to 3 units and there is also another branch in SS2. Q: Do you have many competitors? Who are they? Who are your top 3 competitor? A: We have a lot of competitors especially in this area where most of them are selling the same products. Main competitors are Kim Heng, Sibujaya and Hoe Hing Tyres. All these shops are just located around the area. Q: Is the business constantly facing strong competition from other competitors? What strategies have they used to compete with you? A: Yes. The competition here is rather intense. We only try our best to keep our own regular customers to provide them the best and also some walk-in


customers. I’m not so sure what strategies they used but they usually lower down the price when the customers bargain. Q: How much capital is required to start this business? What, if any, specialized field of knowledge do you need to run this business? A: We used around 300 thousand ringgit, that includes our stocks and machines. Knowledge such as price of tyres, size and types of tyres are all basic knowledge to run this business. Q: Generally, do you feel it is easy or hard to enter this market? Why? A: It is indeed harder to enter this market right now since the capital to start up this business is not a small number. It is definitely getting harder year by year. It is also harder for us because we hire local workers and now it is hard to hire local workers that are interested in these kind of jobs. Q: How do you compete with your competitors? What strategies do you employ to divert customers away from your competitors? A: We always keep our products in stock, to ensure customers always get what they want and we provide quality services such as one stop service concept. We have large variety of tyres to choose from. Q: How much is the business annual revenue figure? A: I’m really not sure about the annual revenue but there are around 20 customers per day that visit us. Q: How often do you release a new product? A: Oh, we do not release any new products but we receive newly designed products from our prompt suppliers every 3 years. Q: Are your pricing decisions strongly affected by your competitors? A: Yes, definitely. Most of us here have the same products and we sell for the same price range. It does not go beyond or below that range of price.


Appendix 3 : Comparative Analysis Summary Table

Competitive Traits Business A (Yuen Chuan Huat Tyres in Melaka)

Business B (Hup Shun Tyres in Klang Val ley)

1. Number of Competitors 3 to 5 5 to 10

2. Barriers to Entry Weak barriers to entry. The firm can enter and exit the

market easily.

Weak barriers to entry. There is 0 barrier. Business

can enter and exit the market anytime.

3. Differentiated or

Standardized Products Standardized products.

The business sells tyres and car batteries.

Standardized products. The business sells tyres,

sports rims, bottled petrols and several car accessories.

4. Pricing Power Price taker. The business

cannot charge a higher price for its products as most of the

price are standardized and fixed. If the business charges a

higher price for its products, customers will buy from

another firm. Customers will only buy at the lowest price.

Price taker. The business cannot charge a higher price

for its products as most of the price are standardized and

fixed. If the business charges a higher price for its products,

customers will buy from another firm. Customers will only buy at the lowest price.

5. Other Characteristics Mutual dependence.

The business depends on family and friends to spread

the word about the business. The business promotes its business through friends’

recommendations and such.

Constant advertising. The business uses media to

promote its business such as newspapers, magazines and

even on Facebook.

6. Verdict Perfect competition. Perfect competition.


Appendix 4 :

Minutes of the Meeting of Business 1 :

DATE : 31 October 2015 TIME : 3:30pm – 4pm

VENUE :

Yuen Chuan Huat Tyres 4940, Jalan Semabok, 75050, Malaka,

Malaysia

Minutes of the Meeting of Business 2 :

DATE : 17 November 2015 TIME : 12:30pm – 1:30pm

VENUE :

Hup Shun Tyres 11, Jalan PJS 11/7, Bandar Sunway,

47500 Subang Jaya, Selangor, Malaysia!!

Names of Group Members Tutorial Group Role Chloe Sim Tiing Ern Wednesday Group Leader

Rachel Yeo Chi Xuan Wednesday Group Member

Karen Choo Qiao Ying Friday

Group Member

Melvyn Poh Ern Meng Wednesday Group Member

Lee Zhi Ang Monday Group Member


No. Activity Action taken by

1. Tyre shop selection in Melaka - Arranging appointment time with the

owner

Lee Zhi Ang

2. Assigning of Tasks - Interview Questionaire

- Videographer - Taking down notes

- Photographer

Chloe Sim Rachel Yeo, Melvyn

Poh Karen Choo Lee Zhi Ang

3. Report - Artistic Cover

- Comparative Analysis of Competitive Traits

- Summary table of the Differences of 2 Businesses

- Brief Description of Business A - References

Melvyn Poh

4. Report - Group coordinator

- Overall grammatical structure correction - Appendices

- Minutes of the meeting - Nature of their markets

- Compilation

Chloe Sim

5. Report - Brief Description of Business B

- Recommendations - Obstacles faced by new businesses

- Analysis of Businesses

Rachel Yeo

6. Report - Strategies employed by 2 businesses

- Conclusion of Analysis - Interview Questionaires

- Summary tables of comparison of 2 businesses

Karen Choo

7. Report - Compiling photos

- Business’ Competitors description - Strategies employed by businesses - Strategies employed by competitors

Lee Zhi Ang


Appendix 5 : Name Cards

Business 1 : Yuen Chuan Huat Tyres & Batteries Sdn Bhd



Appendix 6 : Photos

Business 1: Yuen Chuan Huat Tyres & Batteries Sdn Bhd


Bibliography

Center of Academic Success. How to write a report.2011.Wed.24 Nov.2015 Demand Media, Challenges of starting a new Business. Houston : Houston Chronicle,2015 University of Camberra. AdminCMS. 2015. Wed.24 Nov.2015


References

Economicsonline, (2015) Perfect competition [Online]. http://www.economicsonline.co.uk/Business_economics/Perfect_competition.html (viewed on 19th of November) Facebook, (2015) Hupshun Tires [Online] https://www.facebook.com/HupShun-Tires-195131380566062/ (viewed on 18th of november 2015) Hupshuntyres ,(2015) Hupshun Tyres Auto Car Care Sdn Bhd [Online] http://www.hupshuntyres.com/ (viewed on 21st of November 2015) Tyrepress, (2015) Malaysian tyre market to grow 9% (CAGR) in next five years [Online]. http://www.tyrepress.com/2014/11/malaysian-tyre-market-to-grow-9-cagr-in-next-five-years/ (viewed on 20th of November 2015)

final econs report

Automotive