SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN

FOUNDATION IN NATURAL AND BUILT ENVIRONMENT

AUGUST INTAKE 2014

A COMPARATIVE ANALYSIS OF 2 BUSINESSES OF SIMILAR INDUSTRY IN

DIFFERENT GEOGRAPHICAL LOCATIONS - FOOD INDUSTRY

GROUP MEMBERS:

JACK NG WAI KHONG 0317980

YEO DOR EEN 0316224

CHAN PEI SHAN 0318350

LEE JIAN RU 0318132

SUBJECT: PRINCIPLES TO ECONOMICS (ECN 30205)

LECTURER: CHANG JAU HO

SUBMISSION DATE: 1 DECEMBER 2014

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Table of contents

NO. CONTENT PAGE

1. KEY SUMMARY 3

2. BRIEF BIO OF THE BUSINESS 4-7

3. COMPARATIVE ANALYSIS OF THE

BUSINESSES’ COMPETITIVE TRAITS

8-13

4. RECOMMENDATION 14

5. APPENDICES 15-16

6. REFERENCE 17

Key Summary

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Nowadays, businesses are prevalent in capitalist economy. Without good

economy, people are not able to lead a good life and have a proper education. In

this assignment, we are required to do a comparative analysis of two businesses of

similar industry in different geographical locations.

Our group consists of four members- Jack, Doreen, Pei Shan and Jian Ru.

We chose food industry as our topic since food industry plays an important role in

business world nowadays. There are too many varieties of food in the market, so

we decided to make our topic specific. Noodles restaurant has been chosen for our

research.

Noodles are popular among people with different ages and noodles shops

can be found everywhere. For our research, we had chosen two noodles shops in

Seremban and Klang valley. They are Yee Kee Beef Noodles (Seremban) and

Sarawak Noodles House, SS15 (Klang Valley).

We carried out research and went for an interview in these two noodles

shop. After that, we made a comparative analysis between these two businesses.

From all the researches and interviews we have done, we are able to understand

how the business flow and we show our knowledge and understanding about the

business in the report.

BRIEF BIO OF THE BUSINESSP a g e 3 | 17

NAME: YEE KEE BEEF NOODLES

LOCATION: No. 92, Jalan S2 D32,

Seremban 2, 70300

NUMBER OF BRANCHES AND EMPLOYEES: They have 3 branches where 2 is located in Seremban and the other one is located in Kuala Lumpur. Hence they have up to 50 employees altogether in 3 branches.

MAIN PRODUCTS OR SERVICES SOLD: The main dishes they sold is Seremban Beef Noodles that they been selling for 2 generations. The side dishes they sell are Penang Prawn Mee, Ipoh Chicken “Hor Fun” and etc.

ESTIMATED CURRENT NUMBER OF CUSTOMERS: For weekend, the customers will be crowded in the morning until afternoon where almost 50 to 60 customers, and slowly the amount of customers start to shrink in the evening. As for weekdays, the customers will be not as much as in the weekends, where estimated 30 to 40 customers per day, but the amount will be changed due to certain circumstances.

WHEN WERE THE BUSINESSES FOUND? : The business had already

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been passed down by two generation until now. So they decide to repackage the whole business from a small stall to a bigger restaurant, so that the customers can have a better space to enjoy the services and foods served.

WHO ARE THE FOUNDERS? : The founder is called Poon Yee. He is the original founder. Poon Yee is actually a China man, who came from China last time. So now he is old. That’s why the name of the shop is Yee Kee after his name.

WHATS THEIR MOTIVE FOR STARTING THE BUSINESS? : The business had been continuing for all these years but it’s on a small scale so called stall, we kind of give in new packaging, a new concept where it is natural, but for restaurant to survive cannot sell only one item. So we need a few more items, we give in a concept and we give in an identity.

WHATS THEIR RECENT DEVELOPMENT? : We will be continuing in Seremban, but we would like to spend more to KL, so that this type of beef noodle will be more well-knowned, because now this type of beef noodle like dry beef noodle, mostly famous in Seremban. Outside Seremban you hardly find it. The mee is called Lai Fun, it is mee but actually it is made out of pure rice. Inside is not hollow, so it is smooth.

NAME: SRK NOODLE HOUSE

LOCATION: 84, Jalan SS 15/4b,

47500 Subang Jaya, Selangor.

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NUMBER OF BRANCHES AND EMPLOYEES: Now they have only one main

restaurant, but in the following December, a franchise will be opening soon in SS2,

Petaling Jaya. They only have 12 employees in the restaurant that includes the

chef and waiter.

MAIN PRODUCTS OR SERVICES SOLD: The main dishes they sell is Sarawak Kolok Mee which is the famous dish in the restaurant, and now they have

invented a few dishes, like “Ma Lat” Kolok Mee.

ESTIMATED CURRENT NUMBER OF CUSTOMERS: Since SS15 is quite a strategic place, where it placed nearby of 3 university and 1 private school, and also located at an urban area, so in the weekdays, the traffic there is chaos, which means there is a lot of customers especially in the weekdays and in the weekends. They estimate serve more than 60 customers per day as what I heard from the restaurant owner. The customers are mostly students, employees

and senior citizens as well.

WHEN WERE THE BUSINESSES FOUND? : The business were found by the owners father’s father, which means grandpa, and its passed on to 3 generations.

WHO ARE THE FOUNDERS? : Originally the mee is from Sarawak and had already bring down

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for three generation (by his grandparents), the ingredients used had never been reduced. Although I am in Kuala Lumpur, but I still use the original Sarawak ingredients to make it, so I can kept many of the customer from Sarawak here.

WHATS THEIR MOTIVE FOR STARTING THE BUSINESS? : I manage this business from Sarawak to Kuala Lumpur, to do this business. I also have no idea how to manage it, but the only reason I did this business is how I make this bowl of mee that makes the customers feel worth it. You will have a lot of market competition. It is even more difficult to compete with them, so I never take this business as a market competition. For example, in KL, there is many coffee shops, but mainly the food is from Sarawak and Penang. But the distance from Sarawak to KL is only 2 hours. But why there is no businessman from Sarawak approach KL and start the business. Firstly, which is the soy sauce in KL is different with Sarawak. I also used a year in KL to find out the originality of soy sauce.

WHATS THEIR RECENT DEVELOPMENT? : Very fast, the second franchise will be soon opened in December at SS2.

COMPARATIVE ANALYSIS OF BUSINESSES’ COMPETITIVE TRAITS

i) NUMBER OF COMPETITORS

For the beef noodle shop located in Seremban which is also known as “Yee Kee Beef Noodles” has only one main competitor around the area whereas for the Sarawak noodles located at ss15 and the shop’s name is “Srk Noodle House” has a lot of competitor at the area as there are a lot of food shops around the area which are cheap. This is due to the fact ss15 is a hotspot for college students as there are a few colleges located around the vicinity of ss15 and hence a lot of food shops at ss15.

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ii) THE MARKET SHARES OF THE BUSINESS

The market shares of the businesses that we interview have slight difference, where for “Yee Kee Beef Noodles” he holds the half of the share of the restaurant since his shop is the second franchise but still he is under the same family as well, so he holds half of the restaurant shares. As for “Srk Noodle House”, he hold all of the shares of the business because he is the owner of the restaurant and the main franchise of the restaurant.

TOP COMPETITORS

The top competitors of “Yee Kee Beef Noodles” is Restaurant Yi Poh.

Hence, for “Srk Noodle House” has several competitors like Cosans Coffee shop, Burgertory and etc.

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iii) BRIEF BIOS OF EACH BUSINESS’

At Seremban, they only have one main competitor and that is the Restaurant Yi Poh which sells claypot Lou Xu Fan. The Lou Xu Fan is unique because unlike the Lou Xu Fan that can be found at Kuala Lumpur which are in pieces which looks like mouse tails as the name states, the Lou Xu Fan found in Seremban are all connected together like noodles but the texture and taste is exactly the same as the Lou Xu fan found in Kuala Lumpur. A lot of food critics have went and tried the Lou Xu Fan at Restaurant Yi Poh and all have given a positive feedback after trying it. This is the reason Restaurant Yi Poh is the beef noodles main compeititor. On the other hand, for Srk Noodle house, the 3 main competitors are Foh Foh food court which is famous for its fried rice at a reasonable price, 96 restaurant which sells mixed rice where you can

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feast like a king at a very cheap price and Ooi noodle house which sells pork noodles and even though the price of the Ooi noodle house is slightly more expensive than the Srk noodle house which they sell at RM7.00 per bowl but serves in large portions and is has been said it is a place for pork lovers. So to enter the food business at ss15 is not easy as all these restaurant have not only been around for a long time which means they have a lot of regular customers but they are very cheap and delicious as well. Hence, these are the top 3 main competitors for the Srk noodle house.

iv) STRATEGIES OF COMPETITIONS AMONG BUSINESSES

For the business in Seremban which is the beef boodles, how they compete with their competitors is that they venture more to the social media to attract the attention for most of their customers for example, they have created a Facebook page so that more people will know more about the beef noodles located in Seremban. This is because most people in the world have a Facebook account. Their business is currently categories as quite successful as they have a constant amount of income every year and they currently have 2 branches which are both located in Seremban but there will be a new branch which is venturing more towards Kuala Lumpur. As for the Srk noodle house, how they compete with other competitors is through winning the hearts of their customers by setting an extremely low price for one bowl of noodles whereas it provides a lot of comfort for their customers such as a television to watch while eating and an air conditioners for their customers while waiting so they do not feel the heat. The business was not doing very well at the beginning but business has recently gotten better for them but they are still trying to cover up for their loss. The business is currently going to open another branch which will also be closer to the city.

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v) OBSTACLES FACED BY NEW BUSINESSESThe main obstacle faced by businesses today is there are too many food businesses and it is hard to enter as a new market. This is because there are a lot of old food businesses with successor that they have already been taught their techniques to their successor in hopes their food will live on for years to come. Hence, the older food businesses would have regular customers and it would be harder for the locals to be attracted to the new business as they fear it is not worth the money and the locals have already gotten use to the taste and flavour of the older business and it is harder for other people to change their preference one they have gotten use to the old one. In conclusion, it is not easy to overcome this barrier which has been made by the older business and the new business are required to work even harder to be able to compete with the other businesses.

vi) NATURE OF THE MARKETSThe nature of the market of the “Yee Kee Beef Noodles” is that they have a monopolistic competition and this is due to the fact it has only one main competitor. The nature of the market of the Srk noodle house is perfect competition. This is due to the numerous number of competitors at ss15 such as Ooi noodle house, Foh Foh food court and many more.

vii) SIMILARITIES AND DIFFERENCES

Name of Yee Kee Beef Noodles Srk Noodle house

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business

Similarities 1) Both of the noodle shop do not raise the price of their food at will because both of them have regular customers.

Differences 1) The view point of this shop is to try to earn money and constantly trying to attract new customers to come. This shows that the food stall focuses on trying to earn money.

2) The shop has a set menu to order during certain periods of time such as the breakfast set menu as well as the lunch set menu.

3) The shop is making good profit every year which is RM84,000 annually. This shows that the business is very stable.

1) The way the owner views his business is not to earn money but is to try to create a comfortable environment for his customers and he constantly thinks of how to make his food taste better for his customers this could be known as comfort food for his fellow customers as well keeping the price low for his customers.

2) The shop does not provide any set menu.

3) This shop is suffering from a loss due large amount of facilities provided such as an air conditioner and a television but the price of one bowl of noodles does not cover up the cost of all the facilities provided.

viii) CONCLUSIONBased on my group’s analysis about both the noodle shop we interviewed, we have concluded that “Yee Kee Beef Noodles” at Seremban is more successful than the” Srk noodle house” which is located at ss15. The main reason is because one bowl of noodles sold at Srk noodle house suffer a

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loss of RM 3.00. The loss from each bowl of noodle is because the owner of the noodle shop is selling one bowl of noodle for the price of RM5.50 but his accountant told him that he needs to sell one bowl of noodles for at least RM8.50 to earn some profit as the owner wanted to install a television as well as an air conditioner to his shop for the comfort of his customers but he stuck to his principles and kept the price at RM5.50 per bowl. Besides that, another reason the beef noodles is more successful than the Srk noodles is because the beef noodle has been in business longer than the Srk noodles. The beef noodles has a 10 year experience in the food industry and even though the Srk noodle has been done for 3 generation, it has been repackaged and moved elsewhere several times and has been in the food business at ss15 for 3 years only. Thus, the beef noodle shop is more renown than then Srk noodle shop. The beef noodles also has a franchise at Seremban 2 which is the new side of Seremban and it will soon branch out to Kuala Lumpur and since the beef noodles have been in the business longer, it has more regular customers than then srk noodles. Hence, this proves that the beef noodles is more successful than the srk noodles.

RECOMMENDATIONBased on the analysis of two shops we interview, we learnt quite a lot of knowledge regards about how businesses being managed, how the elements of businesses which is plan, organize, lead and control had taken place in the process of

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business, the obstacles they faced when there is a downfall, how to change the prices of products based on market price and a lot of it which can’t be mentioned.

Different people have different ways to manage their business as some of them treated business as a way to be filthy with profits earned, some of them is to inherit the business where their parents left and even some of them make business as a dream of theirs.

But still the recommendation I give on improving the competitiveness for each business with proper justification. Firstly, for them to compete with the market, they need to have certain skills and strategies so that they won’t struggle from loss, like for example which is the marketing skills obtained. Like how you promote your products, services and of course your restaurant. So the main way to promote your business is through social media, like for example which is Facebook and Twitter as promotion. Through Foursquare and Swarm is another to promote your marketing by checking in the location. Advertisement on television and radio can also help a lot by attracting customers to approach you.

Secondly, we need to research the overall market, where we can discovered the hidden strength and weakness of our competitors or even our own businesses as well. After you analysis everything, then you need to compare between your business and other businesses so that you can know what to improve and improvised for your business, so that you can monopoly the whole market as well.

APPENDICES

Facebook Page

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Photo of restaurant interview and competitors (Premises, Products, Services)

All the photos is included on the slides above: Brief Bio of the restaurant interviews section &Top Competitor section.

Interview Videos (YOUTUBE LINK)1) https://www.youtube.com/watch?v=G0SQZfn9Ufc (BRIEF BIO

VIDEO)2) https://www.youtube.com/watch?v=2vMCVZFe6OU (COMPARATIVE

VIDEO)3) https://www.youtube.com/watch?v=7n21w3Xmcik

(RECOMMENDATION & CONCLUSION VIDEO)

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REFERENCES1) Yee Kee Signature Dish. Assessed on 30/11/2014:

http://ivanyeekee.getmybusinessonline.com.my/_image?album_id=ah1zfmdvb2dsZS1idXNpbmVzcy1zaXRlYnVpbGRlcnIQCxIKUGhvdG9BbGJ1bRgCDKIBJWl2YW55ZWVrZWUuZ2V0bXlidXNpbmVzc29ubGluZS5jb20ubXk&image_index=2&pp=home

2) Sarawak Noodles. Assessed on 30/11/2014:http://www.mydeliciousfoods.com/only-rm11-for-sarawak-cuisine-set-meal-main-dish-dessert-for-2-persons-at-srk-noodles-house-subang-jaya/

E-BOOK & BOOK REFERENCES1) Author unknown. (2011). Defining and measuring oligopoly, Retrieved on

30 November, 2014 from http://www.economicsonline.co.uk/Business_economics/Oligopoly.html

2) Buchhoitz,K. (2009). Business & society. South-Western/Cengage Learning.3) Business today , (2001). Twenty First Century Media.

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