overall report (1)

3

SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN FOUNDATION IN ELEMENT AND BUILT ENVIRONMENT

Group members’ names Student IDYee Algel 0315890Thun Shao Xun 0315919Siau See Sing 0315926Chin Tze Wei 0315767Tee Hing Nian 0316316

Subject: English 2(ENGL 0205)

Assignment Title:

A comparative analysis between two businesses of similar industry but in

different geographical location.

Word count: 2790 words

Lecturer: Miss Cassandra Wijessuria

Submission date: 5th June 2014

1

Table of contentContent Page

Cover Page 1

Table of Content 2

Key Summary 3

Brief Bio of the Business 4-6

Comparative Analysis of the Business’s Competitive Traits 7-13

Recommendation 14-15

Appendices 16-25

References 26

2

Key summary

Malaysia is a place fill with fun and information in terms of shopping, dining and business center. It is very convenient for us to find a restaurant, cafe and local product shop in Malaysia. With a simple task, we were given an assignment to compare and make an analysis of two businesses within the same industry but in different geographical locations.

We chose Penang and Klang Valley on local product shop for our comparison. The local product shop we chose in Penang is Tean Ean Local Product which located is in Gurney Drive, a tourism place. On the other hand in Klang Valley, Selangor, we chose Sin Hup Heng local product which is located at Jalan Meru. After completing the comparison and analysis report, we found out that Tean Ean Local Product shop is more attractive and a commercially successful business compare to Klang Valley Sin Hup Heng local product shop.

3

Brief Bio of the Business

Tean Ean Local Products (Penang)

I. Their names:

The pastry shop that we have interviewed in Penang was Tean Ean Local Products. The interviewee for the day was Teh Kok Chee.

II. Current Locations:

Tean Ean currently has no other branches other than this. That is located at 90 Jalan Sultan Ahmad Shah in Georgetown, Penang along the junction between Gurney Drive

and Northam Road.

III. Number of branches and employees:

Tean Ean currently does not expand out any branches so far. In total it has 20 workers and 10 staffs under their employment list.

IV. Main Products:

The shop signature main products are mainly Bah Kut Teh ingredients and its freshly baked Tau Sar Pneuh Pastries. Tau Sar Pneuh is also known to some as Tambun biscuits or Dragon-ball biscuits due to its shape and nutmeg products. Trust me you will not regret it once you have finally got your hands of it. Below is a list of others flavors it offers:

1. Original Flavor- Small (16 pieces/Rm 5.70), Large (32 pieces/Rm 9.60)

2. Pandan Flavor- Small (16 pieces/Rm 6.20), Large (32 pieces/Rm 10.20)

3. Coffee Flavor- Small (16 pieces/Rm 6.20), Large (32 pieces/Rm 10.20)

4. Coconut Flavor- Small (16 pieces/Rm 6.20), Large (32 pieces/Rm 10.20)

5. Sambal Udang Flavor- Small (16 pieces/Rm 7.20), Large (32 pieces/Rm 12.20)

V. Who and when was the business founded:

Tean Ean was proudly founded in 1995 by Mr. Teh Tatt Huat after learning a special recipe from an old Tau Sar Pneah master chef.

4

i. What was their motives for starting up the business?

At first the owner actually thought of selling cars. After a few thoughts he decided to set up their own pastry business. Since he was so eager to learn how to make it, he decided to hire chef to teach him the way. At first most of the ingredients needed to make it are bought from others but now he is able to apply the knowledge he has learnt to good use by making it out himself.

ii. Their recent development:

Tean Ean has recently reached its target of making a total profit of Rm 2 million in 2012 with the help of modern machineries that have helped to speed up the production processes. It also goes to its Open Kitchen Concept. It is to reveal to the customers that no preservatives are used and that orders are freshly made for deliveries. This has resulted in Tean Ean coming leap and bounds that includes expanding its concept to Kuala Lumpur and Johor.

Sin Hup Heng (Klang Valley)

1. Their names:

The Pastry shop that we have interviewed in Klang Valley is called Sin Hup Heng. The interviewee for the day was Mr. Lee, the founder.

2. Current Locations:

Sin Hup Heng currently boast one and only one shop in Klang Valley. It is located at 114, Jalan Pekan Baru, Kawasan 17, Jalan Meru, 41050 Klang, Selangor.

3. Number of branches and employees:

It has a total number of more than 10 workers in his and only branch in Klang Valley.

4. Main Products:

The shop’s signature product is the “Biscuit Beh The Sor” that costs around RM 8 per box.

5. Who and when the business was founded:

Sin Hup Heng was actually founded by Mr Lee himself. He started from a small stall in 1974 and later, the shop was expanded into a bigger one.

5

6. What were their motives for starting the business?

The owner was purely motivated to be involved in this business due to the fact that he was lazy to study anymore. So his father just insisted him to learn some skills so to be able to support himself and earn a living when he grew older. In the end, he chose to learn the necessary skills needed to make traditional Chinese pastries.

7. Their recent developments:

Sin Hup Heng was able to employ better machineries from the substantial amount of money made available to them.

6

Comparative Analysis of the Businesses’ Competitive Traits

Number of competitors:

Tean Ean Local Products

In Penang, there are at least 36 Bakeries and Pastry shops found. However, specifically there are around 22 competitors located at George Town in the market. But there is one notable rivalry between Tean Ean Local Products and Ghee Hiang.

Sin Hup Heng

Initially in the Klang Valley, there used to be around 30 Bakeries and Pastry shops. But since then it has been reduced to just a mere 3 competitors. According to the shop owner, this is because the younger generations do not want to continue the biscuit businesses because it is very tough, tiring and competitive.

The market share of the business:


Unfortunately they did not disclose it out to us and we respect their privacy.

Sin Hup Heng

The money it has earned is able to support the business but it all depends on the customers on any given situation as it is their decision that depends whether a business will succeed or fails.

7

Brief bios of each business’ top competitor/s:


The rival business that is currently competing with them is Ghee Hiang. Ghee Hiang was originated from the Fujian Province, China Since 1856 but has since become an integral part of Penang, Malaysia with its colourful heritage and mesmerizing traditions. The shop is famous for its Tau Sar Pneah biscuits (green bean pastry) and sesame oil.

At 155 years old, it is one of the oldest bakeries around and a box of one of their traditional handmade Chinese biscuits or a bottle of their traditional sesame oil will make a great souvenir. Ghee Hiang themselves have four main branches that are located at Burmah Road, Beach Street, Sunshine Farlim, Lot 10, Hutong Village, KL and their Headquarters at Macalister Road.

Sin Hup Heng

Lian Bee Confectionery Sdn Bhd

Founded in 1963, Bee's has come a long way striving for sustainable improvement and unparalleled excellence in the bakery business. Starting from a humble family-based venture, the company has successfully carved a niche in their own right with sheer grit and determination spanning four generations. Lian Bee mainly sells moon cakes and pastries. In total, Lian Bee has three branches under its name.

8

Strategies employed against their competitors:


Tean Ean would attract the customers to buy their products by giving out promotions and discounts that will appeal in the eyes of customers.

The shop also encourages all their staff members to treat each and every customer politely as it is seen as an important component by Tean Ean when competing against its main rival, Ghee Hiang.

The shop always ensures that the products are made of the highest quality to retain the faith of the customers placed on us.

Sin Hup Heng

One of the main policy followed by Sin Hup Heng is to ensure that their products be freshly baked and hygienic.

The shop also encourages its employees to have a set of skills under their belt so to be able to make more quality pastries which will give them the upper hand against their competitors.

Obstacles faced by new businesses when entering the market:


Initially Tean Ean did encounter a lot of challenges. At that moment, Tau Sar Pneah was needed to supply to them due to lack of workers. But afterwards the supplier stopped supplying Tau Sar Pneuh to them as poor economic takes its toll resulting in an overall poor performance. So within this short time, Tean Ean was determined to find as many workers as they could, so they are able to make Tau Sar Pneah of their own to counteract this problem. From the experience of Tean Ean, we can conclude that a pastry shop must also be flexible when coming up with new innovative ideas to solve their pricing, pastries, capital and many more. And look how far it has taken Tean Ean who are now fully depended on itself without ever relying on suppliers to supply them the goods.

9

Sin Hup Heng

According to the owner, it is easy to compete in this market even though there are other businesses as long as you are hardworking and motivated to keep running the business. Upon hearing this to those new pastry shops they must never give up until the end if you are hardworking and the urge to drive their business forward.

Other than that, capital must also be priority as well so for you to be able to get your hands on the necessary ingredients and the required machineries needed in making your pastries.

Nature of market & Justifications:


The Bakeries and Pastry market along the George Town, Penang has Monopolistic Competition. In a market with Monopolistic Competition, we can witness the following:

1. A market place of not more than 100 firms2. Weak barriers to entry3. Weak pricing power4. Selling differentiated products to make them stand-out against their competitors

Below are some of its proofs to show this type of market has such characteristics:

Tean Ean Local Products is currently located alongside 22 others bakeries and pastry shops at George Town, Penang. This shows that there are many firms in the geographical market and it is easier for newer firms to enter.

The market also sells different types of pastries, each having their own uniqueness in order to compete against their main competitors. For an example firms like Tean Ean also sell other products that are originated from other states in Malaysia besides just selling their well-known Bah Kut Teh and Tau Sar Pneuh Pastries.

Lastly, in market area, you will be able to witness the varieties of advertisement set up as a way to attract more customers and to avoid losing out to its main competitors. As for Tean Ean, they have successfully complement the “Open Kitchen” concept by giving the customers the chance to learn how to Pau Sar Pneuh on the spot for just Rm 15. The “Open Kitchen” concept is actually to reveal to customers that no preservatives are used and that they are freshly

10

made for delivery. This is in fact one of the strategies implanted by Tean Ean towards their customers for them to still keep their faith in them.

Sin Hup Heng

The Bakeries and Pastry market along the Klang Valley has Oligopoly Competition. In a market with Oligopoly Competition, we can witness the following:

1. A few sellers in the market2. Protected by strong barriers to entry3. Strong Pricing power4. Mutual dependence between the oligopoly firms5. Products sold either as standardized or differentiated

Below are some of its proofs to show this type of market has such characteristics:

Sin Hup Heng is currently located alongside 3 other bakeries and pastry shops at Klang Valley. This shows that there are a few firms in the geographical market making it harder for other new firms to enter.

The market also sells one type of product or a few types of products. In the case of Sin Hup Heng, it sells up to 6 to 7 types of products to accommodate their main product, Beh The Sor pastry.

Finally there will be a sense of mutual dependence between the oligopoly firms in the market area. Since there are only a total of four shops still in operation, each shops will be waiting in the wings ready to pounce if one of them make a move. So Sin Hup Heng is doing things step by step, considering which one is the best move overall to avoid a price war.

11

Comparison between Sin Hup Heng & Tean Ean Local Products

Competitive Traits Sin Hup Heng (Klang Valley-Based)

Tean Ean Local Product (Penang-Based)

Number of competitors

2 – 5 firms 20 – 30 firms

Barrier to entry Strong, low in capital due to loss in its appeal towards the younger generation

Weak, high in capital, large amount of customers, high appeals towards its advertisements

Differentiated or Standardized Products

Standardized Differentiated

Pricing Power Price Maker- sells around 6 to 7 types of pastries

Price Maker- sells various types of pastries from different parts of Malaysia (e.g.: Dodol- from Malacca, Sa Ker Ma- from Ipoh)

Types of customers It makes up of residents and tourists in Klang

Mainly residents and tourists in Mainland Penang. This is because we do not have any franchises or delivery services and therefore, people have got to come to our one and only shop to buy these products

Location 114, Jalan Pekan Baru, Kawasan 17, Jalan Meru, 41050 Klang, Selangor

90 Jalan Sultan Ahmad Shah, Georgetown, 10050 Pulau Pinang

Verdict Oligopoly competition Monopolistic competition

12

Conclusion:As a conclusion, we really admire how Tean Ean and Sin Hup Heng run their

businesses. Although they may be different, but their targets, goals, passions and efforts are still pointing towards the same direction, which is success. We want to be Quantity Surveyors that have these great attitudes in the future. We really love the taste of their Tau Sar Pneah and Beh Teh Sor and we can never wait to get back to these outlets soon!

13

Recommendation

Sin Hup Heng Local Product

The local products sold in Sin Hup Heng are not of varieties as they never tend to produce any new products onwards. On the other hand, the world is changing every time and they still stick to their traditional belief. They should be more creative towards their own products and try to produce many more new type of product. Malaysia is a multicultural country so we can be expected to find many different types of local product. They have a very few differentiated product exclusively for the local product shop and also the products they produce focuses too much on the traditional Chinese pastries. There should have plenty types of traditional pastries for different culture to enjoy such as Malay and Indian. They should learn and explore those types of pastries and in the meanwhile they can also review the concept of 1 Malaysia.

The shop lot was built since 1994. The Sin Hup Heng shop looks old and it has not been repainted for a very long time. On the other hand the shop is located beside the roadside. This will cause the shop to look unhygienic which will affect the decision of customers when considering buying their products. Besides that, there is a nearby public bank around the location of the shop which causes limited parking spaces and that is also the main reason why customers are driven away from the shop. Our recommendation is that they should shift out to other new shop lots which have more parking spaces for the convenient of customers. In addition, they also can have a renovation towards their shop which will make the old shop looks clean and tidy so that customers will be attracted to buy their products.


14

Tean Ean should take this opportunity to set up a few branches as the barrier to entry in this monopolistic competition is easy. So this will help them eventually to be an internationally well-known pastry shop around the world making George Town a favorite tourist place to go and visit. In addition it will help them to hold the advantage when going up against it main rival, Ghee Hiang since they themselves also have a couple of branches. This is to attract new customers as well give them the convenience of reaching one of its nearest destination just to buy its products.

Tean Ean should also try to advertise a lot through IT technologies to complement their official Facebook website. This will result in a wider scope of Tean Ean getting promoted to the rest of Malaysia.

Appendices

15

Interview Questions: Sin Hup Heng (Klang Valley, Selangor)

1. When was the business founded?In 1974, I started my biscuit business with just a small stall. After that, made a lot of profit and then shifted to a shop lot until now. The total years of my biscuit business is around 40 years.

2. Who founded it?I, Mr Lee, was the founder. I started to learn making traditional biscuits since I was just a small kid.

3. What are your main products/services or signature dishes? How about the pricing and menu?We sell Biscuit Beh The Sor, which is our signature product that costs around RM 8 per box.

4. Who are your customers?Our customers are usually residents and tourists in Klang.

5. How have the business been doing for the past few years (by comparing its estimate annual revenue figure)?For the past 20 years, the business has been very good, but currently, the young generations do not like traditional biscuits. As a result, this biscuit business has been dropped.

6. How many branches or stores do you have (If applicable)? What is the location, number of staffs and management of staffs?We have only got an old shop. The address is 114, Jalan Pekan Baru, Kawasan 17, Jalan Meru, 41050 Klang, Selangor There are ten plus workers in our small shop. Our contact number is 03-33444854.

7. Can you provide us a brief history of your business and its most recent developments?Our business has been running for more than 40 years, 20 years ago, we shifted our stall to a shop lot. When I was small, my family did not have money to send

16

me to school and I was also lazy to study. One day, my father told me that I would grow up to become an adult one day and would also marry a woman. At this moment, I should be more responsible to your family. He said that if I did not have a chance to study, I must at least learn a skill. Then, I started to learn making traditional Chinese biscuits. When I started this business, my father gave me his one and only property to me, which was a coconut tree, but I continued with the biscuits business until now.

8. Do you have any rival businesses? Who are they?Yes, we do. Last time, we had a lot of competitors, around 30. However, we are now left with only three competitors in Klang Valley that are still running their biscuit businesses. Some biscuit shops have enlarged their businesses and have a lot of shareholders. Unfortunately, they have been competing with each other day by day just because of money. For some shops, their young generations do not want to continue their biscuit businesses because it is very tough, tiring and competitive.

9. Is the business constantly facing strong competition from other competitors? What strategies do they used to compete against you?No, this is because as time is moving on, more biscuit businesses will be ended and causes lesser competitions. As a result, our business will not be affected by strong competitors.

10. How big is your market share (market’s total sales) as well as your top competitors? Our business can make a lot money but it is very tough. Honestly, it totally depends on the customers. Occasionally, we have a lot of customers and vice versa, when there aren’t any holidays. However, if you run a business with passion and effort, you can afford to buy a Toyota Camry and also a moderate house, like semi D and it is never going to be a problem, just like me.

11. Do you think it is easy to enter in this market? Why?It is easy to compete in this market even though there are other businesses as long as you are hardworking and determined to run the business. If you are lazy to work, although you have got tones of resources and money, one day, you will also fail and eventually, you will face bankruptcy.

17

12. What are the challenges faced in setting up this business?Last time, when we had a business to run, everyone just cared about friendships between businesses. When I first started my business, I borrowed money from my friends. When I bought the ingredients, such as flour, margarine and so on, I did not need pay straight away. However, nowadays everyone just cares about money only. If you do not have money, you cannot buy the ingredients. Technically, you cannot start your business. Honestly, I kind of miss my amazing friends I have had that prioritized friendships. Besides that, it is also hard to employ people. Nowadays, when we interview people, they tend to talk about salary first. If the salary is very low, no one would want to work.

13. What strategies do you employ to divert customers away from your competitors?

Our products must be fresh and clean. Besides that, I believe that when we are making the traditional biscuits, it’s all about the skills that we have. If your biscuits are tasty, everyone would buy them from you definitely. If your biscuits are not good enough to be competed in the food market, customers would still buy from you. However, after their first trials on your product, they would not really buy products from you again.

14. Are your pricing decisions strongly affected by your competitors? Why or why not? Sorry, I have got no comments on this particular issue.

15. What are your future plans for the business if any?No. My son does not want to take over my business. My biscuit business will not be able to continue for more than ten years because currently, I am already seventy years old and I still cannot find anyone that could replace me.

16. What do you sell besides your main products, services or signature dishes?Last time, we produced 10 to 12 products but now we only produce 6-7 products only. Besides the main traditional cookies, I also make Chinese wedding cookies because it is still common in the food market.

18

17. Do you run any other businesses apart from this business?No. I feel that it already is enough to run my biscuit business.

18. What are the differences do you think running the business in Penang and or Klang valley?If I were to compare my business with the ones in Penang, I can’t really give any comments because everyone has their own standard skills and tastes. However, I feel that the Penang’s green bean biscuit is much better than Klang’s. In management system wise, there are no differences between Klang’s and Penang’s because to make traditional biscuits, the most important thing is the skills that we have which judge whether we can make nice traditional biscuits or not.

19. How do you plan to sustain or maintain the business?I have no idea. However, we have got more than enough money to sustain and maintain this business as long as I can feed my own family and have enough money to spend.

19

Interview Questions: Tean Ean Local Products (Penang, George Town)

1) When was the business founded?This business was set up in the year of 1995, it’s been a 10 year history. Tean Ean local products pain up by white and green, comes out with a natural traditional concept, selling all local and traditional products. Simple, clean and tidy decorations always welcome you to stay for relaxing and enjoyable shopping.

2) Who founded it? It was founded by Mr. Teh Tatt Huat in 1995, after he had stopped doing his automotive business due to the difficulties he faced. To date Tean Ean turned into a 1-Stop Speciality Shop that carries more than 300 local products.

3) What are your main products/services or signature dishes? How about the pricing and menu?

Tean Ean is well known for its Bah Kut Teh ingredients which are available in packets. The special Bah Kut Teh ingredients were formulated by Tatt Huat’s grandfather in the 1900s in Penang. Besides Bah Kut Teh ingredients, Tean Ean is also well known for its freshly baked Tau Sar Pneah pastries. The Tau Sar Pneah were made in an open kitchen because it reveals to customers that no preservatives and MSG are used. Tean Ean also makes its own nutmeg rheumatism oil, nutmeg oil, and nutmeg syrup. You could get a box of Tau Sar Pneah at a reasonable price, RM 5.70.

4) Who are your customers? Our customers are mainly residents and tourists in Mainland Penang. This is because we do not have any franchises or delivery services and therefore, people have got to come to our one and only shop to buy these products.

5) How have the business been doing for the past few years (by comparing its estimate annual revenue figure)? A business’ performance is evaluated by the profit we get every year. So, customers play a dominant role. Our business tend to make more profit during holidays and vice versa. In 2012, we made a total amount of RM 2 Million and there’s an increase in 2013, which made RM 2.5 Million. I am very happy and satisfied with this result.

6) How many branches or stores do you have (If applicable)? What is the location, number of staff, management of staff? No, we do not have any branches, but only a store. The location is in Georgetown, Penang and we have a total number of 20 workers and 10 staffs.

20

7) Can you provide us a brief history of your business and its most recent developments? Originated from Canton, China, Tean Ean has become an integral part of Penang, Malaysia's colourful heritage and mesmerising traditions. We have hit our target of making a total profit of RM 2 Million in 2012. Also, we have got modern technologies such as machines and large ovens to produce more products faster.

8) Do you have any rival businesses? Who are they? Yes, we do. One of our most bitter rivals is Ghee Hiang. They also sell good and tasty biscuits. However, I have been told that many customers there were treated impolitely that we have never done before.

9) Is the business constantly facing strong competition from other competitors? What strategies have they used to compete against you? Yes, we have been facing this crisis for the past few years. They have used many strategies to compete with us such as setting up more branches, advertising through internet & television and even giving crazy promotions and discounts.

10) How big is your market share (market’s total sales) as well as your top competitors? Sorry, I do not have any comments.11) Do you think it is easy to enter in this market? Why? What are the challenges faced in setting up this business?In my opinion, Malaysians love to eat and are hungry for delicious food. Therefore, I thought of starting this business, since most of the people love to experience new food. Yes, we did face a lot of challenges when we started this business back then. Tau Sar Pneah were supplied to us as we did not have enough workers to do so. As the economy drops, the supplier had stopped supplying us due to the poor performance. In this short period of time, we had to find many workers and produce the Tau Sar Pneah on our own, which was really tough.

12) What strategies do you employ to divert customers away from your competitors? We would give good promotions & discounts, treat them politely and produce good quality products so that our customers would still have faith on us.

13) Are your pricing decisions strongly affected by your competitors? Why or why not? No, they are not. This is because, if you truly love the product, you’re willing to pay for it, no matter what. Therefore, I believe in producing good products to gain our customers’ confidence on us.

14) What are your future plans for the business if any?

21

We have just started our website on the internet to make it well known in Malaysia and even the whole world. Therefore, we would want to make our website active so that people can get our latest updates on the products.

15) What do you sell besides your main products, services or signature dishes? Do you run any other businesses apart from this business?Yes, we do sell other products. Some of the products are originally founded in other states in Malaysia that we sell such as, Dodol (From Malacca), Sa Ke Ma (From Ipoh) and many more.

16) What are the differences do you think running the business in Penang and or Klang Valley? I think it is easier to run a business here rather that in Klang Valley because we would have a lot of competitors in this developed district and the maintenance of the shop is also expensive there.

17) How do you plan to sustain or maintain the business? I truly believe that one’s effort would be paid off. If we do our best, we would get our rewards. Basically, there’s nothing we could do much but to work hard and have faith.

22

LocationSin Hup Heng:

Location:

Contact Number: 03-33444854

Picture of the owner: Certificates:


23

Location:

Contact number:

24

Part of the shop

A Group Photo with the owner

25

References

1. Tan, D. (2014, January 3). Old hit, new ways. The Star, p. 34.

2. LB (LIAN BEE) CONFECTIONERY SDN BHD. (n.d.). ,Supplier,Manufacturer|Company|Ultimate Halal Industry B2B Trading Platform, Marketplace & Knowledgebase. Retrieved May 24, 2014, from http://halalstock.com/company.asp?sID=393

3. Teh K.C: Yee, A. (2014, May 17). Personal interview.

4. Lee S.H: Tee, H.N. (2014, May 18). Personal interview.

5. Ghee Hiang - A Heritage Over 155 Years. (n.d.). Ghee Hiang - A Heritage Over 155 Years. Retrieved June 4, 2014, from http://www.ghee-hiang.com/

6. Ghee Hiang, Beach Street, George Town. (n.d.). Ghee Hiang, Beach Street, George Town, Penang / Pulau Pinang. Retrieved May 27, 2014, from http://www.penang-traveltips.com/ghee-hiang.htm

26

http://www.penang-traveltips.com/ghee-hiang.htm

http://www.penang-traveltips.com/ghee-hiang.htm

http://www.ghee-hiang.com/

http://halalstock.com/company.asp?sID=393