Eco

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Eco

  1. 1. School of Architecture, Building & Design Principle of Economics [FNBE0135] FNBE April Intake Report on “A Comparative Analysis of 2 Business of Similar Industry in Different Geographical Locations” Prepared by: Karen Kong Chai Ni (0315480) Lily Then (0313973) Mak Mun Choon (0314928) Lecturer: Chang Jau Ho
  2. 2. Table of Content Content Pages Summary 1 Background Information of Business 2-5 -Pink Petals Fashion -Bukit L‟Avenir Comparative Analysis of Businesses‟ Competitive 6-13 Traits Recommendation 14-15 Appendices 16-21 Reference 22
  3. 3. Summary This project aims to analyze and compare two businesses on different settings and let students understand the market competition in real world. The business‟s shop we had chosen was Pink Petals Fashion located at Kuala Lumpur and Butik L‟Avenir located at Penang. This report had consisted of background information about businesses and comparative analysis of businesses. Face-toface interview was used for us to obtain the information and compare the businesses‟ competitive traits. After analysis, we had found that Pink Petals Fashion is more commercially successful than Butik L‟Avenir. We also recommended some suggestion on improving the competitiveness for each business. 1
  4. 4. Background information of Businesses Pink Petals Fashion Outlook Enterprise Sdn Bhd is a very popular retail-clothing company located at Jalan Hang Tuah in Kuala Lumpur. Outlook Enterprise Sdn Bhd has 56branches of clothing shopes that located in different area. Pink Petals Fashion is one of the branches of the Outlook Enterprise Sdn Bhd that located in Kuala Lumpur. It located at G4, Kenanga Wholesale City. The address of Pink Petals Fashion is No2, Jalan Gelugor, Kuala Lumpur. Mr Bong, the boss of Outlook Enterprise Sdn Bhd had started this business at 2011 year. Mr Bong started this business because this business belongs to his family business. Mr Bong had started different type o business and pass to his daughter and sons take care the business. One of his sons, Bong Siok Siong had taken care of Pink Petals Fashion. He had hired a manager, Sam Liew and hired 3 workers, Ramlah Junaidi, Dicky and Tan Siew Ping to help him take care of the shop. The main product of the Pink Petals Fashion was clothes. There were two concepts of clothes sold by Pink Petals Fashion that was Malay Concept and Fashion 2
  5. 5. Concept. Pink Petals Fashion sold Malay Concept such as Baju Kurung and the Fashion Concept such as ladies clothing. Besides that, Pink Petals Fashion also sold lady accessories such ashandbag, belt and scarf. The number ofcustomers a day was 100 people.Two workers, Dicky and Tan Siew Ping had served the customer of Fashion Concept, one workers, Ramlah Junaidi had served the customer of Malay Concept while Sam Liew, manager will served all customer.Pink Petals Fashion‟s monthly revenue figure was around $30000. However, Pink Petals Fashion did not have any changes but the choices of clothes increases over the past 1years. The office phone number of Pink Petals Fashion is +60321449988. If customers have any question or want to make a complaint can call this number. 3
  6. 6. Butik L‟Avenir First Avenue Mall is a spread over seven levels shopping mall with the fifth to seventh floor consisting of parking spaces that located in Penang. It has opened since November 2010, many of the first outlet in the building are women‟s apparel stores. Butik L‟Avenir is a small clothing shop that located at 4 th floor, First Avenue Mall. The address of Butik L‟Avenir is Jalan Magazine, Georgetown, 10300 Georgetown, Penang, Malaysia. Nicholas, the boss had started the business in August 2012 year. This is his first shop as he did not opened any branch. Nicholas had started this business because he was interested in doing the clothing business. He felt satisfied when he saw people wear beautiful clothes. He had hired a worker, Eelyn to help him take care of the shop. Eelyn also considered as manager as she can make small decisions without asking him such as held a promotion or when purchase new clothes. The main product of Butik L‟Avenir was Fashion ladies clothing. Butik L‟Avenir carried out an assortment ladies cloting that has a range of size with latest trends in style. In addition, Butik L‟Avenir also sold ladies accessories 4
  7. 7. such as earring, bracelet and necklaces. The number of customers of Bukit L‟Avenir a day is not constant. For weekdays, the number of customers is about 3-7 peoples while the number of customers for weekend is about 10-20 peoples. The monthly revenue figure of Butik L‟Avenir was around $10000 or below and it is not constant. However, Butik L‟Avenir did nothave any changes as it just started the business I years. If customers want to know when the new style of clothes will arrive can call phone number of Eelyn, 016-3218381. 5
  8. 8. Comparative Analysis of Businesses‟Competitive Traits 1) Number of competitors of businesses in their respective markets Pink Petals Fashion has many competitors. The range of number of competitors around 2-10. However, Pink Petals Fashion has top three competitors which are A To Z, Melody and Rafflesia as they are located at the same building. For Pink Petals Fashion, A to Z is the strongest competitors. It is because the size of the A to Z is bigger than Pink Petals Fashion and the choices of clothes also more than Pink Petals Fashion. A to Z also just located beside Pink Petals Fashion only. Besides that, the top three competitors of Pink Petals Fashion also sell the same concept of clothes with it which is Malay Concept and Fashion Concept with style diversification. A to Z The women is the manager of A to Z while the man is manager of Pink Petals Fashion 6
  9. 9. Butik L‟Avenir has many competitors. The range of number of competitors is arounf 10-20. However, Butik L‟Avenir has top 3 competitors which are H&M, Teetoo and Belle as they are located at the same building. H&M (Hennes & Mauritz AB) is a very well-known multinational retail-clothing company. H&M is the strongest competitors for Butik L‟Avenir. It is because H&M has a larger size and the choices of Fashion clothes more than Bukit L‟Avenir. H&M also can get the latest style of clothes with normal price faster than Bukit L‟Avenir. In addition, Belle also is a strong competitor because it has more choices of fashion clothes and cheaper than Bukit L‟Avenir.The three competitors of Butik L‟Avenir sell more branded clothes than Bukit L‟Avenir. Strong Competitors of Bukit L‟Avenir 7
  10. 10. 2) Strategies compete with competitors and How successful business The strategy that Pink Petals Fashion used to compete with its competitors is lower the price. For example, when A to Z held a sale, Pink Petals Fashion will held a promotion with „Buy 1 free 1‟ to attract the customers. In addition to sell clothes, Pink Petals Fashion also sells ladies accessories such as handbag, belt and scarf. Pink Petals Fashion also will use the strategies „Get free handbag one if customers buy above $150‟ to attract customer buy more. Pink Petals Fashion also has a purpose that is always provide the best services to the customers. Lady Accessories Held promotion and lower the price of clothes to attract customers 8
  11. 11. The strategy that used by Bukit L‟Avenir almost same with the Pink Petals Fashion that is lower the price. Bukit L‟Avenir also held a promotion and sells ladies accessories such as earring, necklace and bracelet to attract more female customers. Another strategy used to compete with the competitors is the manager has to always follow the trend to purchase different styles of clothes quickly. Held promotion with„2 for $100‟ and sell ladies accessories The result of Pink Petals Fashion compete with other competitors is quite successful. There was around 100 people visit the shop and buy the product a day no matter weekdays or weekend. The selling results of one month also will not lose compare to other strong competitors. It is because the price of the clothes of Pink Petals Fashion is cheaper than other competitors and the quality of the clothes also will not lose 9
  12. 12. compare to the clothes of A to Z. The customers also can get the free products if they reach the goal. Besides that, the workers of Pink Petals Fashion always provide best service to the customers. Butik L‟Avenir is quite unsuccessful compare to Pink Petals Fashion. The highest number of customer is around 10-20 peoples for weekends only. This is because the H&M has a good reputation on the market. Even though Bukit L‟Avenir lower the price of product and held a promotion but the quality of the clothes of H&M is better and it isbranded clothes. So, it is difficult to compete with the H&M. 3) Obstacles faced by business strong or weak The obstacle faced by Pink Petals Fashion is economics is not good. The price of the product now had increased. People now prefer to save the money to buy the item that is necessary only. However, for Pink Petals Fashion, it is easy to overcome the obstacle. It is because Pink Petals Fashion is the branch of the big and popular retail-clothing company, Outlook Enterprise Sdn Bhd. It can fully support the needs of the Pink Petals Fashion and invest capital into the Pink Petals Fashion. The obstacle faced by Butik L‟Avenir is there is too many clothing shop now and it is difficult to compete with other competitors. The owner also 10
  13. 13. must have a big capital before started a business. For Butik L‟Avenir, it is difficult to overcome the obstacles compare to Pink Petals Fashion. It is because Butik L‟Avenir just a small clothing shop. Butik L‟Avenir has not big company that can fully support and invest it. 4) Nature of the businesses Pink Petals Fashion is an oligopoly market. Oligopoly market is a market that dominated by a few sellers. The competitors of the Pink Petals Fashion also are an oligopoly market. This is because the market of business is dominated by Pink Petals Fashion, A to Z, Rafflesia and other competitors. Each of them controls their own market and cannot get involved each other‟s market as there is a strong barrier to enter the market. Butik L‟Avenir is an oligopoly market. One of the competitor, H&M is a monopoly market but the other competitors are an oligopoly market. A monopoly is the single dominating seller of a market. H&M consider as monopoly market because it control 70% of the market. Other clothing shops are difficult to compete with the H&M. Bukit L‟Avenir and other competitors control their own market and do not get involved each other‟s market. 11
  14. 14. Comparative Analysis Summary Table Competitive Traits 2. Barrier to Entry (Weak or Strong? Why?) Business B (Pink Petals L’Avenir-Penang) 1. Number of Competitors (in ranges e.g. 2 to 10, 10 to 50, 50 to 150, etc.) Business A (Butik Fashion- Kuala Lumpur) 10 to 20 2 to 10 Strong. Because too many clothing shops. Strong. Because economies not good. Standardized Products 3. Differentiated or Standardized Products (Fashion clothes) (if differentiated provide 2 to 3 examples) Standardized Products (Fashion 4. Pricing Power (Price Maker or Taker? Why?) Price Maker. Because Butik L‟Avenir is just a single business shop and the owner can decide the price by himself. Price Taker. Because Outlook Enterprise Sdn Bhd is the head office of Pink Petals Fashion and it control and decide the price of Pink Petals Fashion. 5. Other Characteristics (e.g. Any close product substitutes, mutual dependence, constant advertising) Ladies Accessories (Earring, Bracelet, Necklaces) Ladies Accessories (Handbag, Belt, Scarf) Oligopoly Oligopoly 6. Verdict (Monopoly? Oligopoly? Perfect Competition?) 12 clothes and Malay clothes)
  15. 15. Which Business is more commercially successful? Based on our analysis, Pink Petals Fashion is more commercially successful than Butik L‟Avenir. Monthly revenue of Pink Petals Fashion is around above RM 30,000 while Butik L‟Avenir is around RM 10,000 and sometimes is below RM 10,000 and is not constant. Why? This is because Butik L‟Avenir is still considers as a new shop compare to Pink Petals Fashion. They still don‟t know how to sustain in the market. Besides that, location also is a reason that Pinks Petals Fashion more commercially successful than Bukit L‟Avenir. Pink Petals Fashion is located at Kenanga Wholesale City as many people live around the area and there is many people will go there to buy the product while Butik L‟Avenir is located at First Avenue Mall as not so much people live around the area and they will go there to buy the product. In addition, Pink Petals Fashion is selling Malay Concept, Fashion Concept and Ladies Accessories has more choices than Bukit L‟Avenir is just selling Fashion Concept and Ladies Accessories. In Malaysia, Malay is considers as a common racial and largest consumers. So, Pink Petals Fashion can earn more profit by have a business from different race. 13
  16. 16. Recommendation Pink Petals Fashion We had suggested that the shop should promote more man style of clothes because the man also has choice to choose their clothes. If just selling lady types of clothes, the shop can just doing business with lady. So, the business of the shop will decrease. Other opinion is to open more branches to sell their products in other shopping malls and places. It is because it will let more people know more about their shop and product that they selling, so the business will expand and the competitiveness also will improve. Besides, the shop also has to improve their relationship with supplier and customers. This is the most effective way to improve the business, because have a good relationship with supplier, they will get product faster so customers will come buy clothes with them. Butik L‟Avenir We had suggested that the shop should increase the investment in the marketing activities. The shop should do more promotion to promote their product to customers, so that many people know more about their product. Furthermore, they can produce more style of clothes like selling man style clothes. If their shop just sell simply one type of clothes, the customers will feel less selection in this shop, so increasing style of clothes is necessary. Moreover, make a good relationship with the 14
  17. 17. customers to increase their trusted on their shop and product. If the shop can get the trust from the customers, customers will help us to promote our shop. This will increase the visibility of the shop. Video link: http://www.youtube.com/watch?v=7exJpaNGsBA&feature=youtu. be
  18. 18. 15 Appendices Pink Petals Fashion Pink Petals Fashion‟s Premises The man of the right side in the photo is the owner, Mr Bong. Main Product of Pink Petals Fashion Fashion Concept Clothes Malay Concept Clothes
  19. 19. 16 Other products of the Pink Petals Fashion A to Z is the strongest competitor of Pink Petals Fashion The woman is the owner of the A to Z
  20. 20. 17 Sam Liew, the manager of the Pink Petals Fashion li Main Product of A to Z Fashion Concept Clothes and Malay Concept Clothes
  21. 21. 18 Bukit L‟Avenir Bukit L‟Avenir‟s premises Main Product of Bukit L‟Avenir Fashion Concept Clothes Eelyn, manager of the Bukit L‟Avenir Other products of Bukit L‟Avenir Earring, Bracelet and Necklaces
  22. 22. 19 The most powerful competitors of Bukit L‟Avenir Bukit L‟Avenir held promotion such as 2 for $100
  23. 23. 20 Interview Note Questions: 1. When was the business founded? 2. Who are the key founders? 3. What are your main products? 4. Can u estimate the number of customers a day? 5. What is the business‟ monthly revenue figure? 6. Do you have many competitors? Who are they? Who are your top 3 competitors? 7. What strategies have they used to compete with you? 8. Generally, do you feel it is easy or hard to enter this market? Why? 9. How often do you release a new product? 10. Are you pricing decisions strongly affected by your competitors?
  24. 24. 21 Reference Barrow. C. (2007). Starting a business for Dummies. (2nd ed) Chichester, England: John Wiley & Sons. Ltd. [Accessed 19 Jan 2014] Tyson, Eric, Schell, Jim (2012). Small Business for Dummies. (4th ed) Hoboken, N.J. : John Wiley & Sons. Ltd. [Accessed 19 Jan 2014] Malaysia (2009). Outlook Enterprise Sdn Bhd. Retrieved from http://www.malaysia.com/directory/retail-clothing-and accessories/textiles-and-specialty-stores/wp-kuala lumpur/Outlook_Enterprise_Sdn._Bhd._156991.html [Accessed 20 Jan 2014] Innovation Leaders (2008). H&M. Retrieved from http://innovationleaders.org/hm_company_profile.html [Accessed 21 Jan 2014] TimeOut Penang (2013). Shopping & style. 1st Avenue mall. Retrieved from http://www.timeout.com/penang/shopping-andstyle/venue/Malls/title/1st-Avenue-Mall [Accessed 21 Jan 2014]
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