Econ final by jpr

982 views

Published on

Published in: Education
  • Be the first to comment

  • Be the first to like this

Econ final by jpr

  1. 1. SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN THE DESIGN SCHOOL FOUNDATION IN NATURAL BUILD ENVIRONMENT TOPIC: A COMPARATIVE ANALYSIS OF 2 BUSINESSES OF SIMILLAR INDUSTRY IN DIFFERENT GEOGRAPHICAL LOCATIONS GROUP MEMBERS: PARHAM FARHADPOOR 0313698 HASAN RUBAYET 0308941 MOY CHIN HOONG 0314014 SUBJECT: PRINCIPLES OF ECONOMICS (FNBE0135) LECTURER: CHANG JAU HO SUBMISSION DATE: 24th JANUARY 2014
  2. 2. TABLE OF CONTENT  SUMMERY…………………………………………..……..PAGE 1  BRIEF BIO OF CHINA HOUSE………………...…..…..PAGE 1 & 2  BRIEF BIO OF DR. CAFÉ COFFEE………..………..…PAGE 2 & 3  ANALYSIS OF THE BUSINESS BENCHMARKS FOR CHINA HOUSE……………………………………………........PAGE 3 – 4  ANALYSIS OF THE BUSINESS BENCHMARKS FOR DR. CAFÉ COFFEE……................................................................PAGE 4 – 5  THE SUMMARY TABLE OF SIMILARIRTIES AND DIFFERENCES BETWEEN TWO BUSINESSES……………………...….…..PAGE6  RECOMMENDATIONS FOR IMPROVEMENT OF BOTH THE BUSINESSES……………………………………...…..…….PAGE7  APPENDIX………………………...………………...……...…PAGE8 – 16  REFERENCES LIST…………………….………………...………PAGE17
  3. 3. SUMMARY For this assignment and research, our group chose two businesses in food industry. First we went to Penang Island to accomplish our research. The first coffee shop situated in the heart and tourist attraction of Penang Island, that is Victoria Street, George town and the second interview we did in the posh area of KL, called Montkiara. Gradually the name of those coffee shop are China House and Dr. Café. The focal aim is to compare between this coffee shop businesses. For instance, compare between business strategies, number of the competitors, geographical location, number of brunches, main product, revenue, and commercial success list goes on. Eventually we have found a lot of contrast. BRIEF BIO OF CHINA HOUSE The café that we chose to interview and analyse in Penang is China House. This very unique café is located in, 153 & 155, Lebuh Pantai and 183B, Lebuh Victoria, 10300 George Town, Malaysia and it is found by Narelle McMurtrie who is an Australian lady on October 21, 2011 and it’s been managed by Ms. Shirley. China House doesn’t have any other branch and there is only one and it is open 9:00am to 12:00am during weekdays and 9:00am to 1:00amduring weekends. This place service to its daily 110 to 130, on average, costumers by around 25 employees and a manager. China House is a traditional compound of 3 heritage buildings, linked by an open air courtyard. Now converted into 14 existing spaces with shops, cafes, restaurants, galleries and theatre. Their specialties include breakfast, lunch, dinner, coffee, and drinks but what they are very famous is making the best quality homemade cakes, however their food style contains Italian, Chinese, and Japanese, but their signature dish is ginger buds spaghetti which comes with grilled chicken as well .China House has different lounges, the first lounge at the entrance is a bar where all the alcoholic drinks and cocktails serve there and also there is a stage for musical performance during weekends, there are other lounges such as vine store for serving vine and having a more quiet moments and also fine dining where people should enter more formal. The rest of the salons are reading space, galleries, and art space and its name is VIC because it’s facing Victoria Street. However the motives to set up this business are to portrait the fusion of heritage and modernity plus uniqueness for heartening the art
  4. 4. culture around Penang Island. This café’s recent developments include providing free Wi-Fi, upgrading coffee machine, and held Gisela and Marcella Mueller art and photography exhibition. BRIEF BIO OF DR.CAFE COFFEE After visiting the first café in Penang, we found another café in the Klang Valley, which its business name is Dr. Café Coffee. It is a franchise coffee shop founded by Mr.Yousef S. Al Rajhi in 1997. Mr Yousef opened the very first outlet of Dr. Café Coffee in Al Arouba Plaze in Riyadh, the Kingdom of Saudi Arabia. The branch that we interviewed is located in Publika, Mont Kiara. Dr. Café Coffee has around 115 branches around Saudi Arabia and Asia. Most of the branches are located in Riyadh and only parts of the branches are situated in Singapore and Malaysia. It has thousands of employees and around 10 to 15 per branch. The date we went there was 5th of January, which is on Sunday. We reached there at around 1400 hours and there are approximately 15 customers including us. There was one family of 6 persons sitting at a round table enjoying their happy family time and another few persons were with their laptops. Coffee and teas are the main products of Dr. Café coffee. Other than their main products, they have also served the other beverages such as fruit juice, cocktails and Franilla. Franilla is actually a Frappuccino with the base of vanilla instead of coffee. Furthermore, Dr. Café also provides some food like cakes, doughnuts, salads and Ebreakfast. So, the customers can have their breakfast, teatime and even supper here with all these verities of food and beverages. Besides the food and beverages, they are also selling their own merchandises such as tumbler, tea maker and coffee brewtech. The founder, Mr. Yousef is a coffee lover. He was stimulated by the love of magic beans (coffee) and therefore he started his journey by travelling around the world in order to find the perfect cup of coffee. He had been to Yemen, where the coffee was first discovered. And, he finally found out that he would be in the food and beverage industry for the rest of his life while he smelled the aroma of freshly brewed coffee. Then, he was inspired to learn more about coffee and the processes of making coffee
  5. 5. and also meet and socialize with the friends around the world. His aim to start this business is to maintain the classic value of coffee traditions in a new way. ANALYSIS OF THE BUSINESS BENCHMARKS FOR CHINA HOUSE For China House, there are approximately 8 competitors around its geographical market. For examples, The Twelve Cups, Lighthouse Coffee, TRAFFIC and Kopitan Classic, these four café are on the same street with China House. The distance between is just around 10 minutes walking distance, and these café are also considered as the top competitors of China House. Other than these four cafes, there are still Edelweiss Café, Campbell House, Rainforest Bakery & Pastry and Brix & Baume around that area. This situation has summed up that the competition of Café around that area is very strong. Out of these 8 coffee houses, the top 3 competitors are figured out in order to compare their main products and specialties with China House. So, the nearest coffee shop to China House is The Twelve Cups, which is also the top one competitor among the three coffee shops. The Twelve Cups is founded in 2012, which is a year after China House has been founded. Their main products are crepe cakes where come with a lot of flavours such as mango, strawberry, green tea, Oreo and many more. But of course, their coffee also have a lot of good review from their customers. That is why The Twelve Cups can be known as the top competitors of China House mainly because of the crepe cakes and coffee. Besides, they also used the strategy of designing a drawing on the plate with chocolate syrup while they serve the food. The lighthouse Coffee is the second top competitor. It is founded in 2006 and also situated in the same street with China House. They are famous in their cakes, coffee and also non-coffee based beverages. Their tiramisu cake got a very good respond from their customers and also is one of their bestseller cakes. Other than the tiramisu cake, they have a signature tea, which come with a pink colour lid is called Dilmah Tea.
  6. 6. The third one is TRAFFIC. It is a combination of kitchen, bar and music room. There are few reasons why it is one of the top competitors of China House. The first one is the location, where it is also located in the same street with China House and the distance is just around 10 minutes walking distance. The second one is because of the music room and bar. This causes a competition with the bar in China House. Due to there are a lot of competitors around China House, China House has the specialty of 5 lounges in one café. This will eventually attract more customers with different interests because they provide all sorts of entertainments such as cake house, fine dining, bar and art galleries. Besides, China House also provides comedy and musical performances from different countries during weekends in order to entertain their customers. And, they also use a white paper as the tablecloth to allow their customers draw on it while waiting for their meals. It is very hard to start up a coffee house business today especially in Penang. This is because there are so many café in this small island and the competition is very big. Unless you have a very unique way in operating the café and also the menu, or else it is almost impossible for you dominate the market of café. Furthermore, China House is operating in an oligopoly situation. This is because there are few coffee houses dominating the market and competing with each other in the island. ANALYSIS OF THE BUSINESS BENCHMARKS FOR DR. CAFÉ COFFEE Competing for a café such as Dr. Café Coffee can be the main challenge, especially for branches located in shopping mall where all the competitors gather together. This branch that is located in Publika, Solaris Dutamas faces so many competitors such as Namoo Bistro, San Francisco Coffee, The Red Beanbag, O’Briens, Marmalade Café and others. All these cafés are in around one minute distance from Dr. Café Coffee, so the share of the business among challengers is less compare to China House. Among all of the competitors locating in Publika shopping mall, three of them are the most important ones for Dr. Café Coffee. The first strong competitor for this café is The Red Beanbag that is located exactly upstairs of Dr. Café Coffee which founded in
  7. 7. 2011 with only one branch till now. The fact is that they have much more customers than Dr. Café Coffee and it’s because of the wide range of food and drinks in their menu compare to the other café. The Red Beanbag’s main products are food, beverages, and coffees however Dr. Café Coffee. The other Dr. Café Coffee’s competitor is San Francisco Coffee founded in 1997 and and they have some branches as a franchise brand. This café’s location is right opposite of Dr. Café Coffee, so competition for them is very important. San Francisco Coffee’s menu is wider than Dr. Café coffee but not as big as The Red Beanbag. Their main products are coffee and snacks such as donuts and cakes, but this café claims that they serve the freshest coffee. O’Briens – Irish Sandwich Café is the other challenger that is trying to compete with Dr. Café Coffee, however the number of customers is less than other competitors. This Irish café started since 1988 and now is known as a franchise brand. O’Briens reputation has been shaped on our famous made-to-order hot or cold sandwiches and they believe is to serve with the highest quality. The strategies used by Dr. Café Coffee to compete with other competitors are very similar to famous cafes such as Starbucks and Coffee Bean but with just a bit cheaper price. For example this café has chosen to serve customers very fast and convenient. The other way of competition that separates them from other competitors is to serve the best quality coffee gathered from all over the world such as central and Latin American, east African, Arabian, and Indonesia and pacific region. Since the nature of the business is oligopoly and there are very strong competitors in this sector, the biggest challenge for them is to compete with famous coffee shops like Starbucks or Coffee Bean, so they always need to maintain the quality which is challenging for them. Another obstacle faced by Dr. Café Coffee is to travel around and look for the best coffee beans, because this is the reason that makes them famous. Compare to other international and local brand, China House is more commercially successful, because its uniqueness, its local brand. Other coffee brand they own the goodwill, but China House does not own any goodwill and it’s successful by its own product.
  8. 8. THE SUMMERY TABLE OF THE SIMILARIRTIES AND DIFFERENCES BETWEEN CHINA HOUSE & DR. CAFÉ COFFEE COMPETETIVE TRAITS CHINA HOUSE DR. CAFÉ (Penang) COFFEE (Klang Valley) Number of competitors Barrier to entry Pricing Size Design Daily number of 8 10 Hard Hard More expensive Less expensive 5 lounges 1 lounge Fusion style Modern style More than 100 Around 40 Multipurpose Single purpose Oligopoly Oligopoly customers Type of the café Nature of the business THE YOUTUBE LINK OF OUR VIDEO - http://www.youtube.com/watch?v=6BNgS9bdCJw
  9. 9. RECOMMENDATIONS FOR IMPROVEMENT OF BOTH THE BUSINESSES Penang is an isolated island from main land of Malaysia and itself is a state. Because of the geographical issue the property value in Penang is very far above the ground and furthermore its historical place that is under UNESCO World Heritage Site. As a result whoever wants to set up business in Penang is extremely easier said than done. Likewise the first interview we did for China House is to be found in the heart of Heritage site that is Victoria Street, George Town. Around the China House coffee shop, there are more than few coffee and food shops. More or less eight competitors around the China House and among those there are main three competitors. When we review those food shops they all have their own style of food and signature dish, but compare with China House those shops are not as complete and unique as China House, but still for earning more capital they (China House) can put a special menu like every week basis there will be some new cuisine to change customer’s mouth experience. There is one more thing that can actually bash the other competitors, if somehow China House provides several parking spaces for customers and that day will be the turning point for the business. On the other hand the circumstances we had found during our second interview for Dr. Cafe coffee just upside down. China House is strong enough in the market and for to beat up its competitor need to be added some few features, but we found Dr. Café Coffee is too weak to even compete its competitors. Compare with main three competitors like The Red Beanbag, San Francisco Café and O’Briens Irish Sandwich Café; Dr. Café Coffee lacking many things. For example they (competitors) have more customers, more food options, variety of coffee making technique etc. Though Dr. Café’s price is cheaper than other coffee shop, still they have to fight with Starbuck and Coffee Bean, those consider as best. Besides they don’t have that much international customer service. Not to beat but to be in the competition Dr. Café Coffee must add range of coffee recipe; add more choices and cuisine on menu, so that customers can have three times of proper meal in a day, employ more skilled waiter/waitress.
  10. 10. APPENDIX Contact Details for China House:- 153, Lebuh Pantai Georgetown, 10300 Georgetown, Penang. - +60 4-263 7299 - www.chinahouse.com.my - info@chinahouse.com.my - https://www.facebook.com/ChinaHousePenang
  11. 11. Contact Details for Dr. Café Coffee:- Level G2, Block A4. Solaris Dutamas, No. 1 Jalan Dutamas 1, 50480 KL - 800 – 122 8222 - http://www.dr-cafe.com/DCWebsite/Default.aspx - info@dr-café.com - https://www.facebook.com/drcafe.coffee.37?fref=ts
  12. 12. Interviewed notes:-
  13. 13. PICTURES:CHINA HOUSE VIC BAR
  14. 14. READING SPACE CAKE HOUSE DRAWINGS DONE BY CUSTOMERS GINGER BUD SPAGHETTI W/ GRILLED CHICKEN THE DICRECTORY THE OLD STYLE DESIGN
  15. 15. DRAWINGS DID BY RUBAYET COMPETITORS OF CHINA HOUSE& THEIR PRODUCTS THE TWELVE CUPS THE CREPE CAKES LIGHTHOUSE COFFEE DILMAH TEA
  16. 16. TRAFFIC GRILLED CHICKEN MOCHITO DR. CAFÉ COFFEE DR. CAFÉ COFFEE PARHAM WAS ORDERING
  17. 17. THE MAGIC BEANS THE FOOD &SNACKS THE CUSTOMERS THE DRINKS ORDERED BY US COMPETITORS OF DR. CAFÉ COFFEE & THEIR PRODUCTS THE SAN FRANCISCO COFFEE THE BREAKFAST
  18. 18. THE O’BRIENS THE MENU THE RED BEANBAG THE COFFEE THE CARBONARA
  19. 19. REFERENCES LISTS dr.cafe coffee. (2014). Retrieved from http://www.drcafe.com/DCWebsite/Default.aspx China House Penang. (2012-2013). China house. Retrieved from http://www.chinahouse.com.my/ Shirley. (2013, December 13). Interview by Parham Farhadpoor []. Brief bio of china house. Interview by Parham Farhadpoor []. Brief bio of dr. cafe coffee. Dr. Cafe Coffee. (2009). Art Of Espresso, 6.

×