Economics final project

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SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
FOUNDATION IN NATURAL BUILD ENVIRONMENT
Principles of Economics [ECN30205]
GROUP MEMBERS:
CHEE WEI SHAN (0319572)
CHONG HUI XIN (0319363)
HWANG WEI LI (0319756)
TAN SHEAU HUI (0319235)
YAP JIA EN (0319550)
Assignment: A Comparative Analysis of 2 Businesses of Similar Industry in
Different Geographical Locations
Lecturer: Chang Jau Ho
SUBMISSION DATE: 12pm, Monday, 25th January 2015

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Table of Content
No. Title Page
1 Artistic Cover 1
2 Cover Page 2
3 Table of Content 3
4 Key Summary 4
5 History Description of Hardware Business 5-6
6 Description of Businesses Chosen 7-9
7 Comparative Analysis 10-15
8 Recommendation 16-17
9 Bibliography 18
10 Appendices 19-37
11 References 38

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Key Summary
The Assignment
For this final project, we were given a task to select two similar businesses in
Malaysia for analyzing and comparing. The main objectives of this assignment are to
use appropriate methodology in obtaining information related to the chosen topic, to
demonstrate the ability to prepare questionnaires and interviews and to analyse data
and compile them in a report.
The Group
Our group consists of five members, Hwang Wei Li as the leader, Tan Sheau Hui
as researcher and editor, Yap Jia En as researcher, Chong Hui Xin as videographer
and editor and Chee Wei Shan as secretary and recorder.
Businesses Chosen
We decided to study the businesses of hardware stores which are placed in
Klang Valley and Negeri Sembilan. One of the hardware stores is located in USJ 17,
Subang Jaya, named Perniagaan Gluck. The other hardware shop chosen is located in
Port Dickson, Negeri Sembilan, called Cemerlang Indah Hardware. Perniagaan Gluck is
a partnership business whereas Cemerlang Indah Hardware is a legacy business.
Through the whole process of compiling this report, we had gained knowledge about
hardware business systems, their problems faced, main products and the competitors.

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History Description of Hardware Business
Hardware’s category covers establishments primarily engaged in the retail sale of
a number of basic hardware lines, such as tools, builders' hardware, glass, cutlery,
house wares, and household appliances. Besides, hardware also covers the
establishments which specialized in a particular line of hardware, such as paint or
wallpaper stores.
Hardware remained a healthy, growing business in the early part of the new
millennium. In colonial America, hardware stores were the earliest retail establishments
which sell tools that are imported from England. The oldest hardware store in USA was
Elwood Adams Hardware in Worcester, Massachusetts. Founded by Daniel Waldo and
son in 1782, it was still in business in 1999. The first American manufacturer of
hardware was probably John Ames, a blacksmith in Bridgewater who established a
factory for making shovels in 1774. Ames' shovels became indispensable to American
settlers.
The American Industrial Revolution in the early 1800s had greatly increased the
availability of manufactured goods and spurred the growth of general stores that
stocked basic hardware. The industrial revolution also gave rise to factories that could
supply more goods than nearby communities could use. In the last half of the 19
century, the hardware industry began to acquire distinct manufacturing, retailing
segments and wholesaling.
If you want to start a hardware business in Malaysia, you need to have a resale
license to allow your store to buy goods tax exempt from a manufacturer or distributor.

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Besides, you also need an Employer Identification Number (EIN) which is also known
as Federal Tax Identification Number, to identify your business entity. Furthermore,
Business Name Registration or DBA Certificate is also needed when you use any name
for your retail business other than your own personal name, you'll need to file the
appropriate paperwork.
Before you start your hardware business, you need to choose a location and
study the competitors in the area. Next, choose a 20K to 30K square feet or larger
hardware store to install shelving and display cases. Then, get your stock from three
sources such as hardware wholesalers, direct from the manufacturers and secondary or
specialty distributors. You can also advertise your retail hardware store with low-price
image and put on convenience shopping.

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Description of Businesses Chosen
Perniagaan Gluck Cemerlang Indah Hardware
Location No. 3, Jalan USJ 17/2
47630, UEP Subang Jaya
Selangor.
392, 393, Jalan Pantai Bt 1,
Happy Garden,
71000 Port Dickson, Negeri
Sembilan.
Branches and
Employees
Perniagaan Gluck is a
partnership business with no
branches. 3 employees are
hired.
Cemerlang Indah is also the only
one hardware shop they have.
They have 7 employees, including
the owner’s son, Mr. Goh.
Main Products
and Services
- Construction materials. The
best sellers are YTL brand
cements, paint thinners,
paintbrushes and plumbing
fitting.
- DIY products: sponges,
water pipes, blooms and
watering pots. The shop
provides more household
items and products in these
few years.
- Construction materials:
cements, woods, sand and
steel. Basically, they sell the
materials to construction
business.
- DIY products: screws, toilet
accessories, JOTUN brand
paints (target on families)
- Others services: key
duplication

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Estimated
Current Number
of Customers
- Daily number of customers:
approximately 150 (with age
range of 20 and above)
- Main customers are the
workers who in the area of
supplier, construction
business, plumber,
electrician and painting.
- The business is good
because prices are
reasonable and it provides
good service attitudes and
fast delivery services.
Customers were highly
satisfied and were willing to
come back.
- Daily number of customers:
around 80 (uncertain and
unstable)
- The shop also serves suppliers
but there are not many
competitors near their area so
CEMERLANG INDAH is a
good choice for the customers.
- It gives the best, tries to fulfil
their customers’ needs and
demands to maintain the
relationship.
When were the
businesses
founded?
The business was founded in
2000. It has operated for 15
years until today.
The business began in 1984. It
has operated for 31 years until
today.
The Business
Founders
The founders were Mr. Tan and
Mr. Liew, working as partners.
Now Perniagaan Gluck is
operating under two bosses.
The founder was Goh Sin Sing.
He started the business together
with his friend who works as
contractor but after a few months
his friend decided to quit. Now he
is on half retirement state, the
business had been passed down
to the next generation which is
Mr. Goh's son. Mr. Goh does not
work in the shop every day. He
will only check on their business
accounting reports.

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Motive for
Starting The
Businesses
During the period when
construction businesses of our
nation were beginning to grow,
Mr. Tan and his friends decided
to start up a hardware
business.
It happened by unexpected.
When he meet his uncle in
Singapore, who encouraged him
to involve in business instead of
being a wage earner. He then
decided to start up a hardware
business.
Recent
Development
Recently, they had a new idea
of starting an online business
due to the technology trends.
Nowadays, many people are
interested at DIY (do-it-your-
self), this makes up Mr. Tan
idea to start online business. It
is still in progress and they now
are testing on a Facebook
pages, PERNIAGAAN GLUCK
They will keep improving.
There is not much new
development in their business;
they will continue to manage well
and try to satisfy their customers’
needs while maintaining
relationship with them.

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Comparative Analysis
There are quite a number of
businesses trading in hardware
market in close proximity,
approximately 15 shops.
i) Competitors
Only a few hardware shops
other than Cemerlang Indah
are located in the area. None
of them is considered as
strong competitor.
1-Ng Brother Hardware
It is a wholesale hardware
business in Subang Jaya, with
a wide variety of products,
including hardware supplies,
building materials, timber,
paint, roofing and many more.
ii) Brief bios of
competitors
2-Petaling Hardware
Being categorized as a
hardware wholesaler,
manufacturer and store, it has
almost taken over the control
of hardware product price and
becomes a great influence in
the area.
3-Sia Trading Co.
With its diverse product variety
and fast delivery system, Chia
Trade is one of the leading
hardware businesses in the
area. Customers are satisfied
with its efficiency and
guaranteed services.

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Put customers as priority
- Always perceive clients’
needs as a guide to upgrade
product options and services
- Ex: High-tech and easy
operate tools such as laser
machine are recently sold for
customers’ convenience.
iii) Business
competing
Strategies
Friendly Working Ethics
- Being a family-like
business, it focuses on
providing the best quality of
services to the customers.
- They always satisfy
customers by fulfilling their
needs and demands. Help
is offered to every
customer. Prices are set
according to customers’
value.
Quality of services
- Not only setting the prices low
could satisfy the customers,
they choose to focus on
serving methods.
- Ex: Seeing the trend of e-
store as an opportunity, they
are currently towards the
progress of providing online
service to the customers.
Monopolistic competition
- Surrounded by many
business competitors trading
the similar products, product
variety externality occurs in
Perniagaan Gluck.
iv) Nature of
market
Oligopoly
- There is no strong
competitor for Cemerlang
Indah Hardware. It has a
relatively great control over
the product prices in that
area.
Approach IT and technology
- Developing on their own
Facebook page and an online
v) Most recent
development
There is minimal recent
development in Cemerlang
Indah Hardware.
Cemerlang Indah Hardware

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store website:
- to generate new business
opportunity
- to provide professional
services to clients
- to keep clients updated of
most recent items
focuses on maintaining sales
growth and business
management. Meanwhile, it
keeps track on customers’
latest demands and needs to
strive for the best products and
services quality it could.
vi) Obstacles faced by new hardware businesses
1. Capital assets
Hardware businesses are goods producing business. They require lots of capital
assets and this can become a barrier to entry, which means obstacle for new
businesses to get started in a market.
2. Knowledge and Business Skills
A new business owners who start as a sole trader will need to learn much in a short
period of time. Even if they have strong product knowledge, there will be areas that
they are weak at, such as marketing and managing employees.
3. Competition
New businesses will be facing rival companies that are already trading in the similar
markets. They have the upper hand and advantage as they have been operating for
a longer time, with more knowledge and experiences gathered.
4. Time Management
To start a business, lots of works have to be done, comprising of setting goals and
plans, decision of task to concentrate on, products selection and hiring employees
with desirable working ethics. This situational could lead to stress and pressure on
new business owners if time is not managed well.

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vii) Summary Table
Similarities
Hardware supplies and
construction materials
Main products
sold
Hardware supplies and
construction materials
3 immigrants are hired Workers 6 immigrants and the owner’s
son.
None Current branches None
Local customers Targeted market Local customers
Differences
Mr. Tan and Mr. Liew founded
Perniagaan Gluck in 2000.
Previously, seeing the
development in construction
businesses in our nation as an
opportunity, they started a
hardware business along with
some of their business associates
at Bukit Beruntung, Rawang. As
the economy was stabilized, they
were soon separated and began
operating their own businesses.
Founder and
History
Mr. Goh Sin Sing founded the
business in 1984 in Port Dickson.
He was once a policeman who
was then inspired by his uncle to
start his own business. Now, Mr.
Goh has given his business share
to his son. Mr. Goh is now in half
retirement state that only checks
on the business income statement
report once in a few months.

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Perniagaan Gluck is a standard
hardware shop located in USJ 17,
Subang Jaya.
Address:
No.3, Jalan USJ 17/2,
47630, UEP Subang Jaya,
Selangor D.E., Malaysia.
Location Cemerlang Indah Hardware is
located in Port Dickson, with two
shop lots combined.
Address:
392, 393, Jalan Pantai BT 1,
Happy Garden, 71000 Port
Dickson, NSDK, Malaysia
Construction materials, DIY
products, household items
Types of
products and
services
Construction materials, DIY
products, key duplication service
Around 150 customers per day Number of
customers
Around 80 customers per day
- Featured on Facebook page
- Online selling website
Media None
Provide DIY tools and household
items instead of focusing on
hardware supplies only. Hence, it
attracts customers from different
work fields and even families from
the nearby residences.
Combating
competition
Since it is a family-like business,
provides good services and offer
helps to customers from time to
time. Their friendly working ethics
are one of the key attitude towards
getting and retaining customers.
Longsighted Future Plan Shortsighted
Very well-organized, with selling
products neatly categorized and
arranged on rows of racks.
Shop layout
and
atmosphere
It is a combination of 2 shop lots,
providing a wide area with variety
of products sold. However, it
presents a rather traditional shop
environment as some products
sold are crammed together.

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viii) Conclusion
Based on our research and analysis, we have come to an indisputable
conclusion stating Perniagaan Gluck is more commercially successful to be compared
to Cemerlang Indah Hardware. It possesses a higher potential of business development
and success whereby the manager has the quality of insight despite the fact that its
shop area is relatively smaller than Cemerlang Indah Hardware. He is able to envision
what the business should do so it leads towards a more profitable and successful future.
On the other hand, Cemerlang Indah Hardware is practicing traditional methods in
handling its business. It does not have a clear direction and future plan as an inspiration
for the business team to strive for a higher quality guaranteed business.
In terms of combating competitors, Perniagaan Gluck has its own specific
business strategies as it always keep track on the current society trend and customer
demands, leading towards its most recent development in generating online services.
As for Cemerlang Indah Hardware, it is an advantage that it consistently gives positive
impression towards its customers by showing friendly attitudes but to look at its long
term effect, this strategy possesses minimal potential towards getting more customers.
As of now, Perniagaan Gluck is considered as a more competitive business but
having to say that, every business has its own motive and methods of managing it. After
all, to earn an independent business similar to Perniagaan Gluck and Cemerlang Indah
Hardware, one should have the basic business knowledge and set a clear path to direct
towards ones specific business goal.

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Recommendation
Perniagaan Gluck
Based on our interview with Mr. Tan, we could observe that the manager is an open
minder. He has an intention of generating global business via online website to serve a
wide range of people. Therefore, we recommend him to
a) Determine efficiency of strategies if they want to start an online business.
They should consider the business economic climate factors of business such as
Economic projections for national economy over the next three to five years and
Economic projections for his region and city. They should get a clear direction on
their future.
b) Improve on their weakness spots.
They need to observe and know the strength of competitors as well as their own
weaknesses. For example, they can set strategy to cut down the product prices
at below normal market prices and provide better services such as efficient
delivery to compete with others.

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During the interview in Cemerlang Indah Hardware, we found that the owner is still
utilizing traditional methods in managing their business. For instance, they record their
accounting and business report by hand writing. Our recommendations are as below:
a) Improve services by approaching IT and technology
They should open an official page to get their customers’ feedback and to allow
people to know about their business. Besides, it is a good way of promoting and
advertising as IT trends is growing rapidly in our society recently. Meanwhile,
they can improve on their services based on clients’ recommendations to
increase their reputations.
b) Motivate employees or staff
By being a democratic styled business leader who keeps customers involved in
decision making and makes them part of the team, Mr. Goh can earn their loyalty
hence improving their working ethics and attitude despite eliminating their
laziness. He should build a good relationship with employees too.

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Bibliography
https://www.facebook.com/perniagaan.gluck?fref=ts
http://www.malaysia.com/directory/retail-around-the-home/construction-materials-
hardware-paints-and-glass/negeri-
sembilan/Cemerlang_Indah_Hardware_Sdn._Bhd._164280.html
http://panpages.my/listings/my184936-cemerlang-indah-hardware
http://www.malaysia.com/directory/wholesale/household-appliances/negeri-
sembilan/Lih_Shing_Hardware_P.d._Sdn._Bhd._68809.html#ixzz3NCRI17UX
http://www.businesslist.my/company/107389/pd-hardwareconstruction-sdn-bhd
http://www.businesslist.my/company/93709/pd-percomp-centre
YouTube links
https://www.youtube.com/watch?v=QptP8_W3C8Q&feature=youtu.be
https://www.youtube.com/watch?v=1UOsy1Fho-4&feature=youtu.be
https://www.youtube.com/watch?v=2UmJuUP5EdM&feature=youtu.be

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Appendices
i) Appendix A
The Chosen Businesses
a) Perniagaan Gluck
Address: 3, Jalan USJ 17/2, Usj 17, 47630 Subang Jaya, Selangor.
Map: (taken from Goggle Map)
Shop sign:

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b) Cemerlang Indah Hardware
Address: Address: 392,393, Jalan Pantai Bt 1, Happy Garden, 71000 Port Dickson,
NSDK, Malaysia.
Map: (taken from Google Map)
Shop sign:

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iii) Appendix B
Photos
a) Perniagaan Gluck
All the goodsare kept
well andare arranged
on the shelf
accordingly.This
givesa convenient
environmentbothfor
workersand
customers.
All the accessoriesare
well arranged.Even
the new drivers’‘P’
stickersare available.

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Theyare sellinghousehold
productstoo. Forexample,
the wateringbucket,
differentsizesof pailsand
nylonstrings.
One of the bestsellers:
YTL cement.

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Paints are being
stacked on each other
so that they would not
drop off from the
shelves and this also
eases the workers to
search for different
types and colours of
paints.
The workerwas
assistingthe customer
(the manwearing
white shirt) toselecta
broomwanted.

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Mr. Tan’s
workplace
A groupphoto
withMr Tan after
interview.
Mr. Tan C.S.,
Perniagaan
Gluck’sowner

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b) Cemerlang Indah Hardware
The main shop
view- It is filled
with variety of
tools and brands
for customers to
choose from.
Mr. Goh Sin Sing’s
eldest son (also
the current person
in charge of the
shop) is busying at
his workplace.

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The common paint
brand available in
the shop: JOTUN
Modernpaint
makermachine
The products and
boxeswere put
everywhere.Thisis
dangerousasthe
personpassingby
may gethitby the
goods.

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A groupphotowith
Mr. Goh SinSing
afterthe interview
Mr. Goh Sin Sing

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iv) Appendix C
Minutes of Meeting
Meeting 1
DATE: 10 December 2014
TIME: 12.00pm – 2.00pm
VENUE: Computer Lab, Library Level 2
NAMES OF GROUP MEMBERS TUTORIAL GROUP ROLE
Hwang Wei Li 2 Leader
Yap Jia En 1 Researcher
Chong Hui Xin 1 Researcher
Tan Sheau Hui 2 Secretary
Chee Wei Shan 2 Researcher
NO. ACTIVITY ACTION TAKEN BY
1. Research information (address, brief history,
Person in charge of the shop)
All members
2. Confirmation on appointment date and time All members

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Meeting 2
TIME: 10.00pm – 11.30pm
VENUE: Media via WhatsApp
NAMES OF GROUP MEMBERS TUTORIAL GROUP
Hwang Wei Li 2
Yap Jia En 1
Chong Hui Xin 1
Tan Sheau Hui 2
Chee Wei Shan 2
1. Discussion on roles to be played by each member
that will attend for the interview on following day
Name Role
Hwang Wei Li Interviewer
Yap Jia En Interviewer
Chee Wei Shan Recorder
Chong Hui Xin Videographer
*Tan Sheau Hui was absent (went for vacation)
All members
2. Confirmation of the shop location All members
3. Discussion on preparation for the interview All members
4. Translation of interview questions from English to
Chinese
Hwang Wei Li

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Meeting 3
TIME: 1.00pm – 2.45pm
VENUE: Student Life Center
Hwang Wei Li 2 Secretary
Yap Jia En 1 Researcher
Chong Hui Xin 1 Secretary
Tan Sheau Hui 2 Analyzer
1. Division of report’s section for each members All members
2. Draft conclusion of data collected from interview
(Cemerlang Indah Hardware Shop, Port Dickson,
Seremban)
All members
3. Discussion about the video recorded from the
Interview to relate to the report’s content
All members
4. Discussion about the next interview at Perniagaan
Gluck, Usj 17
All members

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Meeting 4
DATE: 06 January 2015
TIME: 1.30p.m. – 3.30p.m.
VENUE: Library Level 3
Hwang Wei Li 2 Secretary
Yap Jia En 1 Absent
Chong Hui Xin 1 Video-editing
Tan Sheau Hui 2 Researcher
1. Phone to finalize the information
about the shop (Cemerlang Indah
Hardware Shop in Seremban)
Tan Sheau Hui , Chee Wei Shan
2. Arrange and finalize the information
collected from interview and other
sources
Chong Hui Xin, Hwang Wei Li
3. Report to everyone about the
progress of their part for the report
All members

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v) Appendix D
Interview Questionnaire and Results
Perniagaan Gluck Interview Questions Cemerlang Indah Hardware
Our business started in the
year 2000.
When was the business
founded?
My business started in year
1984.
Actually when we first
started this business, there
were 2-3 shareholders. One
of them is Mr. Liew, my
current partner of Gluck
hardware shop.
Who is the key founder? I am the founder of the
business.
-That time, the construction
industry of our country was
beginning to grow.
-Our first location of the
hardware shop was at Bukit
Beruntung, Rawang.
-When the business had
stabilised, we separated and
opened our own shops.
What prompted you to start
the business?
-Previously, I was a pig
husbandry, planting palm oil
and rubber trees.
-Then, by unexpectedly,
when I went to Singapore I
met with my uncle who
encouraged me to do
business instead of being a
wage earner.
-Soon, a person named Goh
who worked in construction
field asked me to partner up
to start a hardware business.
I then became a contractor
for the developer.
-Later on when I had a stable
finance, I started to do
hardware business.

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-Mainly hardware materials
and construction materials.
-We also provide services
based on customers’ needs
such as solving household
and technical problems.
-We will try to satisfy them
including delivery goods and
update on products variety.
What are your main
products or services?
-Mainly hardware materials.
-We also sell cement, iron
materials, wood materials,
paint tools.
-Piping materials are
available in the shop too.
Previously our targets were
contractors, construction
workers and renovation
workers. Recently, our main
customers have changed to
household type.
Who are your customers in
terms of occupation?
-Mostly sub-contractors
rather than main contractor
because doing businesses
with main contractors are
risky.
-there is no age range.
Estimated figure is
10,000,000.
What is your business
annual revenue figure?
-When facing financial
needs, we sell land to invest.
Today, we own many shop
lots, houses and stores.
*Interviewee refused to give
a specific figure.
-Like I said before, we
separated from Bukit
Beruntung and operate our
own business now. This
can’t be considered as
having branch offices.
How many branch offices/
stores do you have?
-I don’t have any branch
store.

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-Yes, a lot
-Currently, there are at least
1 to 2 hardware shops in the
nearby housing area, which
are also our competitors.
- Now then China trading
market is open and if you
have the ability, you can
directly take goods from
there.
- Results in more shops
opened to sell off the goods
imported from China.
Do you have many
competitors? Who are
they?
There are only a few
hardware shops here. We do
not compete with others.
Ng Brother hardware,
Petaling hardware and Sia
Trade hardware.
Can you list out your top 3
competitors?
-
Basically, every area has
the shops that have the
superiority because it is
related to price and history.
So if your service is good
and price is cheaper or
delivery is efficient you will
be the dominant.
How big is your market
share as well as your top
competitors?
-I don’t give others my share.
-But now I’m half-retired and
all are under my son’s
management.
Yes.
-since China market is open,
for those that have ability,
they will directly take the
Is your business constantly
facing strong competition
from other competitors?
-can’t said no competition.
–but we don’t care so much.
Just sell as usual.
-not affected as the things

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goods from there. .
-they open more shops to
sell the goods
-More competition causes
price becomes competitive.
sold are the same.
-if salesman introduce us the
product, we will sell it but
only about a month.
-salesmen are good to us as
they will tell us whenever a
new product arrives.
-there are changes from
time to time. We
consistently update new
products. For example, the
Laser machine. Those days,
it was very complicated. But
now, it is easier to be used
regardless of age.
How often do you release
a new product?
Yes, the new products
basically are household
products.
-basically no because there
are always shops that are
cheaper than you.
-my business’s direction is
service attitude. This is the
most important.
Are your pricing decisions
strongly affected by your
competitors?
-We don’t compete with
others. A little profit earned is
fine. Prices are determined
by salesman. If it is too high,
change another one.
-Our motive is to help the
customers.
Nowadays, the capital are
getting higher
-open a small hardware
shop will need around
RM150,000 to 200,000.
How much capital is
required to start this
business?
-capital only 156 ringgit from
my pocket at first.
-Soon, my friend encouraged
me to partner up and all
supplies came from his
company.

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-Now it is easier than those
days.
-Those days, it is impossible
to directly get the goods
because the trade has yet to
be developed.
- More capital is needed to
buy goods and one had to
pestered with debts.
- Now, since China market
is open, most of the
products are from there.
- It will be easier if supplier
support you and vice versa.
Generally, do you feel it is
easy or hard to enter this
market? Why?
Hardware business is a type
of business that just feed you
enough for your daily life
routine. Sometimes people
are troublesome. This
business more or less will
have conflict.
-By continuously changing
our service attitude, price
range and continuously
finding new products.
- Service is the most
important because
customers are very concern
about it.
-although your price is a
little higher, customers will
still come to you if you have
friendly kind of service.
What strategies do you
employ to divert customers
away from your
competitors?
-

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vi) Appendix E
Documents
a) Business Card
Perniagaan Gluck

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References
Mr. C. S. Tan (personal communication, January 1, 2015)
Mr. Goh Sin Sing (personal communication, December 26, 2014)
Reference for Business. (n.d.). Retrieved January 10, 2015, from
http://www.referenceforbusiness.com/industries/Retail-Trade/Hardware-Stores.html
Spengler, E., & Klein, J. (1955). Introduction to business (4th ed.). New York:
McGraw-Hill.

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