EconsFinal-Report.docx

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SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
FOUNDATION IN NATURAL AND BUILT ENVIRONMENT
PRINCIPLE ECONOMICS (ECN30205)
Report Title: A Tale of Two Businesses – A Comparative Analysis of 2
Businesses of Similar Industry in Different Geographical Locations.
Group members:
Tan Yong Chien (0320200)
Chong Wai Loon (0319745)
Lecturer/ Tutor : Miss Tay Shir Min
Submission Date / Presentation date : 22th of November 2015

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Content
Content Page
Cover Page 1
Table of Content 2
Key Summary 3
Brief Bio of the Business 3~5
Comparative Analysis of the Business
Competitive Traits
- Number of competitors
- Brief Biodata of top 3 competitors
- Strategies of Businesses
- Obstacles faced by new businesses
- Nature of Markets
- Justifications
- Comparative Analysis Summary Table
- Analysis
6
6
6,7
8,9
10
10,11
11
11
Recommendation 12
Appendices 13,14,15,
16,17,18
References 19

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Key Summary
We were assigned to interview two businesses of similar industry in
different geographical locations. After we had discussion with each other,
we made up our mind to compare chicken rice businesses in Klang Valley
and in Penang. In Penang, we interviewed a chicken rice stall named Hong
Kee Hong Kong Roasted Rice at Taman Islands Glades, Jelutong. On the
other hand, we also interviewed Leong Shifu BBQ Chicken Rice stall at
PJS7. After analyzing all the data and information we gathered, we
concluded that Hong Kee Hong Kong Roasted Rice is more commercially
successful than Leong Shifu. Lastly, both businesses are having Oligopoly
Competition.
Leong Shifu BBQ Chicken Rice
Hong Kee Hong Kong Roasted Rice

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Brief Bio of the Businesses
This BBQ Chicken Rice business was interviewed at Bandar Sunway PJS
7/11. It is a strategic location where it is located next to a Kuil, Petrol
Station, Residences area as well as Taylor’s University. His business stall
is just right facing the coffee shop’s entrance. The interviewee is the
founder of this business, Mr. Yap Chee Leong. He founded this business in
the year of 2000. It has been 15 years he manage this business. The name
of his stall is basicallybased on his name, Yap Chee Leong. For the past 5
years Mr. Yap had thought of opening a shop of his own chicken rice but
considering of his children are still too young, he chose not to take the risk
at the moment and currently he has his stall with 3 employees in the coffee
shop with no branches yet. Besides, his operating hours is from 10am to
3pm every day. He said that he will open a shop for his own business in
the future. Back in time, Mr. Yap used to be a waiter to serve in the coffee
shop for several years. What prompted him to start his own business was
his family, he wanted to provide his family with a financial freedom
environment thus he had the urge of starting his own business. It was a
herculean task for him to gain customers in the beginning of his business
because for an oligopoly business like his will face a lot of competitors in
the market. At first, he only manage to serve a few customers and only
sells not more than 15 plates each day. Nevertheless, he didn’t give up but
to make more effort to carry on his business that’s why he made it to his
accomplishment today.(minimum of 10 chickens sold per day) Besides, he
also found that it is more interesting to manage a business instead of
getting paid monthly. The main product he sells are roasted pork and

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barbecued pork. The roasted pork is the most demanding dish, of all the
tables in the coffee shop, you will find majority of the people are having
roasted pork rice. Moreover, Mr. Yap will at least have 100-120 customers
in a day. Especially during lunch time, the amount of customers will be
twice the amount as compared to other time, this is why he provides take
away services for the customers as well. His regular customers are mainly
from Taylor’s University students and PJS’s residences.

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Hong Kee Roasted Chicken and Duck rice
Hong Zai Roasted Chicken Rice has been operating since the year of
1992 until today. The name of his business named as Hong Kee because of
his name Woo Hong Khai. He is also recognized as the “Hong Zai” from
the customers when he started his business. The founder was Mr. Woo
Hong Khai at twenty three years ago. As we interviewed with him, he told
us about the urge of why he started his business. Back in time when he
first graduated in 1990, he did not continue for further studies due to his
family couldn’t afford the tuition fees for colleges or universities. He had
no choice but to get a job for himself. He was hired as a kitchen assistant
in a chicken rice shop. After years of working as he gained more
experiences in chicken rice industry, it comes to a huge turning point in his
life, a friend of Hong Zai offers him an opportunity to operate a stall that
sells chicken rice in his coffee shop. Therefore, Hong Zai began his
business with the support from his friend. So far Hong Zai has 2 branches
in Penang which located in Taman Islands Glades, Jelutong, Penang, a
well-known place for its local food. He said he couldn’t expand more
branches at the moment due to the limited employees he has currently,
only 6 employees, 2 business partner, one of them is his blood-related
sister. During the very first few years of his business he only sells normal
chicken rice, but as time goes by he receivednumerous of feedback from
the customers to sell various type of chicken rice as others are doing.
Today, not only chicken rice but he also provides roasted pork as well as
roasted duck. Roasted Duck has become the main plate for his business.
Approximate of fifty percent of his customer came up just to have a taste

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on his signature and delectable Roasted Duck rice. Moreover, residences
that live nearby are his regular customers whose visit his stall up to few
times a week. In his recent business result among these few years, the
average portion that he sold per day is about 150 ~ 200 plates or
above.(each branch) As the clocks strikes twelve sharp in the noon, he
began his busiest time for the day. The customer will all queue up to make
orders. We even waited 3 hours for him just to finish his work to get into
our interview session.
Interview sessionvideo :
https://www.youtube.com/watch?v=AVPVi5RcpJU
Source : YOUTUBE

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Comparative Analysis of Businesses Competitive
Traits
1) Number of competitors in their respective markets
- Leong Shifu BBQ Chicken Rice, located at Bandar Sunway PJS
7, Selangor. In Subang, there are over 60 competitors in the
market and about 14 competitors within the area.
- Hong Kee Roasted Duck and Chicken Rice, located at Taman
Islands Glades, Jelutong, Pulau Penang. In Jelutong, there are
about 40 competitors in the market and about 8 competitors
within the area.
2) The market share of the business and its top competitors
- In Subang, Leong Shifu’s market share is small considering of his
child is still young and its top competitors in the market would be
Garlic Roasted Chicken Rice Shop which is at Bandar Sunway
PJS 11/7, and The Chicken Rice Shop as well as Ipoh Nga Choy
Chicken 1977 both located in Sunway Pyramid mall.
- In Jelutong, Hong Kee’s market share is small because he has
only two branches with his two partners to manage his business.
There are a few of competitors when he running this business and
the top competitors would be the Peng Yang Chicken Rice which
is a well-known chicken rice shop in Penang Island which located
at Jalan Pancur, Jelutong. Another top competitor will be the Kim
Poh Roasted Chicken Rice and finally the nearest chicken rice
shop from Hong Kee which located at Jalan Slim, Jelutong.

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3) Brief Biodata of Businesses Top 3 Competitors
Leong Shifu:
a) Garlic Roasted Chicken Rice Shop which located at Bandar
Sunway PJS 11/7 is famous for their unique style of roasted
chicken. As we know from its name, the chickens are marinated
with garlic sauce before the roasting process comes in. Moreover,
it’s barely to get a plate of chicken rice at only RM4 within
Subang area, due to its affordable price and the unique taste of the
chicken meat, those are the factors that attracts the crowd.
b) The Chicken Rice Shop in Sunway Pyramid is a well-known
chain restaurant in Malaysia. With the consideration for the
Muslims, this restaurant provides a completely halal menu for us.
Although the restaurant is getting more commercialised compared
to the others, they still serve traditionally prepared steamed,
roasted, braised and honey barbecued chicken as its signature
products.
c) Ipoh Nga Choy Chicken 1977 located in Sunway Pyramid is
famous for their signature bean sprout chicken. There is a choice
of kampung chicken or ordinary chicken cooked either by
roasting or boiling. The boiled kampung chicken has a smooth
and soft texture, along with their special homemade sauce which
makes it their recommended dish at this place. Along with their
friendly services and the environment in the restaurant, it’s air-
conditioned thus more comfortable to have your meal in the
restaurant.

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Hong Kee:
a) Peng Yang Chicken Rice located at Jalan Pancur, Jelutong is
famous for their homemade chicken rice for the past few
years. Almost every citizens in Penang will probably knew or
heard of this shop before. Their unique chicken rice and the
taste of Peng Yang chicken rice attracted not only local
customers. Even tourists were also suggested to visit this shop.
It was famous with roasted chicken served together with the
homemade sauce, it tasted a bit salty and with slight sweetness
in it.
b) Boo Kee Chicken Rice that originally located at Air Itam,
Penang, soon shifted to Jalan Perak, Jelutong which is just
fifteen minutes of walking distance from Hong Kee. As Boo
Kee located in Jelutong, it becomes one of the top competitors
for Hong Kee. Boo Kee is famous for their steamed chicken
rice and braised chicken rice. These chicken rice are served
with a small bowl of speciallymixed up minced onion and
minced garlic in soy sauce. The sauce is the main reason that
made the chicken rice tasted so delicious even when steamed
chickens are tasteless.
c) Kim Poh Roasted Chicken which is at Taman Yew Lean,
Jelutong is famous of its roasted pork and friendly services.
Their roasted pork tasted differently from any other shops.
Because he did not buy the prepared roasted pork to be served.
He roast the chickens and pork himself with his own signature
method. The soup they serve inclusive of spices that makes the
soup tastes better and it works perfectly with the roasted pork.

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4) How do the businesses compete with their competitors
Leong Shifu
Mr Leong knew he was in for some tough competition when he opened
his stall in the year of 2000. After 15 years of managing, today his
business is still growing and developing. It became a familiar chicken rice
for the people within this area.
- First of all, Mr Leong found an area with few competitors that don’t
serve food similar to his. Forinstance, at the year of 2000, there was
no other stall or restaurants that sells chicken rice within this area. He
then survived with other types of restaurants without having to fight
each other.
- Subsequently, his business delivers a service that nearby competitors
can’t match, such as higher quality and faster service as well as
offering lower prices than his competitors without compromising the
quality of the food and service.
- Mr Leong himself also spend some time with his customer to receive
positive and negative feedback for himself to reflect on.
- Furthermore he also considers of more variety of food for the
customers such as roasted pork and barbeque pork instead of chicken
only. Meanwhile he also spends his weekend creating more interesting
and delectable dishes such as his signature dish (roasted pork rice) as
well as his homemade recipe sauce for his business.
- Considering about the hygiene and freshness of the product, Mr Leong
will not serve customer overnight food. He would rather wake up
earlier in the morning to prepare and cookso that his productis
guaranteed fresh and delectable for the consumers.
- Lastly, price of his productis set at an affordable price and doesn’t
raise significantly over all these years to ensure the consumers eat
happily.

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Hong Kee
Mr. Woo knew that starting this business by opening a new shop
needed a bigger capital as compared to open a stall. Therefore he
chose Jelutong, Penang to start his duck rice stall business as the
population density there is higher as compared to other cities as it
consists of more residential area.
- At the first few months as he started his business. His working
hours was more than twelve hours which occupied half of his days.
He spent most of his time to work on his own recipe and the taste of
the product. The purpose is to create his own signature taste for his
product and stall so that he will gain more customers.
- Moreover, not only the quality of only one food have to be
delicious. Hong Zai also provided many variety in chicken and duck
rice category such as roasted duck, roasted pork, barbeque pork and
also roasted chicken. He wanted his customers to have more variety
so that they will not get bored of his product.
- He wakes up earlier in the morning and starts his roasting job up to
3 hours long. Hong Zai refuses to sell overnight food as he know
that it is unhealthy and the quality of food will drop. He ensures
100% fresh of products.
- Furthermore, Hong Zai also considers about the cleanliness and
hygienic of his stall. Everyday before setting up the stall, he wipes
and cleans up to ensure that the stall that he sells his product is clean
enough. He did the same thing as he closes his shop.
- He trained his employees to be friendly when they serve the
customers. He wanted the consumers to eat happily so that they are
willing to come back next time. Moreover he is also glad to receive
both negative and positive feedback from the customers in order to
make more improvement in the future.

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5) What are the obstacles faced by new businesses who wish to
enter their markets today? Are they easy or difficult to
overcome? Why?
To enter the chicken rice market is relativelyeasy as it does not
require a very high capital to start off the business. However Mr
Leong pointed out several obstacles that new businesses will
encounter, for instance they will need to get a chef or to equip
themselves with good cooking skill. Besides, one of the biggest
obstacles faced by new businesses is that the supply is more than the
demands which means that the customers are too less and the unsold
food have to be expelled. Hence, they will have to estimate the
specific amount of stocks that he have to order to prevent wastage.
Another obstacle would be the complaints and irritation from those
arrogant customers that not only make complaints, however they
also spread the negative comments to the crowd. As words spread, it
requires time and some positive comments to recover their
reputation. Another obstacle is because of the presence of other
businesses providing the same products, therefore customers will
make comparison of the products. Moreover, getting raw materials
from a good supplier is also one of the main consideration. Not only
about mastering their cooking skills, they also have to be innovative
to cook new products in order to attract more customers.

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6) What is the nature of their markets
Both of their markets are Oligopoly Competition. In a market of
Oligopoly Competition, it is easy to enter and this firm has many
competitors, but each one sells slightly different product and both
have some price difference as well.
-Justifications
a) There are at least 60 competitors within Subang area. This
proves that there are many firms in this market thus easy to
enter.
b) They have different prices in this market as well. Smaller
business like Leong Shifu, he employs lesser workers and
supplier. Large business such as Hong Zai hires more
employees and has more supplier to provide various type of
raw material. This is why differences in price is formed, as
compared Hong Zai would be slightly more expensive.
c) Lastly, the market also sells various types of dishes, in order to
compete against competitors, market like Hong Zai sells more
than 2 variety that is chicken, pork as well as duck.

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7) Analysis
Competitive Traits Hong Kee
(Penang Based)
Leong Shifu
(Klang-Valley Based)
Number of
Competitors
20~40 40~60
Pricing Power Weak(Price Taker)
The price he set will
not affect the market
price.
Weak(Price Taker)
If their price is higher
than market price they
will lose customers
due to numerous
competitors around.
Barrier to Entry Strong- Penang is
well-known for its
famous historical local
food therefore new
stalls will be slashed
by the old stalls.
Strong- they have had
their original
customers. Most
customers will not risk
to try new stall.
Differentiated or
Standardized Product
Differentiated, eg.
Roasted Duck that
most of the firms
nearby don’t provide.
Standardized.
Other Characteristics No close product
substitutes nearby,
inconstant advertising.
Mutual dependence,
due to they are
operating with other
stalls in the same
restaurant.
Inconstant advertising.
Verdict OLIGOPOLY
COMPETITION
OLIGOPOLY
COMPETITION

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In a nutshell, we concluded that Hong Zai would be more commercially
successful. This is mainly because of its business’ annual revenue is higher
as compared to Leong Shifu. Even though they both sell the similar
product, but Hong Zai offers more variety of menu as compared to Leong
Shifu. Due to its strategic location which located in the main town of
Penang, they are more likely to have more customers as compared to a
lesser population area in PJS 7. Nevertheless, both of them are quite
famous in their own state. It wasn’t easy for us to make decisions but we
still have to make a choice. Eventually, we’ve chosen Hong Zai.
Comparative Video link:
http://youtu.be/WlQs238bt2U

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Recommendation
Leong Shifu
- Firstly seeing as the business has a considerable amount of customers
in the nearby region it would be most beneficial towards the business
to advertise his products and services to a larger crowd in further more
distant areas. This can be done in an old schoolway by manufacturing
posters and flyers or online using social media such as Facebookand
twitter to promote the business exponentially.
- Another area of improvement can be the price. At first glance there
would be nothing wrong with affordable prices thus creating higher
demand for his business but seeing as there are 14 other chicken rice
shops within close proximity and he prides himself on selling freshly
made products which must costquite a bit of money buying fresh
produceeveryday. Therefore we recommend that he increase his price
on par or if not a little higher than other competitors which will create
more competition over the long run and he can make more profit.
Hong Kee
- The chicken Rice situated in Penang is one that is shared with a coffee
shop and with the sheer number of customers it tries to accommodate
we suggest that the owner considers hiring one or two more workers
because taking orders and preparing the food of over one hundred
people at a time from a stall especially during peak hours must be very
difficult and tiring especially for two people.
- Another point is to go on is to provide more options to his customers.
By this we mean introducing set meals or new recipes and also
incentives such as discounts at peak hours to increase his current
customer base and also adjust his menu to appeal to a wider
demographic such as adding vegetarian products.

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Appendices
Interview notes
Group photo with Hong Kee Roasted Duck and Chicken Rice
Business Details
Business Owner: Woo Hong Kai
Location: Lot 6, Taman Islands Glades, 41700, Jelutong, Penang
Contact Number: +60164062380

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Group photos with Leong shifu BBQ Chicken Rice
Business Details
Owner’s Name: Yap Chee Leong
Location: PJS 7/13, Bandar Sunway, Petaling Jaya

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1) When was the business started?
- In the year of 2000.
2) Why was the shop name as? Is there any meaning?
- Yes there is, it’s based on my name Yap Chee Leong
3) Who is the founder of this business?
- Me myself
4) What factors that prompted you to start this business?
- To Provide my family a financial freedom environment
- I find it more interesting to have my own business rather than just
getting paid monthly.
5) Do you have any branches?
- Currently no.
6) How many employees do you have?
- I have currently 3 employees to help me with this business.
7) What is the main product?
- Roasted Pork, Chicken and BBQ Pork.
8) Which category is the best seller?
- Roasted Pork Rice.
9) Estimate your customer number.
- Approximate of 100 ~ 120 per day
10)Do you have any regular customers?
- Yes, they are mainly PJS Residences and Taylor’s Uni Students

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11)Competitors
- Garlic Roasted Chicken Rice, The Chicken Rice Shop and Ipoh
Nga Choy Chicken 1977.
12)How do your compete with your competitor?
- Creating my own unique method of roasting my products, as well
as recipe for my products.
- Set the prices at an affordable price for the students and
residences nearby.
13)Was it easy or hard to enter this business?
- It was quite easy to enter this market as it doesn’t require big
capital to operate.
14)Do you encounter any difficulties when you start up this business?
- Yes, the hardest part was to maintain and grow the business. At
first I will need to gather more information and feedback from the
customers to improve my product.
15)Will your pricing decision get affected by your competitor?
- No, I believe the customers would rather choose the taste better
than the price as the prices will not make much differences to the
consumers. Regular customers of mine would prefer the ones
they used to visit.
16)What is your future plan?
- To have my own shop when my children grow up. Probably with
more branches around Subang area.
17)What is the business’ annual revenue figure?
- Minimal of RM12,000 nett.

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Hong Kee Roasted Duck and Chicken Rice
1) When was the business started?
- In the year of 1992.
2) Why was the shop name as? Is there any meaning?
- it’s based on my own name Woo Hong Khai
3) Who is the founder of this business?
- Me myself
4) What factors that prompted you to start this business?
- My friend was the main factor that motivated and supported me
to start a business of my own. He offered me the opportunity and
place for me to operate my stall.
- In the old days my family background was poor and that’s part of
the reasons that urged me to make a change for my life. I want
create my own business to have more earnings.
5) Do you have any branches?
- Currently 2 branches in Bukit Jelutung.
6) How many employees do you have?
- I have currently 6 employees as well as 2 business partners to
help me with the business.
7) What is the main product?
- Roasted Duck, Pork.
8) Which category is the best seller?
- Roasted Duck Rice.
9) Estimate your customer number.
- Approximate of 150 ~ 200 per day (each branch)

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10)Do you have any regular customers?
- Yes, they are mainly from the residences nearby and foreign
tourists.
11)Competitors
- Peng Yang Chicken Rice, Boo Kee Chicken Rice and Kim Poh
Roasted Chicken.
12)How do your compete with your competitor?
- By selling product they don’t provide such as Duck Meat.
-
13)Was it easy or hard to enter this business?
- It was easy to enter this market as it doesn’t require big capital to
operate.
14)Do you encounter any difficulties when you start up this business?
- Yes. Before you know, there is already a few competitors around
and it was really hard to get more customers as most of the
customers were already taken by them.
15)Will your pricing decision get affected by your competitor?
- Yes, People around here especiallytourists will be more thrifty
on food thus if we raise the price of our product we might lose
customers.
16)What is your future plan?
- To expand more branches in Penang in places like Georgetown.
17)What is the business’ annual revenue figure?
- Minimal of RM50,000 nett.

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References
- Trip advisor
llc. (2015). Http://wwwtripadvisorcommy/Restaurant_Review-g298313-
d1432053-Reviews-Ipoh_Chicken_Rice-
Petaling_Jaya_Petaling_District_Selangorhtml.Retrieved 19 May,
2015, from http://www.tripadvisor.com.my/Restaurant_Review-
g298313-d1432053-Reviews-Ipoh_Chicken_Rice-
Petaling_Jaya_Petaling_District_Selangor.html
- Jose, J.O.S.E. .C.A.P.E.L.O. (2014). Business and Entrepreneurial
News. Retrieved 19 May, 2015, from
http://www.marketingquery.com/main-obstacles-barriers-starting-
business
- Lisa, L.I.S.A. .F.U.R.G.I.S.O.N. . (1996). Business and Entrepreneurial
News. Retrieved 18 May, 2015, from http://articles.bplans.com/start-
successful-restaurant-guide/ In-text citation: (Lisa, 1996)
- Demand media , S.T.A.N. .M.A.C.K. (2015). How to Gain Competitive
Advantage in the Restaurant Business. Retrieved 18 May, 2015, from
http://smallbusiness.chron.com/gain-competitive-advantage-restaurant-
business-24162.html In-text citation: (Demand media , 2015)
- Foursquare. (2015. Retrieved 18 May, 2015, from
https://foursquare.com/v/new-restaurant-ipoh-chicken-rice-%E6
- Happy walker. (2014). A Growing Teenager's Diary. Retrieved 18 May,
2015, from http://www.reloadfood.com/2014/12/ipoh-nga-choy-chicken-
since-1977-new-restaurant-ipoh-chicken-rice-mid-valley-megamall-
experience.html In-text citation: (Happy walker, 2014)
- Woo Hong Kai (2015) Interviewed 2 May, 2015.
- Yap Chee Leong (2015) Interviewed 18 May, 2015.

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