SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN

THE DESIGN SCHOOL FOUNDATION IN NATURAL BUILD ENVIRONMENT

Assignment: Comparative Analysis of 2 Businesses of Similar Industry in

Different Geographical Locations

Group Members:

Name Student ID

Abdul Qayyum Shahmie 0320220

Audrey Ting Ming Fang 0320247

Chow Kah Yien 0320300

Fong Wen Ying Cynthia 0320499

Lam Wee Wee 0320129

Lim Zi Shan 0320372

Nurafiqah Zariful 0321196

Sim Chia Ting 0320932

Principles of Economics [ECN30205]

Lecturer: Chang Jau Ho

Submission Date: 22nd May 2015

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TABLE OF CONTENTS

No. Content Page

1. Key Summary 2

2. History of Steamboat Restaurants 3 - 4

3. Brief Bio of the Businesses

3.1 Goh Huat Seng Restaurant

3.2 Tupai-Tupai Restaurant

5 – 10

4. Comparative Analysis of the Competitive Traits 11 -18

5. Recommendation 19– 20

6. Appendices 22 – 26

7. References 27 -28

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1. KEY SUMMARY

In this assignment, a group of 8 would have to collect data and then analyse regarding two businesses of similar industry in different geographical locations.

We chose steamboat restaurants as they are very popular among Asians and can be easily find anywhere. Among the restaurants we chose are: Goh Huat Seng Restaurant from George Town and from Klang Valley we chose Tupai-tupai Restaurant.

We would study how they obtain the desired level of market share and profits. This also includes the effectiveness of different strategies, number of competitors, nature of product or services sold and the size of the market. Lastly, we will compare and state which business is more effective and successful both commercially and competitively.

(117 words)

>> YouTube link: https://www.youtube.com/watch?v=MWqQ58e2X5k

(Goh Huat Seng Restaurant vs Tupai Tupai Restaurant)

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2. HISTORY OF STEAMBOAT RESTAURANTS

Hot pot is also known as steamboat in most countries near us such as Singapore, Malaysia, Thailand and even in the Philippines, as it is famous among the East Asians. Typical hot pot dishes include thinly sliced raw meat, vegetables, mushrooms,

dumplings and seafood. These raw food are to be place into the pot while it is still boiling with a soup of your choice, normally placed in the middle of the table. The cooked food is then usually dipped with a dipping sauce depending on the restaurant but peanut sauce is the most famous.

In many years, hot pot meals are often eaten in the winter during supper time by the Chinese and Japanese, and since we have interviewed a Chinese steamboat restaurant, we would talk about the Chinese history. The Chinese hot pot has a history of more than 1000 years and seem to have originated in Mongolia and Jurchen and slowly spread to southern China during the Tang Dynasty. In time, it developed with different types of other ingredients such as seafood. By the Qing Dynasty (AD 1644 to 1912), the hot pot became instantly famous throughout China. Today, in many modern homes, even in the big cities and the rural areas, this traditional coal-heated steamboat or hot pot still continues and has been replaced by electric, propane gas or induction cooker versions.

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In Malaysia and Brunei, even the Muslims have start evolving their own style for hot pot. They even made halal versions of hot pot but still in a Chinese way. Combination of hot pot and barbecue is also very well known in most places. We all decided that we should interview a traditional restaurant to maintain the custom and history of hot pot.

Since steamboat meals have interesting history and Malaysia has quite a number of restaurants around, we decided to interview steamboat restaurants. According to the food.malaysiamostwanted.com, there are already almost 98 steamboat restaurants in whole Kuala Lumpur. Hence, the two restaurants we mentioned before.

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3. BRIEF BIOGRAPHY

We have chosen to interview steamboat restaurants and among the restaurants we found and managed to interview was: i) Goh Huat Seng Restaurant, Penang ii) Tupai Tupai Restaurant, KL.

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3.1 Goh Huat Seng Restaurant

It is currently located at 59-A, Lebuh Kimberley, George Town, Penang. We managed to interview Mr Ru Fa and since this is a family business from his grandfather, Ru Ying Bao, this restaurant has no branches at all and planned to not have branches

because he wants to maintain and keep this business a small and limited only-family business. Hence, there are only a maximum of 10 employees during the peak hours. Most of the employees are family members and only two are maids from Vietnam that they trust and had been with them for a long time.

Mr Ru and his family live just above their restaurant and this makes things so much easier and convenient for them. The late Mr Ru Yin Bao and Hwang Jia Ti decided to start this business just below their house to have a better focus and

concentrate on this restaurant. Since Penang is quite of a traditional old Town, Ru family has been living in the shop house above the restaurant since the early 1970s and only decided to open a steamboat restaurant in 1977.

As Malaysians, we all know that the extra 6% of government service tax (GST) has a big effect on most businesses and for Mr

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Ru Fa, the supplier charge him 6% of the ingredients such as fish, pork and so on. Although the supplier charges him with GST, Mr. Ru Fa did not charge his customer for the GST therefore the price on the menu still remain the same. Also, the materials such as charcoal and other utility charges are the only little changes.

Penang has about 10 potential steamboat restaurants, like the famous Town Steamboat (火锅之家) and the Yi Bing Qing Fish Head Restaurant but Mr Ru is thankful for what he has and the little things he has helped his family to achieve. He said, ‘I don’t really mind about the competitors, I can’t compare myself with the other restaurants, my restaurant is a traditional and family business while the others are big corporations and such.’ Goh Huat Seng Restaurant’s most famous dish is what makes the customers loyal - Teochew Fish Head soup that is braised in a small golden spot as seen in the picture on the right. This restaurant is not a halal restaurant, as it serves pork balls and marinated pork sliced meat. Mr Ru added that there are surprisingly not many customers in the afternoon but instead, the restaurant will be packed with locals and even foreigners.

There would always be Japanese tourists and Korean tourists to come and dine here every night, that is why there are Japanese writings in the latest menu. Besides that, the peak hours are also during weekends and this is where the 10 employees come in handy. There would even be reservations during weekends from about 5pm to 8pm; roughly about 300 plus customers a night and

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Mr Ru have seen Caucasians, Thai and even Indians from India! He believes it is because of the tripadvisor.com.my that helps promotes his family business as seen below.

Goh Huat Seng Restaurant has a Facebook page but it is not active and Mr Ru Fa is confident that even if the page is not updated, people would still come over and enjoy the delicious food they serve. Mr Ru Fa have always live by the saying his great grandpa’s motive of setting this restaurant - ‘Keep the Teochew tradition and this restaurant alive.’

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3.2 Tupai-tupai Restaurant

It is in a spacious clearing of an old bungalow behind Dewan Bahasa and the Pustaka building, this restaurant is one of the most unique restaurant because of the beautiful design and coziness that can change your mood once you enter the restaurant. It is at 551A & B Jalan Bukit Petaling, Off jalan Istana, Bukit Petaling, Kuala Lumpur; a rather secluded area. Mr. Nizam, the owner and also the son of the founders of the Tupai Tupai Restaurant, agreed to allow us to interview him and to clear our curiosity as well. We interviewed him, since this is a family business that was founded by his father, it is up to him now to manage this extraordinary steamboat restaurant. This restaurant has two branches, the 16 years old and still running KL branch and the new one that is located in Shah Alam and has been running for 6 years now. The restaurant we went to is the first branch that opened 16 years ago.

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Mr Nizam claimed that his parents’ purpose to start this restaurant is because most steamboat restaurants are Chinese cuisine and are not halal and their passion towards food and beverage industry. They decided to take the risk and try something new, they innovated steamboat but in a halal way, no pork. In this way, obviously everyone even the non-Muslims can enjoy halal steamboat too.

This Tupai Tupai restaurant does not only serve steamboat but also ala-carte food like their most famous Black Pepper fried rice, well this is a mixture of Chinese and Malay fried rice; and not to mention their Tom Yam with air kelapa (coconut water) that taste really unique! Moreover, it is a better chance in business investment and it is easier for them to succeed in the food and beverage industry.

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4. Comparative Analysis of the Competitive Traits

I) Number of Competitors: For the Goh Huat Seng steamboat restaurant located in Penang,

it has a total number of two competitors around the restaurant which are Restaurant Town Steamboat and Yi Bing Qing Fish Head Restaurant. For the Tupai-tupai steamboat restaurant

located in Klang Valley, there is only one competitor around the restaurant which is XMQ KL Steamboat Restaurant.

Figure 4.1

Figure 4.2

Figure 4.1 and 4.2 are the location of competitors near Goh Huat Seng.

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Figure 4.3

Location of competitor near Tupai-tupai steamboat restaurant.

II) The Market Share of The Business: Since both of the steamboat businesses, Goh Huat Seng Steamboat restaurant and Tupai-tupai Steamboat restaurant are family business therefore the family members of both business hold the shares of the business.

III) Brief Bios of Business Top Competitors: Town Steamboat Restaurant is located at 63, Lorong Macalister, 10400 Penang, Malaysia. Their business hour for steamboat business opens at 6pm daily. Their Dim Sum business hour opens at 9.00a.m to 3.00pm during weekdays. For weekends and public holidays, their Dim Sum business open from 8.00am to 3.00pm. They serves a variety of foods such as seafood, fish balls, meats, all types of sauces and a variety of veggies. They mainly serve chinese cuisines. Yi Bing Qing Fish Head Steamboat Restaurant is located at 16, Jalan Nyabor, Georgetown, Malaysia. Their steamboat business hour opens daily from 6.00pm to 1.00am. Their signature dishes are curry

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fish head, fish head soup and Tom Yam soup. The average price for one person is from RM11-Rm20. Yi Bing Qing Fish Head Steamboat Restaurant is a restaurant that serves chinese food cuisine. XMQ KL Steamboat Restaurant is located at Jalan Maharajalela, 50150, Kuala Lumpur. Their business hour is from 12.00pm to 12.00am. XMQ KL Steamboat Restaurant is special for their Hunan Spicy Steamboat. They are offering pork free cuisine.

IV) Strategies to Compete With Competitors:

❏ Pricing,

1. Goh Huat Seng Steamboat Restaurant. The pricing strategies that Goh Huat Seng Steamboat Restaurant used is that they have more variations of ingredients in the set menu but still charge customers at a cheap price. Their fish head soup are only RM60 with unlimited refill of soup. Even after GST has been executed, they still maintain the same price.

2. Restoran Tupai-Tupai Restoran Tupai-Tupai is an “all-you-can-eat” buffet steamboat restaurant. The price for adults are RM29 per pax and RM15 for kids with age from 4 to 11. The price also includes some other additional dishes such as fried rice, fried noodles and desserts. Their price rate for weekdays and weekends are the same.

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❏ Food,

1. Goh Huat Seng Steamboat Restaurant The best thing about this restaurant is that the steamboat is powered by charcoal and it can maintain its intense temperature which keep the broth in high degree. According to the reviews from www.tripadvisor.com.my, most of the customer loved their fish head broth and their normal broth. Other dishes that are strongly recommended are their oyster omelette.

2. Restoran Tupai-Tupai Restoran Tupai-Tupai serve 48 varieties of fish balls, seafood, meat, and stuffed beancurd, four types of mushroom, six different vegetables and five kinds of noodles. The “ayam kampung goreng” of the restaurant was quite well-known as well. Not just only steamboat buffet, they also serve a la-carte mixed rice with variety of local Malaysian foods.

❏ Location,

1. Goh Huat Seng Restaurant Most of their competitors also located at Georgetown in Penang. The location of Goh Huat Seng Restaurant is very easy for customer to find because it was located in the centre of George Town.

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2. Tupai-Tupai Restaurant Located in the middle of KL city. It is easy for the customer to find the restaurant. The restaurant is located behind the landmark Dewan Bahasa and Pustaka building and that is why most of their customers that came to their restaurant are those who work in the building.

V) Obstacles Faced by New Businesses:

1. Capital: The obstacles that faced by new businesses is capital. Restaurant owners need enough capital to run their business. Owners should plan to have at least enough money to run for one year. They need enough financial resources to cope with unexpected costs and increases.

2. Competition: Besides capital, new businesses will face a lot of competition in the firm. New businesses need to strive in order to survive in the firm. They need to compete for customers with the other businesses. In the meantime, they need to think of the ways to maximize the profit.

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VI) Nature of The Market:

Both Tupai-tupai Steamboat Restaurant and Goh Huat Seng Steamboat Restaurant are monopolistic competitive firm. This is because there are many sellers in the market. Besides, the barriers to entry are relatively weak. This means that news firms can enter and exit the market easily. Moreover, the businesses have weak pricing power. Since there are many firms in the monopolistic competitive market, the firms cannot charge a high price. Furthermore, the firms sell differentiated products to increase pricing power and protect their profits from competitors.

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VII) Comparative Analysis Summary Table:

Competitive Traits Business A (Penang Based)

Business B (Klang Valley Based)

1. Number of Competitors

10-50 10-50

2. Barrier to Entry Weak, business requires less capital, has weak advertising.

Strong, business requires high capital, has their own regular customers, location is close to crowded area.

3. Differentiated or Standardized Products

Standardized Product Differentiated Products, Black Pepper Fried Rice and Udang Air Kelapa

4. Pricing Power Price Taker, broth can be made at home and ingredients could easily found in hypermarkets.

Price Maker, some of the dishes are not commonly found in other restaurants.

5. Obstacles - Fresh ingredients are hard to be found

- Takes a lot of time to make preparation

- Limited parking lots

6. Verdict Monopolistic Competition

Monopolistic Competition

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VIII) Conclusion Of The Report: Restoran Tupai-Tupai is more commercially successful. Even though Restaurant Goh Huat Seng has been established for a longer duration than Restoran Tupai-Tupai but people nowadays prefer restaurants that provide different kinds of dishes for them to choose. Restoran Tupai-Tupai is also located at a more strategic location which also provide parking lots for their customers as most of their customers are there for lunch break and could save their time looking for parking spaces. Moreover, Restoran Tupai-Tupai have more staffs that could prevent the situation of unable to take care of the customers’ orders and requests. Restoran Tupai-Tupai also have a more arranged system where all their staffs have their own specialised job.

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5. Recommendations 5.1. Goh Huat Seng Restaurant Limited Access of Parking The lack of parking spaces might also be one of the main reasons why customers are driven away from the restaurant. There isn’t much space for parking due to the location of the restaurant that is located by the roadside. It is recommended for the manager to provide parking spaces mainly for Goh Huat Seng Restaurant’ customers. Better Appearance on The Menu & Place On every restaurant, people would always get excited in looking through menus, especially when the menu are unique and fancy, making customers to have an enthusiast mood to eat. But in Goh Huat Seng Restaurant, the menu was made from a normal coloured A4 paper, un-laminated and only being stapled together. They should improve the menu on laminating them and maybe provide pictures for easier reference for the customers to choose their meals. The place was well spaced, but it was obviously seen that the place have not been renovated for awhile. The walls were dirty and some of the tiles and ceilings were rusty. Displaying the menus on the wall with a piece of paper was also not a good idea. What they should do is improve some of the main furnishings such as changing the tiles to new ones, repaint the wall and add few designs to attract more customers.

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Provide Halal Ingredients Steamboat restaurant can rarely be found around the area, making Goh Huat Seng Restaurant consist of least competitors. Although Muslims are not many to be found around the area too, but there are maybe some that loves steamboat but wouldn’t be able to eat because this restaurant is a non-halal restaurant. They could separate the menu providing halal ingredients and soup mainly for Muslims. 5.2. Tupai-tupai Restaurant Promoting More From Social Networks Mr.Nizam, the owner of the business and also a Facebook account of Tupai-tupai Restaurant, happened to have promoted their business through online earlier when he first started the business, but he is now rarely or never have been active in updating the account. This will lead in decreasing their customers and other Steamboat lovers wouldn’t have known the existence of their restaurant, or even tourists. What they should do is to keep updating their new menus or provide promotions on special events to attract more customers. The last update on the website was 19th July 2014 when one website called “Hungrygowhere.my” represents Tupai-tupai restaurant as Top 5 Malay dishes in Kuala Lumpur. Closed on Public Holidays As mention by Mr. Nizam during our interview, he stated that the restaurant will be closed every public holidays, which I think is necessary for the workers, but not for customers. Logic says, during public holidays can have more customers than working days, this can be unfair to those who have worked the same time as Tupai-tupai restaurant’ opening hours and wouldn’t be able to

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have the chance to eat there. They should have not closed every public holidays but instead, provide one off day for the workers at least once a week, preferably during any weekdays, where less people would go there. Price Should Be Reduced Mr. Nizam have said that they have never been changing the price since 3 years ago, even after GST. But when we saw the menu, we can say that they are all a little bit pricy. As for example, the coconut drink cost about RM 6, whereas in most restaurants, the usual price would be RM 2 or RM 1. This might lead to a conclusion of why his customers that regularly eats at his restaurants were high-income workers. By reducing the price at least to RM 3 to RM 2 they might have increased the numbers of their regular customers where people wouldn’t have to worry about the price, most recommended is to make the price almost as equal as their competitors. Improve Parking Lot The parking lot was well spaced, except that they are not well maintained as the screed has already cracked and feels bumpy. They could improve the parking lot by paving it, so that customers won’t have to worry about getting their tyres flat.

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6. Appendices ● Appendix 1: Survey Questionnaire & Results

Date: 2nd May 2015, Saturday Time: 4pm - 6pm Location: Goh Huat Seng Restaurant, Penang

Mr. Ru Fa, grandson of the founder of this restaurant. Position: Cook & manager Office contact number: 012 4831225

1. How and when did the business begin? It is a family business started by my grandparents which is Ru Yin Bao my grandfather and Hwang Jia Ti my grandmother in 1977.

2. What is your business hour?

We used to open at 11am to 3pm and 5pm to 9:30pm but since not much people drop by to eat at the afternoon, we changed it to 5pm to 9:30pm.

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3. What is your peak hours? Saturdays & Sundays, even foreigners would come and eat. 4. Who are your customers?

Middle aged group are the most. About 60% are local and the remaining are foreigners, from Japan and also Thailand.

5. What is the business’ annual revenue figure? I prefer not to say, sorry.

6. Do you feel it is easy or difficult to enter this market? All business would face difficulties but for this restaurant, since my grandfather started this back in the 1977, the struggling phase is over now.

7. How many branches do you have?

We do not have any branch at the moment but we do plan to open one in the future.

8. What are the problems this restaurant face?

Workers especially, most of them are lazy and we need to always keep our eyes on them. That’s why we do not hire many foreigners.

9. Did GST affect this restaurant?

Yes, GST did somehow affect us, our customers reduced a little.

10. What are your strategies to overcome this?

We absorbed the GST, which means we actually earned less that before.

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Date: 6th May 2015, Wednesday Time: 3pm - 4pm Location: Tupai-Tupai Restaurant Mr. Nizam, founder and owner of this restaurant Position: Manager Office contact number: +603 5126 2525

1) When did Tupai Tupai started? 16 years ago, it is a family business.

2) What is your business hour? Seven days a week, we open at 12pm to 2pm for lunch and 8pm to 10:30pm for dinner. We are close on every public holidays.

3) What are your peak hours? Lunch and during dinner most definitely, we even have people calling for reservations.

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4) Who are your customers?

Mostly of our customers are office clerks and basically people who works around here, lunch or maybe after work everyday. We often see most of them having promotion parties here!

5) Was it easy for you to enter this market? Well, I am sure it was difficult in the beginning when my parents started this. I took over Tupai Tupai about 3 years ago and nope, there’s nothing much about having difficulties to enter the steamboat market.

6) How many branches do you have? 1, this is the HQ (Bukit Petaling) and (Shah Alam) is the branch that we opened up after we managed to successfully cope with both places. You should go tp the Shah Alam branch, it has western crusine there!

7) What are the problems you face? Like most restaurants, I am sure employees are the main headache. Most of them are lazy and they slack as much as they can!

8) Who are your competitors? Haha, the ikan bakar nearby and the restaurants nearby. I don’t want to reveal their names here! But again, this is business.

9) Did GST affected this restaurant? It does, but we do not charge the customers. We have not change our prices since 3 years ago and even after GST.

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● Appendix 2: Brochures

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7. References ➢ History of Steamboat/Hotpot:

What is hotpot? (n.d.). Retrieved May 17, 2015, from https://sites.google.com/site/luckyhotpot/about-us-1/about-hotpot

➢ Hungrygowhere.my,. (2014). Tupai Tupai - Malaysia's Best

Kept Secret. Retrieved 18 May 2015, from http://www.hungrygowhere.my/dining-guide/tried-and-tested/tupai-tupai-malaysia-s-best-kept-secret-*aid-a1513101/

➢ Goh Huat Seng, George Town. (n.d.). Retrieved May 18, 2015, from http://www.tripadvisor.com.my/Restaurant_Review-g298303-d1197827-Reviews-Goh_Huat_Seng-George_Town_Penang_Island_Penang.html

➢ Town Steamboat Restaurant, George Town. (n.d.). Retrieved May 21, 2015, from http://www.tripadvisor.com.my/Restaurant_Review-g298303-d4298286-Reviews-Town_Steamboat_Restaurant-George_Town_Penang_Island_Penang.html

➢ Top 7 Challenges Businesses Face Today. (n.d.).

Retrieved May 21, 2015, from http://www.is4profit.com/business-advice/business-strategy/top-7-challenges-businesses-face-today.html

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➢ Yi Bing Qing Fish Head Steamboat (George Town). (n.d.). Retrieved May 21, 2015, from http://my.openrice.com/penang/restaurant/yi-bing-qing-fish-head-steamboat-george-town/336580

➢ Steamboat Restaurants in Kuala Lumpur. (n.d.). Retrieved May 17, 2015, from http://food.malaysiamostwanted.com/cuisines/steamboat