Eco

School of Architecture, Building & Design Principle of Economics [FNBE0135]

FNBE April Intake

Report on “A Comparative Analysis of 2 Business of Similar

Industry in Different Geographical Locations”

Prepared by: Karen Kong Chai Ni (0315480) Lily Then (0313973)

Mak Mun Choon (0314928)

Lecturer: Chang Jau Ho

Table of Content

Summary

This project aims to analyze and compare two businesses on different settings

and let students understand the market competition in real world. The business’s

shop we had chosen was Pink Petals Fashion located at Kuala Lumpur and

Butik L’Avenir located at Penang. This report had consisted of background

information about businesses and comparative analysis of businesses. Face-to-

face interview was used for us to obtain the information and compare the

businesses’ competitive traits. After analysis, we had found that Pink Petals

Fashion is more commercially successful than Butik L’Avenir. We also

recommended some suggestion on improving the competitiveness for each

business.

Content Pages

Summary 1

Background Information of Business

-Pink Petals Fashion

-Bukit L’Avenir

2-5

Comparative Analysis of Businesses’ Competitive

Traits

6-13

Recommendation 14-15

Appendices 16-21

Reference 22

1

Background information of Businesses

Pink Petals Fashion

Outlook Enterprise Sdn Bhd is a very popular retail-clothing company located

at Jalan Hang Tuah in Kuala Lumpur. Outlook Enterprise Sdn Bhd has 5-

6branches of clothing shopes that located in different area. Pink Petals Fashion

is one of the branches of the Outlook Enterprise Sdn Bhd that located in Kuala

Lumpur. It located at G4, Kenanga Wholesale City. The address of Pink Petals

Fashion is No2, Jalan Gelugor, Kuala Lumpur. Mr Bong, the boss of Outlook

Enterprise Sdn Bhd had started this business at 2011 year. Mr Bong started this

business because this business belongs to his family business. Mr Bong had

started different type o business and pass to his daughter and sons take care the

business. One of his sons, Bong Siok Siong had taken care of Pink Petals

Fashion. He had hired a manager, Sam Liew and hired 3 workers, Ramlah

Junaidi, Dicky and Tan Siew Ping to help him take care of the shop. The main

product of the Pink Petals Fashion was clothes. There were two concepts of

clothes sold by Pink Petals Fashion that was Malay Concept and Fashion

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Concept. Pink Petals Fashion sold Malay Concept such as Baju Kurung and the

Fashion Concept such as ladies clothing. Besides that, Pink Petals Fashion also

sold lady accessories such as handbag, belt and scarf. The number of customers

a day was 100 people. Two workers, Dicky and Tan Siew Ping had served the

customer of Fashion Concept, one workers, Ramlah Junaidi had served the

customer of Malay Concept while Sam Liew, manager will served all customer.

Pink Petals Fashion’s monthly revenue figure was around $30000. However,

Pink Petals Fashion did not have any changes but the choices of clothes

increases over the past 1years. The office phone number of Pink Petals Fashion

is +60321449988. If customers have any question or want to make a complaint

can call this number.

3

Butik L’Avenir

First Avenue Mall is a spread over seven levels shopping mall with the fifth to

seventh floor consisting of parking spaces that located in Penang. It has opened

since November 2010, many of the first outlet in the building are women’s

apparel stores. Butik L’Avenir is a small clothing shop that located at 4th floor,

First Avenue Mall. The address of Butik L’Avenir is Jalan Magazine,

Georgetown, 10300 Georgetown, Penang, Malaysia. Nicholas, the boss had

started the business in August 2012 year. This is his first shop as he did not

opened any branch. Nicholas had started this business because he was interested

in doing the clothing business. He felt satisfied when he saw people wear

beautiful clothes. He had hired a worker, Eelyn to help him take care of the

shop. Eelyn also considered as manager as she can make small decisions

without asking him such as held a promotion or when purchase new clothes.

The main product of Butik L’Avenir was Fashion ladies clothing. Butik

L’Avenir carried out an assortment ladies cloting that has a range of size with

latest trends in style. In addition, Butik L’Avenir also sold ladies accessories

4

such as earring, bracelet and necklaces. The number of customers of Bukit

L’Avenir a day is not constant. For weekdays, the number of customers is about

3-7 peoples while the number of customers for weekend is about 10-20 peoples.

The monthly revenue figure of Butik L’Avenir was around $10000 or below

and it is not constant. However, Butik L’Avenir did not have any changes as it

just started the business I years. If customers want to know when the new style

of clothes will arrive can call phone number of Eelyn, 016-3218381.

Video link: http://www.youtube.com/watch?

v=G6ouxiy6qSw&feature=youtu.be

5

Comparative Analysis of Businesses’Competitive Traits

1) Number of competitors of businesses in their respective markets

Pink Petals Fashion has many competitors. The range of number of

competitors around 2-10. However, Pink Petals Fashion has top three

competitors which are A To Z, Melody and Rafflesia as they are located

at the same building. For Pink Petals Fashion, A to Z is the strongest

competitors. It is because the size of the A to Z is bigger than Pink Petals

Fashion and the choices of clothes also more than Pink Petals Fashion. A

to Z also just located beside Pink Petals Fashion only. Besides that, the

top three competitors of Pink Petals Fashion also sell the same concept of

clothes with it which is Malay Concept and Fashion Concept with style

diversification.

6

Butik L’Avenir has many competitors. The range of number of

competitors is arounf 10-20. However, Butik L’Avenir has top 3

competitors which are H&M, Teetoo and Belle as they are located at the

same building. H&M (Hennes & Mauritz AB) is a very well-known

multinational retail-clothing company. H&M is the strongest competitors

for Butik L’Avenir. It is because H&M has a larger size and the choices

of Fashion clothes more than Butik L’Avenir. H&M also can get the

latest style of clothes with normal price faster than Butik L’Avenir. In

addition, Belle also is a strong competitor because it has more choices of

fashion clothes and cheaper than Butik L’Avenir.The three competitors of

Butik L’Avenir sell more branded clothes than Butik L’Avenir.

A to Z The women is the manager of A to Z while the man is manager of Pink Petals Fashion

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2) Strategies compete with competitors and How successful business

The strategy that Pink Petals Fashion used to compete with its

competitors is lower the price. For example, when A to Z held a sale,

Pink Petals Fashion will held a promotion with ‘Buy 1 free 1’ to attract

the customers. In addition to sell clothes, Pink Petals Fashion also sells

ladies accessories such as handbag, belt and scarf. Pink Petals Fashion

also will use the strategies ‘Get free handbag one if customers buy above

$150’ to attract customer buy more. Pink Petals Fashion also has a

purpose that is always provide the best services to the customers.

Strong Competitors of Bukit L’Avenir

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The strategy that used by Butik L’Avenir almost same with the Pink

Petals Fashion that is lower the price. Butik L’Avenir also held a

promotion and sells ladies accessories such as earring, necklace and

bracelet to attract more female customers. Another strategy used to

compete with the competitors is the manager has to always follow the

trend to purchase different styles of clothes quickly.

Lady Accessories

Held promotion and lower the price of clothes to attract customers

The result of Pink Petals Fashion compete with other competitors is quite

successful. There was around 100 people visit the shop and buy the

product a day no matter weekdays or weekend. The selling results of one

month also will not lose compare to other strong competitors. It is

because the price of the clothes of Pink Petals Fashion is cheaper than

other competitors and the quality of the clothes also will not lose

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compare to the clothes of A to Z. The customers also can get the free

products if they reach the goal. Besides that, the workers of Pink Petals

Fashion always provide best service to the customers.

Butik L’Avenir is quite unsuccessful compare to Pink Petals Fashion. The

highest number of customer is around 10-20 peoples for weekends only.

Held promotion with‘2 for $100’ and sell ladies accessories

This is because the H&M has a good reputation on the market. Even

though Butik L’Avenir lowers the price of product and held a promotion

but the quality of the clothes of H&M is better and it is branded clothes.

So, it is difficult to compete with the H&M.

3) Obstacles faced by business strong or weak

The obstacle faced by Pink Petals Fashion is economics is not good. The

price of the product now had increased. People now prefer to save the

money to buy the item that is necessary only. However, for Pink Petals

Fashion, it is easy to overcome the obstacle. It is because Pink Petals

Fashion is the branch of the big and popular retail-clothing company,

Outlook Enterprise Sdn Bhd. It can fully support the needs of the Pink

Petals Fashion and invest capital into the Pink Petals Fashion.

The obstacle faced by Butik L’Avenir is there is too many clothing shop

now and it is difficult to compete with other competitors. The owner also

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must have a big capital before started a business. For Butik L’Avenir, it is

difficult to overcome the obstacles compare to Pink Petals Fashion. It is

because Butik L’Avenir just a small clothing shop. Butik L’Avenir has

not big company that can fully support and invest it.

4) Nature of the businesses

Pink Petals Fashion is an oligopoly market. Oligopoly market is a market

that dominated by a few sellers. The competitors of the Pink Petals

Fashion also are an oligopoly market. This is because the market of

business is dominated by Pink Petals Fashion, A to Z, Rafflesia and other

competitors. Each of them controls their own market and cannot get

involved each other’s market as there is a strong barrier to enter the

market.

Butik L’Avenir is an oligopoly market. One of the competitor, H&M is a

monopoly market but the other competitors are an oligopoly market. A

monopoly is the single dominating seller of a market. H&M consider as

monopoly market because it control 70% of the market. Other clothing

shops are difficult to compete with the H&M. Butik L’Avenir and other

competitors control their own market and do not get involved each

other’s market.

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Comparative Analysis Summary Table

Competitive Traits Business A (Butik

L’Avenir-Penang)

Business B (Pink Petals

Fashion- Kuala Lumpur)

1. Number of Competitors (in ranges e.g. 2 to 10, 10 to 50, 50 to 150, etc.)

10 to 20 2 to 10

2. Barrier to Entry (Weak or Strong? Why?)

Strong.Because too many clothing shops.

Strong.Because economies not good.

3. Differentiated or Standardized Products (if differentiated provide 2 to 3 examples)

Standardized Products

(Fashion clothes)

Standardized Products (Fashion

clothes and Malay clothes)

4. Pricing Power (Price Maker or Taker? Why?)

Price Maker.Because Butik L’Avenir is just a single business shop and the owner can decide the price by himself.

Price Taker. Because Outlook Enterprise Sdn Bhd is the head office of Pink Petals Fashion and it control and decide the price of Pink Petals Fashion.

5. Other Characteristics (e.g. Any close product substitutes, mutual dependence, constant advertising)

Ladies Accessories(Earring, Bracelet,

Necklaces)

Ladies Accessories (Handbag, Belt, Scarf)

6. Verdict (Monopoly? Oligopoly? Perfect Competition?)

Oligopoly Oligopoly

12

Which Business is more commercially successful?

Based on our analysis, Pink Petals Fashion is more commercially

successful than Butik L’Avenir. Monthly revenue of Pink Petals Fashion

is around above RM 30,000 while Butik L’Avenir is around RM 10,000

and sometimes is below RM 10,000 and is not constant.

Why?

This is because Butik L’Avenir is still considers as a new shop compare

to Pink Petals Fashion. They still don’t know how to sustain in the

market.

Besides that, location also is a reason that Pinks Petals Fashion more

commercially successful than Butik L’Avenir. Pink Petals Fashion is

located at Kenanga Wholesale City as many people live around the area

and there is many people will go there to buy the product while Butik

L’Avenir is located at First Avenue Mall as not so much people live

around the area and they will go there to buy the product.

In addition, Pink Petals Fashion is selling Malay Concept, Fashion

Concept and Ladies Accessories has more choices than Butik L’Avenir is

just selling Fashion Concept and Ladies Accessories. In Malaysia, Malay

is considers as a common racial and largest consumers. So, Pink Petals

Fashion can earn more profit by have a business from different race.

Video Link: http://www.youtube.com/watch?

v=LMt92PU77ZM&feature=youtu.be

13

Recommendation

Pink Petals Fashion

We had suggested that the shop should promote more man style of

clothes because the man also has choice to choose their clothes. If just

selling lady types of clothes, the shop can just doing business with lady.

So, the business of the shop will decrease. Other opinion is to open more

branches to sell their products in other shopping malls and places. It is

because it will let more people know more about their shop and product

that they selling, so the business will expand and the competitiveness also

will improve. Besides, the shop also has to improve their relationship

with supplier and customers. This is the most effective way to improve

the business, because have a good relationship with supplier, they will get

product faster so customers will come buy clothes with them.

Butik L’Avenir

We had suggested that the shop should increase the investment in the

marketing activities. The shop should do more promotion to promote

their product to customers, so that many people know more about their

product. Furthermore, they can produce more style of clothes like selling

man style clothes. If their shop just sell simply one type of clothes, the

customers will feel less selection in this shop, so increasing style of

clothes is necessary. Moreover, make a good relationship with the

14

customers to increase their trusted on their shop and product. If the shop

can get the trust from the customers, customers will help us to promote

our shop. This will increase the visibility of the shop.

Video link: http://www.youtube.com/watch?

v=7exJpaNGsBA&feature=youtu.be

15

Appendices

Pink Petals Fashion

16

Other products of the Pink Petals Fashion

Pink Petals Fashion’s Premises

The man of the right side in the photo is the owner, Mr Bong.

Main Product of Pink Petals Fashion

Fashion Concept Clothes

Malay Concept Clothes

17

A to Z is the strongest competitor of Pink Petals Fashion

The woman is the owner of the A to Z

18

Fashion Concept Clothes and Malay Concept Clothes

Sam Liew, the manager of the Pink Petals Fashion

Main Product of A to Z

Butik L’Avenir

Main Product of Butik L’Avenir

19

Butik L’Avenir’s premisesEelyn, manager of the Butik L’Avenir

Fashion Concept Clothes

Other products of Butik L’Avenir

Earring, Bracelet and Necklaces

20

The most powerful competitors of Butik L’Avenir

Butik L’Avenir held promotion such as 2 for $100

Interview Note

Questions:

1. When was the business founded?

2. Who are the key founders?

3. What are your main products?

4. Can u estimate the number of customers a day?

5. What is the business’ monthly revenue figure?

6. Do you have many competitors? Who are they? Who are your top 3

competitors?

7. What strategies have they used to compete with you?

8. Generally, do you feel it is easy or hard to enter this market? Why?

9. How often do you release a new product?

10. Are you pricing decisions strongly affected by your competitors?

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Reference

Barrow. C. (2007). Starting a business for Dummies. (2nd ed) Chichester, England: John Wiley & Sons. Ltd. [Accessed 19 Jan 2014]

Tyson, Eric, Schell, Jim (2012). Small Business for Dummies. (4th ed) Hoboken, N.J. : John Wiley & Sons. Ltd. [Accessed 19 Jan 2014]

Malaysia (2009). Outlook Enterprise Sdn Bhd. Retrieved from

http://www.malaysia.com/directory/retail-clothing-and

accessories/textiles-and-specialty-stores/wp-kuala

lumpur/Outlook_Enterprise_Sdn._Bhd._156991.html [Accessed 20 Jan

2014]

Innovation Leaders (2008). H&M. Retrieved from

http://innovationleaders.org/hm_company_profile.html [Accessed 21

Jan 2014]

TimeOut Penang (2013). Shopping & style. 1st Avenue mall. Retrieved

from

http://www.timeout.com/penang/shopping-and-style/venue/Malls/title/

1st-Avenue-Mall [Accessed 21 Jan 2014]

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