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Name of Module: Principles of Economics (FNBE0315) Report Title: A Tale of Two Businesses – A Comparative Analysis of 2 Businesses of Similar Industry in Different Geographical Locations Group Members: Haziq Zariful(0314131) : Syafiq Zariful(0314702) 1 | Page
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Page 1: Economics assignment 2014

Name of Module: Principles of Economics (FNBE0315)

Report Title: A Tale of Two Businesses – A Comparative Analysis of 2

Businesses of Similar Industry in Different Geographical Locations

Group Members: Haziq Zariful(0314131)

: Syafiq Zariful(0314702)

: Cassandra Wong (0313365)

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Table of Content

Content Page

Cover page 1

Table of Content 2

Key Summary 3

Brief Bio of Businesses 4-5

Comparative Analysis of the Businesses’ Competitive Traits 6-11

Recommendation 12

Appendices 13-46

References 47-48

Key Summary

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We were given an assignment to compare the analysis of two

businesses of similar industry in different geographical locations. We

chose to compare businesses in Penang and in Klang Valley on seafood

restaurants. The seafood restaurant we chose in Penang is Bali Hai

Seafood Restaurant which is located in Gurney Drive and in Klang

Valley we chose Bubba Gump Shrimp Co, which is located in Sunway

Pyramid. After completing and analysis the report, we found out that

Bali Hai would be the more commercially successful business

compared to Bubba Gump. Besides that, the similarity of the two

businesses is that both are having monopolistic competition.

Brief Bio of the Businesses

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Bali Hai Seafood Restaurant

i. The seafood restaurant interviewed in Penang is the ‘Bali Hai

Seafood Restaurant’ strategically located in the famous tourist

spot for local food in all markets, the Gurney Drive. The

interviewee is the Group Food & Beverage Manager of the

business, Steve Foong. 

ii. The first outlet opened for the business is at Gurney Drive, the

second outlet is at Penang Times Square, the third outlet is at

Sungai Pinang and it the biggest outlet so far, the fourth one, is

located at Batu Feringghi.

iii. The business currently has four outlets in Penang and is going to

open the fifth outlet at Damansara. 

iv. The product mainly sells fresh seafood in various kinds such as

lobsters, crabs, shrimps, geoducks, cooked in many types of

ways such as steamed, fried, boiled, etc. Popular dishes include:

steamed grouper, curry crabs with rice noodles.

v. The business‘s first outlet opened at Gurney Drive in 6th

December 2005.

vi. The business was founded by Mr. Josh Chua; and 

vii. It was founded because of his love towards food & desire to try

on newer types of cooking; he got the inspiration to start this

business during his younger years. He worked with his father

when he was at a hawker stall selling grill fish at Sungai Pinang,

and then eventually passed the grill fish business to his niece to

open Bali Hai Seafood Restaurant. What inspired him to call his

shop ‘Bali Hai Seafood Restaurant’ was because Mr. Josh loves

Bali, and would love to bring a ‘Bali feel’ to their restaurant

where he uses the sunset view, seaside location, tablecloth and

the dry leaf roof imported all the way from Thailand with the

decorations to make customers feel as if they are in Bali.

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viii. In recent times, the business has used their revenue to add

decorations to add a relaxing family atmosphere & also a Bali

feel such as the dry leaf roofing. The revenue is also used to

bring in more sea animals & products to compete with other

competitors. The revenue the business gains through their

development is currently RM1million per month, where they start

the business with a capital of RM600K.

Bubba Gump

i. The seafood restaurant interviewed in Klang Valley is the ‘Bubba

Gump Shrimp Co.’ strategically located in one of the shopping

mall in KL, Sunway Pyramid. The interviewee is the assistant

Sous Chef, Mr. Pravin.

ii. The first outlet opened in KL is at The Curve Mutiara, Damansara.

The second outlet in Kuala Lumpur is at Sunway Pyramid and the

third outlet is at. Citta Mall, Damansara

iii. The business currently has thirty-two Bubba Gump restaurants

operated worldwide. Twenty-two of these locations are in the

United States, three are in Japan, two are located in Mexico,

three are in Malaysia, and one each in the Philippines, Indonesia

and Hong Kong.

iv. The product mainly sells fresh seafood in various kinds such as

shrimp, salmon, fish, lobsters cooked in many types of ways such

as steamed, fried, boiled and more. Popular dishes includes their

award winning Dixie style baby back ribs, traditional shrimp

cocktails, stuffed shrimps with crab meats, shrimp kebab and

more.

v. The businesses opened their first outlet in Malaysia at The Curve

Mutiara, Damansara in 2008.

vi. The business was founded by Viacom Consumer Products

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vii. Was founded because was inspired by the 1994 film Forrest

Gump. The Bubba Gump restaurant is named after the film's

characters Benjamin Buford "Bubba" Blue and Forrest Gump.

viii. Their recent development is that they are going to open their

100th outlet in Malaysia soon.

Video link(Brief Bio of Two Business) - http://youtu.be/qgk_ewJ3su8

Comparative Analysis of Competitive Traits

1) In Penang, in the Seafood Restaurant market, there are at least 49

competitors, specifically in Georgetown; there are approximately 19

competitors in the market.

There is an astoundingly large number of seafood restaurants in

Klang Valley, counting to more than 180 firms. Specifically in

Petaling Jaya, there are at least 50 firms.

2) In Penang, Bali Hai’s market share is small & its top competitors in

the market would be Tan Sam Guan Seafood Restaurant, Pinang

Taste Seafood, and Ocean Green Restaurant.

In Klang Valley, Bubba Gumps’ market share is the same as the

other outlets in Sunway Pyramid & its top competitors would be

Manhattan Fish Market, Pantai Seafood Restaurant & Restaurant

Fatty Crab.

3) Bali Hai:

a) Tan Sam Guan is a seafood restaurant located in Batu Ferringhi

founded by locals Liang & Loon. The restaurant is famous for

their friendly service, atmosphere & their Malaysian Cuisine.

They also serve food other than seafood such as sizzling chicken

& fried chicken with honey.

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b) Pinang Taste Seafood is located at World Heritage Area

Carnarvon Street, Georgetown. Their motto "Local Taste with

Home Sauce Recipe" signifies that they cook their food such as

Nyonya Asam Fish in a local Malaysian way & that all their sauce

are made from traditional home recipe. They are also famous

locally for cheap dishes at an average of RM3.

c) The Ocean Green Seafood is a popular dining place located off

Jalan Sultan Ahmad Shah in the city center. The restaurant also

gives an open view of a popular beach area for couples. The

eatery offers famous seafood freshly caught which are cooked in

various ways such as the Steam Curry Fish, Sweet and Sour Crab

& Scallop Soup.

Bubba Gump:

a) The Manhattan Fish Market would be the largest competitor; one

of the major reasons is that it is also strategically placed in

Sunway Pyramid Megamall like Bubba Gump. Another cause is

how a globally successful company owns the restaurant; hence,

they would have a larger capital, larger suppliers & different

types of recipes such as Fiery Cherry Snapper & Manhattan

Flaming Prawns. Pricewise, customers would ideally dine in this

restaurant than Bubba Gump.

b) Pantai Seafood is situated around wooden houses & light

industrials; however, the interior has a spacious relaxing family

atmosphere. There are cascading tanks with a wide array of

seafood to choose from for a freshly cooked meal. Signature

Dishes include Pak Cheok Har (Poached Fresh Prawns) & Siong

Tong LaLa (Steamed Clams in Superior Soup).

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c) Restoran Fatty Crab had been well established and known to

many people. A Hot spot for Malaysians including Malays as it

had been certified as a Halal restaurant. The business can

obviously be identified as a local business since it resembles a

typical local restaurant, with fans, outdoor tables, local cuisine &

stalls where they cook satay and Chicken wings. Other Dishes

include Sweet and Sour Sauce Crabs & Steamed Fish.

4) Bali Hai:

- The management team would go around the area & eat food

from other restaurants not just in their market to spark ideas on

ways to cook their food.

- The manager also encourages employees to spend time with

their customers & receive negative/positive comments for the

management to reflect on.

- The manager would also discuss with chefs & suppliers every 2

weeks to create a new seafood dish. After discussing, the

business would then promote their new product to their

customers.

- Other strategies include the marketing department running

programs to promote the restaurant such as partnering with

Tourism Malaysia, which sponsors the business through

brochures.

Bubba Gump:

- The restaurant has dancers perform Spanish dancing with the

music in the restaurant as a way to make the restaurant more

unique.

- As a restaurant self-labeled as a family restaurant, the

management allows kids under the age of 12 to eat their

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products for free. This would attract more families, as they would

not want to spend a lot.

- New products are introduced annually in November/December.

- In the marketing department, Bubba Gump promotes themselves

by selling merchandise near their shop, also promoting retro

brands such as Guinness & Tiger.

5) To enter the seafood restaurant market according to both managers

is currently easy as long as there is enough money to start the

business, only a small capital would be needed, eg. Bali Hai only

needed RM600k from their capital. One of the few obstacles faced in

the market pointed out by Bali Hai manager, Steve Foong, is that

businesses need to partner with a supplier & to compete with

others; a supplier who can supply a large variety of seafood would

be needed, however, local fishermen can also provide their services

to local businesses, which would be cheaper. The chefs must also

have the knowledge to cook seafood & furthermore, to compete

against competitors, they need to be innovative on cooking new

products to attract customers.

6) The seafood restaurant market for both Bali Hai and Bubba Gump

has Monopolistic Competition. In a market with Monopolistic

Competition, there are many firms, relatively easy to enter,

somewhat different products, some price difference &

advertisement is important to compete against competitors.

i) In Penang, there are approximately at least 49 firms while

there are at least 50 firms in Petaling Jaya, this proves there

are many firms in the geographical market & that it is easy to

enter.

ii) The market also sells different types of dishes, in order to

compete against competitors, firms like Bali Hai think of a

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new product to sell in a mere 2 weeks whereas the products

of seafood restaurant also varies by their supplier, Bali Hai

has approximately more than 25 different types of seafood in

different types of ways to cook them.

iii) There are also different price differences, local businesses

might hire local fishermen or fish for their supply, which,

compared to large businesses who hires suppliers providing

various types of seafood, would be much cheaper, hence,

their price would also be cheaper.

iv) Lastly, large businesses such as Bubba Gump & Bali Hai would

advertise in order to attract more customers & not lose to

their competitors.

Competitive Traits Bali Hai Seafood

Restaurant (Penang-

Based)

Bubba Gump

(Klang Valley-Based)

1. Number of

Competitors

45-60 firms 180-200 firms

2. Barrier to Entry

Strong, has low capital,

needs to gradually

upgrade firm through

revenue

Weak, has high capital,

located at Sunway

Pyramid, where there are

many people, strong

advertisements

3. Differentiated or

Standardized Products.

Differentiated, eg.

Alaskan King Crab in

Salted Egg Yolk, Cheese

and Crab Meat Whole

Standardized, very few

differentiated products

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Scallop

4. Pricing Power Price Maker - sells various

types of seafood that are

not locally found, such as

Australian Spider Crab &

Geoduck.

Price Taker - few

differentiated products,

some can be cooked at

home.

5. Other

Characteristics

No close product

substitutes around the

area, mutual

dependence, inconstant

advertising

Many Close product

substitutes found nearby,

constant advertising in &

around firm

6. Verdict Monopolistic Competition Monopolistic Competition

7) Comparative Analysis Summary Table

8) Based on our analysis, Bali Hai would be the more commercially

successful business. One of the reasons is that there are too many

competitors in Klang Valley than Penang & because of this, their

advertisements are effective. Another reason is that Bubba Gump

doesn’t give too many unique recipes for their products & takes a

whole year on creating a new product while Bali Hai only takes 2

weeks & have different types of seafood not just sticking to prawns,

shrimp & fish like Bubba Gump.

Video link(Comparative Analysis of Competitive

Traits)-http://youtu.be/saGm2xv1Zd0

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Recommendation

BUBBA GUMP

- The products sold in the firm are too common & can even be cooked

at home or at least can be found in other restaurants in a cheaper

price such as tempura shrimp or fish and chips. There are very few

differentiated products exclusively for the restaurant and also, the

dishes focus too much on shrimp & prawn there are only 4 types of

dishes for fish. Our recommendation is for the company to issue new

products monthly or every 2 weeks, instead of the current annual time.

- The price is a major reason why customers are driven away from the

firm, since there are many competitors who sell substitute products for

a cheaper price. For example, Bubba Gump’s Fish & chips are for

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RM25.90, whereas in Manhattan Fish Market, their Fish & chips range

from RM12.50 to RM19. Aside from food, drinks are only too pricey

ranging from RM12 to RM25. Our recommendation is to sell products

almost equal to competitors where demand can be equal.

BALI HAI SEAFOOD RESTAURANT

-The restaurant is located just by the roadside, which makes it

unhygienic due to the carbon monoxide from vehicles which can affect

the customers eating the food. Besides that, the noise from the

motorcycles that pass through can also disturb the customers who are

having family dinners. Our recommendation is that they cover part of

the restaurant up to maintain the cleanliness and the ambience of the

restaurant.

-The limited parking spaces are also one of the major reasons why

customers are driven away from the restaurant. There isn’t much

parking lots based on what we see when we are there. The reason is

because it is by the roadside and there is moving traffic which makes

customers cannot park by the side. Our recommendation is to provide

parking spaces for the ‘Bali Hai Seafood Restaurant’ customers.

Video link(Recommendation)- http://youtu.be/2GWMKCJs62M

Appendices

BALI HAI:

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Interview notes

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Contact Details (Restaurant):

Address - 90, 90A, 90B, 90C & 90D, Persiaran Gurney

Georgetown

10250 Penang, Malaysia

Contact no. - 04-228 8272

Fax - 04-228 8273

Email - [email protected]

Website - http://balihaiseafood.com

Contact Details (Corporate Office):

Address - 23, Lorong Birch,

Georgetown

10250 Penang, Malaysia

Contact no. - 04-227 3667

Fax - 04-228 3667

Contact Details (Current Manager):

Contact no. - 016-520 3024

016-445 1001

Email - [email protected]

Photos

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Business Premises

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Main Entrance With Sign of Name & Logo

Overview of the Main AreaCascade Tanks With Various Types of Sea Animals

Crabs, Lobsters & Clams placed on ice

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Bali Style Huts with dry leaf roofing

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Traditional Decorations under ceiling

The Counter Table

Windows To Witness Behind the Scenes Actions by the chefs

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The Kitchen Utensils Used

The Kitchen

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The Refrigerators & Ovens

Chefs Working In The Kitchen

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Products

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Deep Fried Crab

Curry Crab with Rice Noodles

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Steamed Grouper

Seafood Fried Rice

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Bali Hai Waiter serving Coconut

Crab Meat and Cheese in whole Scallop

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Bali Hai Facebook Page

Bali Hai Official Website Home Page

Official Websites & Pages

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BUBBA GUMP:Interview Notes

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Contact Details (Restaurant):

Address - Oasis Boulevard, Sunway Pyramid Shopping

Mall, No. 3, Jalan PJS 11/15, Bandar Sunway,

56150 Petaling Jaya, Selangor, Malaysia

Contact no. - 03-5638 4559

03-5635 3559

Fax - 03-5637 6559

Email - [email protected]

Website - http://www.bubbagump.com/

Contact Details (Corporate Office) [Naza Corporation Sdn Bhd]:

Address - -115 Jalan Raja Muda AzizKampung Baru,

50300 Kuala Lumpur

-Lot 1, Jalan 51A/ 22146100

Petaling JayaSelangor, Malaysia

Contact no. - 03-26177999/888

03-79532888

Fax - 03-2681 8928

Website - www.naza.com.my

Contact Details (Manager):

Contact no. - 01-4633 4733

Email - [email protected]

Photos

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Business Premises

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Main Entrance

Promotion outside Entrance to attract customers

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Seating (1)

Seating (2)

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Drink Bar

Bartenders with Beer Dispensers

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Seating (3)

Corner where stocks such as Plates & Cups are placed

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Seating (4) (Outdoor)

2-3 people seating

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Family seating

Promotions & Merchandise Outdoors Employee of the Month Wall

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Employees & Mascot

Merchandise Shop

Marketing & Promotions

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Merchandise Shop Counter

Bubba Gump T-shirts

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Bubba Gump Knick-Knacks

‘Kids Eat Free’ & ‘Free Refill’ Promotion Picture

RM50 Coupon

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“Kids Eat Free’ Promotion to Attract Families

Mother’s Day Promotion

Products

Onion RingsShrimper’s Heaven

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‘I’m Stuffed!’ Shrimp

Jambalaya

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Dumb Luck Coconut Shrimp

Shrimper’s Net Catch

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Mud PieBuffalo Wings

Fried Shrimp

Potato Salad

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Menu

Cover Page Back Page

Specials Menu

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Chicken, Meat, Fish & Pasta Menu

Promotion Menu – Front Page Promotion Menu – Back Page

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Websites & Pages

Official Website – Sunway Outlet

Website – ‘About’ Page

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Official Facebook Page

Restaurant Information from Facebook Page

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References

[WEBSITES]

Gomakan.com. (2014). Bubba gump shrimp co. @ sunway pyramid | gomakan. [online] Retrieved from:http://gomakan.com/go/bubba-gump-shrimp-co-at-sunway-pyramid[Accessed: 13 Jan 2014].

Biz.yellowpages.com.my. (2013). Bali hai seafood restaurant. [online] Retrieved from:http://biz.yellowpages.com.my/balihaiseafood/ [Accessed: 13 Jan 2014]. Balihaiseafood.com. (2012). Bali hai seafood market official website. [online] Retrieved from: http://balihaiseafood.com[Accessed: 17 Nov 2013].

Tripadvisor.com.my. (n.d.). Restaurants: find restaurant reviews - tripadvisor. [online] Retrieved from: http://www.tripadvisor.com.my/Restaurants [Accessed: 24 Jan 2014].

goPenang. (2013). Tan sam guan seafood - gopenang. [online] Retrieved from: http://www.gopenang.my/tan-sam-guan-seafood/ [Accessed: 11 Jan 2014].

[WEB BLOG]

Shah, S. ( 2013,11th April 2013). Best local restaurants in penang. BEST LOCAL RESTAURANTS IN PENANG, [web log] Retrieved from: http://www.mygola.com/best-local-restaurants-in-penang/q25083 [Accessed: 9 Jan 2014].

Sumptuos ( 2012,21st January 2012). Pantai seafood restaurant (水上人家) @ kg. sg. kayu ara, petaling jaya. Sumptuous®, [web log] Retrieved from:http://sumptuousblog.wordpress.com/2012/01/21/pantai-seafood-restaurant-水上人家-kg-sg-kayu-ara-petaling-jaya/ [Accessed: 11 Jan 2014].

Lam, C. ( 2010,23rd March 2010). Fresh & delicious seafood at ocean green seafood restaurant, penang. What2See : Best of Penang Food!, [web log] Retrieved from:http://www.what2seeonline.com/2010/03/fresh-delicious-seafood-at-ocean-green-seafood-restaurant-penang/ [Accessed: 11 Jan 2014].

Chin, W. Z. ( 2014,22nd February 2009). Pantai seafood restaurant @ kg sg kayu ara, petaling jaya. KAMPUNGBOYCITYGAL, [web log] Retrieved from:http://kampungboycitygal.com/2009/02/pantai-seafood-restaurant-kg-sg-kayu-ara-petaling-jaya/ [Accessed: 11 Jan 2014].

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Kim, S. ( 2013,14th January 2013). Restaurant fatty crab@ taman megah,pj. Yours Truly Saimnicy, [web log] Retrieved from: http://saimnicy.blogspot.com/2013/01/restaurant-fatty-crab-taman-megahpj.html [Accessed: 11 Jan 2014].

[e-BOOK]

Characteristics of Market Structure. (2013). [e-book] California: California Council On Economic Education. p. 1. Available through: econworks.org http://econworks.org/wp-content/uploads/2013/01/Characteristics-of-Market-Structure.pdf[Accessed: 11 Jan 2014].

[BROCHURE]

In Penang Free Map [Brochure]. (2013). Georgetown, Penang: Tourism Malaysia

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