Business comparison report[latest]

RESEARCH REPORT

CONFECTIONERY WHOLESALE BUSINESS

Butterworth , Penang & Kepong, Selangor .

COVER PAGE

SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN

FOUNDATION IN NATURAL BUILD ENVIRONMENT

ENGLISH 2 (ENGL 0205)

GROUP MEMBERS : LIM CHIN YI [ 0315627 ]

PATRICIA KONG WENG YEE [ 0315837 ]

LAU WEI LING [ 0315389 ]

GOH YEN NEE [ 0315551 ]

SIEW JOHN LOONG [ 0315871 ]

NUR AZALIA ELIANY [ 0315282 ]

REPORT TITLE : COMPARISON OF CONFECTIONERY WHOLESALE BUSINESS

IN PENANG AND KLANG VALLEY

LECTURER: CASSANDRA WIJESURIA

TABLE OF CONTENTS

CONTENTS _______________________________________________________

KEY SUMMARY ___________________________________________________ 1

DESCRIPTION OF THE HISTORY OF THE TRADE __________________________ 2

BRIEF BIO OF THE BUSINESSES ______________________________________ 3

COMPARITIVE ANALYSIS OF THE BUSINESSES' COMPETITIVE TRAITS _________ 7

RECOMMENDATION ______________________________________________ 17

REFERENCE _____________________________________________________ 19

APPENDICES ____________________________________________________ 20

KEY SUMMARY

Page 1

In English class, we were assigned to do a report to compare two similar businesses

in two different geographical areas which are Penang and Klang Valley. After discussion among

the group members, we decided to compare the confectionery wholesale businesses in

Butterworth, Penang and Kepong, Selangor. The wholesale company we had interviewed in

Penang is Heap Leong Enterprise Sdn. Bhd. while the company we had interviewed in Kepong

is Hoy Yung Trading Sdn.Bhd. After the research and analysis of the two businesses, we

concluded that Heap Leong Enterprise Sdn.Bhd would be a more commercially successful

company than Hoy Yung Trading Sdn.Bhd due to their larger business scale and annual rev

DESCRIPTION OF HISTORY OF THE TRADE

Page 2

Wholesale business play an important role in the marketplace. This business sells

goods or merchandise to other retailers and consumers. Wholesaler buys the goods from the

manufacturers and resells them at increased prices to earn profits. This happens because most

of the retailers or consumers are not able to purchase the sufficient amount of goods from the

manufacturers due to their businesses scale and storage capacity. Therefore, the wholesalers

will usually have a large amount of retail clients.

The transportation network created by the railroads towards the middle of the 19th

century was a quite a big impetus to wholesale trade around the world. Chicago became the

center of the wholesale trade due to the large amount of rail lines located over there. The city

was home to many trade products such as timber from Wisconsin, agricultural products, live

stocks, drugs, dry goods and hardware.

However, some external forces began to work against the wholesale industry toward

the end of 19th century. . Populist movements such as the National Grange argued that farmers

were being gouged for the difference between their selling prices and what their goods

fetched on city exchanges, and they fought for regulations on the fees charged by the railroads

and warehouses (‘‘Wholesale Background’’, n.d.).

Nonetheless, wholesale industry will still continue the trade with their clients in the

future. The industry will keep on developing as long as there are still demands from small

retailers, small-scale companies and consumers.

BRIEF BIO OF THE BUSINESSES

Page 3

Heap Leong Enterprise Sdn. Bhd.

The wholesale business that we interviewed in Penang is called Heap Leong Enterprise

Sdn. Bhd. It is located at No.4827-C, Tingkat Mak Mandin 5, Kawasan Perusahaan Mak

Mandin, 13400 Butterworth, Penang. The interviewee, Tan Hooi Leong is the owner of the

wholesale company. Heap Leong Enterprise Sdn. Bhd is the only company Mr. Tan owned. The

company does not have any other branches.


Page 4

The business was founded in February, 1984 as a sole trader company by Mr. Tan

and his wife. It was founded because of the influenced of Mr. Tan’s father since Mr. Tan’s

father were involved in this field too. Therefore, Mr. Tan started to help his father with his

business since he was little. His interest towards the business grew years by years, so he

decided to set up a wholesale business on his own.

Recently, the company has moved from rented a storage house to a larger

warehouse that located nearby. Thus, the company has owned the land and the premise.

Besides, there are more space available in the new building to store the stocks and this has

expanded their business scale. The annual revenue of the business gained is within 15millions

to 18millions, while It was started with a capital of RM150, 000.


Page 5

Hoy Yung Trading Sdn. Bhd.

The other wholesale company that we had interview is Hoy Yung Trading Sdn. Bhd.

which located in Kepong. The current address is No.563, Jalan E3/5, Taman Usaha Ehsan,

Kepong, 52100 Selangor. The interviewee is Mr. Seng Chu Soon who is the owner of the

wholesale company. The business does not have any other branches. Hoy Yung Trading is the

only company of the business.


Page 6

The business was founded in 1989, by Mr. Seng Chu Soon and the other 5 business partners.

However, Mr. Seng is the only one who was in charge of the operation and management of the

business. 10 years later, Mr. Seng bought the full ownership of the business from the other

stockholders. According to Mr. Seng, they founded the business because it was the only better

way to make a good living since they did not receive much education back then. Besides, Mr.

Seng decided to be involved in this field because he had some experience in this since he

worked as a saleman before he founded his current business.

Recently, the business has bought some property to gain profits at faster rate.

According to the owner, if the property was bought at the correct timing, the profit might be

doubled up in short amount of time. The annual revenue of the business is about 6million,

while the capital of the business was RM120, 000.

COMPARITIVE ANALYSIS OF THE BUSINESSES’ COMPETITIVE TRAITS

[ NUMBER OF COMPETITORS ]

Page 7

Every company and business have their own competitors. The competitions are

high for the wholesale market in Penang and Kepong. For Penang wholesale market, there are

at least 42 competitors and to be specific, there are 19 competitors in Butterworth

approximately. While in Selangor, there are about 120 competitors in the market, specifically

in Kepong, there are at least 37 competitors.

The top 3 competitors for Heap Leong Enterprise are Hup Seng Sdn Bhd, Tan Lean

Hong Sdn Bhd and Ooi Beng Huat Sdn Bhd. Besides, the top 3 competitors for Hoy Yung

Trading are King’s Confectionery, NCM Food - Malaysia Biscuit, Cookies & Confectionery

Supplier and Dnd Marketing Sdn Bhd.


[ BRIEF BIO OF THE TOP COMPETITORS]

Page 8

Heap Leong Enterprise

1) Hup Seng Sdn Bhd was established in 1958, the company operates in three segments,

the biscuits manufacturing segment, the beverage manufacturing segment and the

trading division segment. The trading division is in the business of sales and distribution

of biscuits , confectionery and other foodstuff.

2) Tan Lean Hong Sdn Bhd was established in 1973, it located at Lorong Mak Mandin 2,

Butterworth.

3) Ooi Beng Huat Sdn Bhd was established in 1983 and has become one of Malaysia

leading chocolates confectioneries, wafer biscuits, candy and snack manufactures. It

located at Jalan Ong Yi How, Butterworth.



Page 9

KING’S CONFECTIONERY

King’s Confectionery is located in BHD. is located at A25, Jalan Kuang Bulan, Taman Kepong. It

began as a singlet outlet in 1973 and it was certified as HALAL products by Jabatan Kemajuan

Islam Malaysia in 1996. It was incorporated in 1993 and had a product range, which included

delectable buns, breads, loaf, pastries, swissrolls, muffins, cookies, and desserts. It has 80

retail stores and it popularize Portuguese Egg Back in 90’s. It began franchising the business to

entrepreneurs wishing to embark onto the bakery industry (‘‘About Us, n.d.).



Page 10

NCM Food - Malaysia Biscuit, Cookies & Confectionery Supplier

NCM food is located in NO. 9, Jalan 8/32, Taman Jinjang Baru, Off Batu 6, Jalan Kepong,

Kepong 52000, Kuala Lumpur. It was established in 1989. Products can be found in Indonesia,

Vietnam and some parts of Asia. The company has registered the unique trademark which is

"Pally Pally" (with the meaning of friendly friendly) for easier remember and distinguish by

consumers (‘‘Company Introduction’’, n.d.). . It is a manufacturer of buscuits, cookies, chewing

gum, beans, and cakes. It acts as distributor and supplier. The number of employee is around

50-100 people.



Page 11

Dnd Marketing Sdn Bhd

DnD Marketing Sdn Bhd is located in 214, Jalan Bukit Desa 9, Taman Bukit Desa, Kepong, Kuala

Lumpur, 52100 Malaysia. It is a wholesale supplier of tropical fruits, dessert, pastry, and durian

fruit. It was established in 2000. It was self-developed under government control and archieve

its satisfactory (‘‘NCM food- Malaysian Food and Beverage Store, n.d.). . It acts as a trading

company, distributor or wholeseller. The employee number is around 5-10 people.


[ STRATEGIES TO COMPETE ]

Page 12

HEAP LEONG ENTERPRISE

i) To compete with the competitors, Heap Leong Enterprise would provide good and

efficient service to their retailers and suppliers as well. By doing so, it will leave a

good impression on them so they will continue to deal with Heap Leong Enterprise.

ii) Heap Leong Enterprise would also establish and maintain good connection with

people. By having a lot of connection and good relationship with the others, Heap

Leong Enterprise could gain a lot of advantages when competing with the

competitors. The clients would prefer to deal with Heap Leong Enterprise due to

their relationship.

HOY YUNG TRADING

i) The price range is low and reasonable compared to other wholesale companies in

Kepong area. They keep their prices low to attract more customers since the

competition is high around the area.

ii) This company would provide good services to the customers. They would always

ensure the products are in good condition when delivered to the clients. Besides,

they also provide fast and accurate delivery service.

iii) Hoy Yung Trading always maintains long term relationship with their clients so that

they can deal the business without any difficulties.


[ DIFFICULTY AND OBSTACLE WHEN ENTERING THE MARKET ]

Page 13

HEAP LEONG ENTERPRISE

According to Mr. Tan, it was not easy to enter the wholesale market for Heap Leong

Sdn. Bhd years ago. One of the main reason is that large capital was needed to start the

business. When Mr. Tan started the business, RM150, 000 was required for the business to

operate. Apart from that, it was hard at first because it required good connection with people

be it the retailers or the suppliers for the company to operate smoothly. Various competitors

have already existed before the establishment of Heap Leong Enterprise. Therefore, the

company did not have many clients during the first few years.

HOY YUNG TRADING

It was not that hard when Mr. Seng, the owner of the Hoy Yung Trading started his

career as he had experience in sales and marketing. Not only that, he had enough capital to

start up his business since there were six shareholders including Mr. Seng to provide the

money. Mr. Seng was the one who mainly in charge of the business operation. However, there

were not many customers at first since the company was just newly established. Besides, there

were customers with bad ethical that were in default of payments. Mr. Seng also encountered

problem with premise rental as the landlord wanted to increase the rent. Therefore, the

business was moved to the current location since Mr.Seng refused to rent the place with

increased price.


[ DIFFICULTY AND OBSTACLE WHEN ENTERING THE MARKET ]

Page 14

The confectionary wholesaler market for the wholesaler in the region of Penang and

Kepong has an oligopoly type of market structure. A market with an oligopoly structure has a

few numbers of firms where the ease of entry to the market is not that easy. They can sell

products that are differentiated or homogeneous. Although with the limited price setting

power, an oligopoly wholesaler tends to have positive long run profits. Below are the proofs of

such characteristics in Penang and Kepong.

In Penang, there are 32 wholesalers firm where only a few of them are the large ones.

On the other hand, there are at least 37 wholesalers firm that located in Kepong area which

some of them are large firms too.

The market sells different types of products in order to compete with its competitor.

Firms like Heop Leong Sdn. Bhd. will find suppliers for products they had in mind to sell. Since

it can be either a differentiated or a homogeneous product, the firm can either sell the

product at a price as they have some control over it or the firm would just sell the products at

its fixed price. For example, Hoy Yung Trading Sdb. Bhd. that sells toys and foods can be either

increase the price to be higher or lower so that they can would not loss any income and

increase profit in the business.

As oligopolies are price setters, the firms have the tendency to affect the price strategy

of the product market. These firms can perpetuate a long term profits as the entry exit

barriers are said to be high in oligopoly.


[ COMPARITIVE ANALYSIS SUMMARY TABLE]

Page 15

COMPARATIVE ANALYSIS SUMMARY TABLE

COMPETITIVE

TRAITS

HEAP LEONG

ENTERPRISE

HOY YUNG

TRADING

Numbers of Competitors

About 42 competitors

About 120 competitors

Barrier to Entry

High, requires a lot of capital, requires a lot of people connection, various competitors already existed

Medium , has experiences, has enough capital

Strategies to Compete

Efficiency, good service, good relationship with people

Low pricing, good service, long-term relationship with clients

Annual Revenue

16-18million approximately

6million approximately

Workers

11 workers

4 workers

Verdict

Oligopoly

Oligopoly

CONCLUSION

Page 16

Based on the analysis, Heap Leong Enterprise Sdn. Bhd in Penang would be the more

commercially successful business than Hoy Yung Trading Sdn. Bhd. This is because the

competition in Penang is lower than Selangor. The huge competition in Selangor has caused

Hoy Yung Trading to lose plenty of customers since the customers have many choices in

choosing the wholesale company.

Besides, Heap Leong Enterprise Sdn. Bhd has larger business scale. Heap Leong

Enterprise covers larger business area than Hoy Yung Trading. Heap Leong Enterprise deals

business with clients in East and West Malaysia while Hoy Yung only deals with clients located

in East Malaysia. Apart from that, Heap Leong Enterprise has a larger annual revenue figure

which is around 17million while Hoy Yung Trading earns lesser, around 6million a year.

Therefore, Heap Leong Enterprise Sdn.Bhd is considered as the more commercially successful

business.

RECOMMENDATION

Page 17

Heap Leong Enterprise Sdn. Bhd.

The customer range of Heap Leong Enterprise is small. The confectionery products

are mainly distributed to confectionery shops. The other customer types like retail store,

grocery store and supermarket are not included as the main customers of the company.

Therefore, the company’s business scale is quite limited. We recommend that Heap Leong

Enterprise to expand their customers range to other business categories that are mentioned

above instead of just dealing with the current customers.


The number of employees of Hoy Yung Trading is quite insufficient. For now, there

are only a total of four people including the owner himself working in the company. Thus, the

workload of each person is high since he have to be in charge of several tasks while working.

Our recommendation is that the company to employ more workers to hold different job

positions. By doing so, employees are able to focus on their job and show better job

performances.

RECOMMENDATION

Page 18

Apart from that, Hoy Yung Trading trade areas are limited. The company only trades

with clients in East Malaysia instead of including peninsula Malaysia into their business areas.

The incomes are limited since they do not trade with clients located outside of East Malaysia.

We recommend that Hoy Yung Trading to expand their trade areas to Peninsula Malaysia or

neighbour countries such as Thailand, Brunei and Singapore.

References

About Us. King’s Confectionery. (2013). Retrieved 1 June 2014 from

http://kings.com.my/about.html

Company Introduction. DND Marketing Sdn Berhad. Retrieved 1 June 2014 from

http://leongks52.fm.alibaba.com/

NCM food- Malaysian Food and Beverage Store. Hotfrog. Retrieved 1 June 2014 from

http://www.hotfrog.com.my/Companies/NCM-Food-Malaysia-Food-and-Beverage-

Store_205427

Personal interview in person

Structure: Seng, C. S. (2014, May 21). Personal interview.

Personal interview in person

Structure: Tan, H. L. (2014, May 16). Personal interview.

Wholesale. Vault Career Intelligence. Retrieved 24 May 2014 from

http://www.vault.com/industries-professions/industries/wholesale.aspx

http://kings.com.my/about.html

http://leongks52.fm.alibaba.com/

http://www.hotfrog.com.my/Companies/NCM-Food-Malaysia-Food-and-Beverage-Store_205427

http://www.hotfrog.com.my/Companies/NCM-Food-Malaysia-Food-and-Beverage-Store_205427

http://www.vault.com/industries-professions/industries/wholesale.aspx

Appendices

[ INTERVIEW NOTES ]

Interviewee Information

Company Information

Heap Leong Enterprise Sdn. Bhd

4827-C, Tingkat Mak Mandin 5,

Kawasan Perusahaan Mak Mandin,

13400 Butterworth, Penang.

Tel 04- 3315352

Email [email protected]

INTERVIEWEE 1

NAME : TAN HOOILEONG

POSITION : OWNER OF

COMPANY

INTERVIEWEE 2

NAME : ALAN LOW

POSITION: LONG FRIEND OF MR. TAN

TEL : 012-5705080

EMAIL : [email protected]

-

Interviewee Information

Company Information


No.563, Jalan E3/5,

Taman Usaha Ehsan,

52100 Kepong, Selangor.

Tel 03-62763650

Email [email protected]

INTERVIEWEE 1

NAME : SENG CHU SOON

POSITION : OWNER OF

COMPANY

APPENDICES [ PHOTOS ]

Page 31

Heap Leong Enterprise Company premise

Storage Area


Page 32

Hoy Yung Trading

Business premise

Storage area


Page 33

A variety of products supplied by Hoi Yung Trading company.

Group photo with Mr. Seng

APPENDICES [ MINUTE ]

Page 34

MINUTES OF THE MEETING 1 DATE: 4 May 2014 TIME: 12pm – 2pm VENUE: Facebook group

NAMES OF GROUP MEMBERS TUTORIAL GROUP ROLE Lim Chin Yi Monday 11am-1pm Leader Lau Wei Ling Monday 11am-1pm Member Patricia Kong Monday 11am-1pm Member Goh Yen Nee Monday 11am-1pm Member Siew John Loong Monday 11am-1pm Member Azalia Eliany Bt Alias Monday 11am-1pm Member

NO. ACTIVITY ACTION TAKEN BY

1. Discussion about business industry to be chosen. -Made a list of different kinds of business can be found in Penang and Klang Valley. -Chosen kopitiam as our business.

Decision made by voting by everyone.

2. Find and contact possible kopitiam to be interview. -Search through online about information of kopitiam in Penang and Klang Valley. - Chong Kok kopitiam and Pakliko Kopitiam as first choice.

Goh Yen Nee

3. Interview Question Written -The interview question is written by Patricia initially. -Suitable questions to be asked is suggested by everyone.

Patricia


Page 35

MINUTES OF THE MEETING 2 DATE: 9 May 2014 TIME: 9pm – 10 pm VENUE: Facebook group

NAMES OF GROUP MEMBERS TUTORIAL GROUP ROLE Lim Chin Yi Monday 11am-1pm Leader Lau Wei Ling Monday 11am-1pm Member Patricia Kong Monday 11am-1pm Member Siew John Loong Monday 11am-1pm Member


1. Discussion about interview of kopitiam. -John decided to go to survey the kopitiam in Klang Valley on the next day.

Siew John Loong

2. Discussion about changing the business industry if the Kopitiam rejects. -Wei Ling suggested finding hotels that have more than 10 years history to interview. -Cindy also suggested finding confectionery industry.

Everyone looks for shops and company related.


Page 36

MINUTES OF THE MEETING 3 DATE: 10 May 2014 TIME: 8pm – 10pm VENUE: Facebook group

NAMES OF GROUP MEMBERS TUTORIAL GROUP ROLE Lim Chin Yi Monday 11am-1pm Leader Lau Wei Ling Monday 11am-1pm Note Taker Patricia Kong Monday 11am-1pm Member Goh Yen Nee Monday 11am-1pm Member Siew John Loong Monday 11am-1pm Member Azalia Eliany Bt Alias Monday 11am-1pm Member


1. Decided to contact the hotel after the next day -Azalia wrote a formal email to the hotels. -We decided if the hotel did not give a reply, we will contact them by phone.

Azalia

2. Decided to contact the confectionery supplier the next day -Cindy contacts the supplier by phone.

Lim Chin Yi

3. Decided to record the interview -Patricia will record the interview in Penang while John will record for the one in Klang Valley

Patricia, Goh Yen Nee and John Siew

4. Edited the interview questionnaire -Added the personal details form into the interview and print it out.

Wei Ling

5. Decided who to go to the interview and arrange the interview.

Everyone

6. Decide task for everyone to do during the interview. -Interview -Record -Taking note

Everyone


Page 37

MINUTES OF THE MEETING 4 DATE: 25 May 2014 TIME: 2pm – 3pm VENUE: Library Discussion Room

NAMES OF GROUP MEMBERS TUTORIAL GROUP ROLE Lim Chin Yi Monday 11am-1pm Leader Lau Wei Ling Monday 11am-1pm Note Taker Patricia Kong Monday 11am-1pm Member Goh Yen Nee Monday 11am-1pm Member Siew John Loong Monday 11am-1pm Member Azalia Eliany Bt Alias Monday 11am-1pm Member


1. Divide the report task to each member. Lim Chin Yi 2. Post the video and picture to Facebook group. Patricia and John 3. Decide to translate the interview video. Wei Ling 4. Decide to compile the report Lim Chin Yi

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