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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 Location
Group Members: Alfred Ti Cheng Jie (0323537)
Calvin Wong Kim Ming (0323642)
Chiang Lin Chew (0322923)
Zachary Ooi Cheng En (0323120)
Lecturer/Tutor : Miss Tay Shir Men
Submission Date : 19th January 2016
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2. CONTENT
Content Page
Cover Page 1
Table of Content 2
Key Summary 3
Introduction 4­5
The history of Optical Trade 6­7
Brief Bio of the Businesses 8­11
Comparative Analysis of the Businesses
Competitive Trait
­Number of competitors
­Brief Biodata of top 3 competitors
­Strategies of Businesses
­Obstacles faced by new businesses
­Nature in Markets
­Comparative Analysis Summary Table
­Analysis
12
13
14
15
16
17
18
Appendices 19­24
Recommendation 25
References 26
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3.
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 optical shop businesses in Klang Valley and in Kedah.
In Kedah, we interviewed a shop named Eye 2 Eye Optics at ​Ground Floor,
13, Lorong 20, Taman Patani Jaya, 08000 Sungai Petani, Kedah .​ Malaysia
On the other hand, we also interviewed New Image Optical at ​10, Lorong CP
4 3/8, Taman Cheras Perdana, 10 Mile, Jalan Cheras, Cheras, 43200, Cheras,
Selangor, 43200, Malaysia​. After analyzing all the data and information we
gathered, we concluded that New Image Optical is more commercially
successful than Eye 2 Eye. Lastly, both businesses are having Oligopoly
Competition.
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4. Our task for this assignment is to compare and contrast two businesses of the
same industry.One located in Kedah and another one is at
Cheras,Selangor.After some discussion,we decided to interview Eye 2 Eye
shop in Patani Jaya,Sungai Petani,Kedah and New Image Optical in
Cheras,Selangor.We chose these two businesses as some of our members
were their customers.
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5. We also chose two businesses in different states just because we
wanted to show contrast of the same business in varying locations.We wanted
to see how location affects a business.
In this report,we try our best to convey our findings in an organised
manner in order to be understood by all readers.
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6. The history of Optical Trade
Glasses, otherwise called eyeglasses and displays, are utilized for vision
adjustment.
These days, 8 out of 10 individuals on the planet are wearing displays. Some
wear it for
vision redress, some wear it for design reason. The historical backdrop of
glasses started when the first vision help was designed by an obscure
innovator. It was known as a perusing stone which was a glass circle on top
of the material. In those days it was just used to amplify letters. In the
thirteenth century, hand­held amplifying lenses are created from strong glass
and wooden edges. In 1267, an English friar called Reegan Bake made
hand­held displays to be utilized to peruse the Bible, however it wasn't
generally relevant yet. Motivated by him, Salvino D'Armate, from Italy,
imagined the initially wearable glasses in 1284.
On the other hand, the Crystal Processing Trade Consortia in Venice
had made the
regulations that glass couldn't be utilized to make lenses for displays as they
are fake of precious stone. So when glass was initially utilized as a part of
lenses assembling, the
displays were made under the state of "scenes for perusing" and stamped
"made of glass". In 1498, Nuremberg began the exchanging of scenes and
had spread the offers of
scenes all over Germany and the Europe. A great deal of producers had set up
branches
in focal European urban areas, and later in the entire world.
The assortment of exhibitions started when shades were presented in
year 1752 by James Ayscough. Later on, American researcher Benjamin
Franklin, who endured from both nearsightedness and presbyopia, designed
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7. bifocals. A couple of years after the fact, the first lenses for remedying
Astigmatism were planned by British space expert George Airy. In the 1930s,
shades turned out to be broadly accessible and well known sought after. In
1929, Edwin Land presented polarizing sunglass lenses. It had polarizing
celluloid which diminished light
glare in sunglass lenses. As style sense expanded all through the world,
specialists and
optical firms in Europe collaborated in creating commonsense contact lenses
in 1940. In 2008,
Joshua Silver outlined the AdSpecs, which are eyewears with
self­customizable restorative glasses.
In conclusion, glasses nowadays are for vision redress., as well as a
method for style. We won't not see it, but rather displays assume a
noteworthy part in individuals' everyday life. We ought to welcome this
stunning innovation.
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8. Brief Biodata of Business
EYE 2 EYE SHOP
one of our choices of business for this assignment is Eye 2 Eye. It is currently
located in ​Ground Floor, 13, Lorong 20, Taman Patani Jaya, 08000 Sungai
Petani, Kedah . Founded in 2005 , this businesses is brought up single ­
handedly by Mr Kim Zu . Mr Kim Zu wanted to start this business because
he doesn’t want to work for other people, he wanted to get himself in
financial freedom as long as he can be a boss of his own job. He thought that
his business is decently profitable.
Furthermore, this business has no branches as is it only a small­scale
family­run business. Mr.Kimzu also want to keep his overheads low in order
to stabilize his prices. Therefore, he didn’t hire a lot of workers. There are
only 2 workers and himself only. Mr.Kimzu also provide a very good
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9. services to all customers.This aspect is very important to maintain his regular
customers.
Moreover, his business is focus on usual glasses, sunglasses, contact lens
and eyes­protection. He also provides vision test for all of his customer
before they going to buy a spectacle. He also will helps his customers to do a
double check of their vision test. This is to make sure that his customers will
feel satisfy and comfortable after wearing their products. The numbers of his
customers are around 60 per month. He also willing to provide services to
people who not his customers as long as he is doing his own job. Mr.Kimzu
will also hang banners along the roads so that it can attract more people to his
shop.
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10. NEW IMAGE OPTICAL
The another choices of our business is New Image Optical shop that is
located at 10, Lorong CP 4 3/8, Taman Cheras Perdana, 10 Mile, Jalan
Cheras, Cheras, 43200, Cheras, Selangor, Cheras Perdana, 43200 Cheras,
Selangor. This business is own by Ms. Sherene Lim. She is around 42 years
old. This business was founded in year 2000. During the early period, this
business was not hard to enter the market because there is less of competitors.
The purpose of starting this business is merely to start her own business and
earn more incomes as well.
Furthermore, this business has no any branches and it is the only one at
Cheras. This business has 5 employees including herself who as the
optometrist as well in the shop. The main products sold by the business are
spectacles, contact lens and sunglasses.Services such as vision test and
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11. dispense contact lenses are provided in the shop. The business has over
thousand customers , most of the customers are having short­sightedness .
Besides that, the business has brought in a machine automatic lensmeter,
lens cutting machine and Zeiss machine I­terminal progressive dotting
technology recently to offer accuracy and comfort for both the technician and
patient. The machine can help patient to optimize vision, reduce eye strain
and have better fixing lenses by provides all of the data necessary to
objectively create lenses for your unique features. Many details need to be
taken into account during the process when adjusting lenses to frame, such as
the distance between eyes and pupils, the proportions of the face and even
posture. Up to 40% of valuable visual activity can be lost without these
accurate measurements. The business hopes to bring in more Zeiss machines
in the future.
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12. Comparative analysis of 2 Businesses
1)​ NUMBER OF COMPETITORS
­ ​EYE 2 EYE OPTICS​, located at Ground Floor, 13, Lorong 20,
Taman Patani Jaya, 08000 Sungai Petani, Kedah , there are over 10
competitors in the market and about 6 competitors within the area.
­​ ​NEW IMAGE OPTICAL, ​located at ​10, Lorong CP 4 3/8, Taman
Cheras Perdana, 10 Mile, Jalan Cheras, Cheras, 43200, Cheras, Selangor,
43200, Malaysia​, there are about 20 competitors in the market and about 5
competitors within the area.
2)​ ​The market share of the business and its top competitors
­ In Sungai Petani, Eye 2 Eye Optics’s market share is small which
pending to open another branch and its top competitors in the market would
be Eagle Eye Optics which is at Taman Sejati Indah which opposite of
Emerald Puteri Hotel, and Pro Eye Optics as well as Universal Optometry
Sdn. Bhd. both located at Lagenda Height.
­ In Cheras, New Image Optical’s market share is small due to that she
has no any branches with her another partner to manage his business. There
are few competitors when she is running this business and the top competitor
will be Big Eyewear which is a well­known optical shop in Cheras area
which located ​36 Jalan Temenggong 17/9 43200 Cheras, Selangor. Another
top competitor will be E Optics and finally the nearest optical shop from
Chai’s Optical & Contact Lens House which is next door from New Image
Optical.
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13. 3)​Brief Biodata of Businesses Top 3 Competitors
EYE 2 EYE OPTICS
● Eagle Eye Optics ​which located at Taman Sejati Indah, was founded
since year 2009, by Mr. Lim. There are 2 employees in the shop. The
are only one shop and no other branches right now.
● Pro Eye Optics ​the second competitor of this business which located
107, ​Jalan Lagenda Heights 4, Lagenda Heights, Sungai Petani, Kedah,
Malaysia​ ​was founded in 2006 by the founder Michelle Yeoh. There
was about 4 employees in the shop. The business has 1 branches which
located in Alor Setar but the shop in Sungai Petani is the headquarter of
this business.
● Universal Optometry Sdn. Bhd. ​that owned by Keith is opened since
3 years ago in 2013 which have 4 branches. Compared to our business,
this shop has more variety of products and cover a wider area as it is
located at a busy area.
NEW IMAGE OPTICAL
● Big Eyewear Optical Centre ​which located at Jalan Temenggong,
Bandar Mahkota Cheras which founded by Alice Lee and his husband,
Marcus Leong. There was total 5 employees in the shop and it is no any
branches currently.
● E Optics ​which located which also located at Jalan Temenggong,
Bandar Mahkota Cheras but is in Seksyen 9 which founded by Mr. Ooi
since 2010. There was total 3 employees in the shop.
● Chai’s Optical & Contact Lens House ​which nearby ​New Image
Optical ​is a shop with a slightly older look compare to others. There
was about 3 employees in the shop.
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14. 4)​How do the businesses compete with their competitors
EYE 2 EYE​ ​OPTICS ​does not advertise. However, most of their
customers are regular customers as their business had started since year 2006.
The business also appreciate a lot with customers who recommend their shop
to family and friends. Besides, the business emphases on vision care and has
also brought in high technology machines, such as the Zeiss machine for
I­terminal dotting.
Similarly,​NEW IMAGE OPTICAL ​does not advertise at all. It
depends mostly on regular customers.Ms Sherene also emphases the
importance of after­sales service and keeping overheads low. He does not
hire any workers but instead looks after the business himself. This way, he
can keep his prices low and his customers happy.
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15. 5)​ ​What are the obstacles faced by new businesses who wish to enter
their markets today? Are they easy or difficult to overcome? Why?
One of the snags confronted by new business to enter the business sector is
the low amount of interest because of the low thickness of populace in the
region. Another hindrance is because of the vicinity of numerous different
organizations giving the same administrations and items. Henceforth, clients
will analyze the costs of the items. Also, the larger part of clients are normal
clients who tend to visit the same opticians. This circumstance is an issue
confronted by new organizations as the organizations that has existed for a
more drawn out time period has a bigger measure of customary clients. Also,
the administration gave by optical business is a greater amount of less
private. Case in point, the opticians has a record of all clients and how their
vision changes consistently. This implies the optician knows his or her clients
well. In conclusion, it is troublesome for new organizations to accomplish
economies of scale, which is characterized as the point where the income of a
business is the most elevated as an aftereffect of always decreasing expenses.
New organizations try not to have the opportunity to get profits by suppliers,
for example, rebates.
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16. 6)​ ​What is the nature of their markets?
The nature of the market of ​EYE 2 EYE OPTICS ​and ​NEW IMAGE
OPTICAL​ is monopolistic competition, which is a market containing a large
number of small firms. This business has many competitors, but each one
sells slightly different products. Besides, this business also has the
characteristic of monopolistic competition, which each firm makes
independent decisions about the price and output, based on its product, its
market, and its costs of production.
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17.
Competitive Traits New Image Optical
(Cheras)
Eye 2Eye
(Sungai Petani, Kedah)
Number Of
Competitors
10­20 5­10
Pricing Power Weak (Price Taker)
If their price is higher
than market price they
will lose customers
due to numerous
competitors around.
Weak (Price Taker)
The price he set will
not affect the market
price.
Barrier to Entry Strong. Because this
business have startup
long time ago
Strong. Because this
business have startup
long time ago
Differentiated or
Standardized Product
Standardized Standardized
Other Characteristics Contact Lens, Eye
drops, Sunglasses,
Eye Potion.
Contact Lens, Eye
drops, Sunglasses, Eye
Potion.
Verdict Oligopoly
Competition
Oligopoly Competition
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18. 7. ​Analysis
In a nutshell, we concluded that New Image Optical would be more
commercially successful. This is because of its business’ annual revenue is
higher than Eye 2 Eye. Even though they sell the same product, but New
Image Optical has more choices of spec than Eye 2Eye. Due to its strategic
location which located in the main town of Selangor, they are more likely to
have more customers than Sungai Petani. Nevertheless, both of them are
quite famous in their own state. It wasn't easy for us to make decisions but we
still chose New Image Optical.
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19.
Appendix
Group Photos in Eye 2 Eye
Business Details:
Business Owner : Mr. Kim Zu
Location : ​Ground Floor, 13, Lorong 20, Taman Patani
Jaya, 08000 Sungai Petani, Kedah, Malaysia
Contact Number : +60 4­425 3388
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20. Group Photos in New Image Optical
Owner’s Name : Ms. Sherene Lim
Location : 10, Lorong CP 4 3/8, Taman Cheras Perdana, 10 Mile, Jalan
Cheras, Cheras, 43200, Cheras, Selangor, 43200, Malaysia
Contact Number : ​+60 3­9074 2985
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21. Questions and answers
New Image Optical
Q)Can you please introduce yourselves?
A)Please call me Aunty Sherene Lim.
Q)Your shop located at which area?
A)Located at Cheras Petaling.
Q)How many branches do you have for your business?
A)Just one branch only at Cheras Petaling.
Q)Around how many employees do you hiring for your business?
A)Around 4 employees.
Q)What products did you sell in your business?
A)Normal spectacles, sunglasses, and contact lens. Other than that, we will
provide eye potion and others services to our customers.
Q)What is the top sale products in your business?
A)We don’t have any top sale products. We depend on what our customers
actually want and what customers actually need. For instance, we will
introduce students with the spectacles that can usually use in studies.
Q)Can you estimate how many customers do you have per month?
A)More than 120 customers monthly.
Q)When is your business started?
A)Around 20 years ago.
Q)Who is the founder of this business?
A)One of my friend and I started this business as a partnership.
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22. Q)What is the purpose you started your business?
A)To get a stable jobs and earn profits to support my family’s expenses.I
don’t have to stress so much because it is a indoor business and i no need to
carry stuffs up and down.
Q)What problems do you met before and you get through it?
A)Some customers have some problems with their spectacles so we will help
them to fix it.For example, if customers feel not comfortable when they
wearing our spectacle we will help them to adjust it or change a new spectacle
for them.Next, for the customers who have diabetes and hih blood pressure
will influence their eyes’ degree.
Q)What time you start your business everyday and there are how many off
days ?
A)11am to 9pm. We close our shop every public holidays only.
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23.
Eye 2 Eye
Q)Can you please introduce yourselves?
A)I am Mr.Kinzu and 35 years old. I stay at Sungai Petani.
Q)When you started this business ?
A)Around 10 years ago.
Q)Do you have any branches for your business?
A)I will open another branch for business soon.
Q)How many employees do you hiring for running your business?
A)There are only 2 employees i hired.
Q)What products do you sell and do you provide anything for your
customers?
A)We sell spectacles, sunglasses and also contact lens. We also will provide eye
potion as long as they buy our products.We also will provide good services to
customers if they have any problems about their eyes and spectacles.
Q)Can you estimate how many customers do you have monthly?
A)Around 50 customers every month.
Q)What brand will you introduce to your customers if they are the first time
come to your shop?
A)For sunglasses, I will introduce them Ray­Ban because the quality is good
enough. For the normal spectacles, I have to know the customers’ budget and
only introduce them the suitable spectacles.
Q)What is your purpose to start your own business?
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24. A)To get a profitable and stable job as well as to be the boss of his own
business.He also have to earn profit to support his family’ daily expenses.
Q)Do you met any difficulty or problems when you running your business?
A)Ya, of course. Few years ago, the problem I met are not enough money to
spend and income is low when the inflation rate is high.During that time, I
will work very hard and try to figure it out.
Q)Do you have met any competitors ?
A)Ya, there are one or two spectacles’ shop at Sungai Petani as well.
Therefore,we have to provide more better services than others to attract more
customers.
Q)What time you start your business everyday and how many off days for
your business?
A)9.30am to 8pm daily.We will close our shop during public holidays.
Q)What brand will you introduce to me if wanna to buy a new sunglasses?
A)I will prefer Ray­Ban because its quality is good enough and its price is
reasonable as well.
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25. Recommendation
Eye 2 Eye
­ Firstly seeing as the business has a lot of clients in the close­by district it
would be most useful towards the business to promote his items and
administrations to a bigger group in further more inaccessible zones. He
also did some advertising on facebook and poster to promote the
business exponentially.
­ Next , the price of the spectacle also will affect the business and the
services as well . Price must be reasonable to all customers even though
the profit is less, that is fine . They can attractive more customers to
grab their spectacle in here.
New Image Optical
­ There is no any branches yet but they are planning to have another
branch in future time. When i went to there for interview time , we sit
down waiting for the boss which is Ms. Sherene Lim do settle down all
her customers. i waited for about 2 hours , it show that the business is
really good.
­ Make more advertisement about their new machine. Ms. Sherene Lim
can actually provides very good vision tests with their new equipment,
but not many people know about their advanced service. So they keep
doing advertisement about it.
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26. References
https://www.google.com/?gws_rd=ssl#q=the+image+optical+cheras
https://www.google.com/?gws_rd=ssl#q=eye+2+eye+sungai+petani
https://www.google.com/maps/@3.0459048,101.7674506,3a,75y,305.15h,83.84t/
data=!3m6!1e1!3m4!1sEZ7xIw599XtGyf3CdLZXAA!2e0!7i13312!8i6656!6m1
!1e1
http://en.yelp.my/search?cflt=opticians&find_loc=Cheras%2C+Selangor
http://en.yelp.my/search?cflt=opticians&find_loc=Cheras%2C+Selangor
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