1. SCHOOL OF ARCHITECTURE, BUILDING AND
DESIGN
THE DESIGN SCHOOL
FOUNDATION IN NATURAL BUILD ENVIRONMENT
TOPIC: A COMPARATIVE ANALYSIS OF 2 BUSINESSES OF
SIMILLAR INDUSTRY IN DIFFERENT GEOGRAPHICAL
LOCATIONS
GROUP MEMBERS: PARHAM FARHADPOOR 0313698
HASAN RUBAYET 0308941
MOY CHIN HOONG 0314014
SUBJECT: PRINCIPLES OF ECONOMICS
(FNBE 0135)
LECTURER: CHANG JAU HO
SUBMISSION DATE: 24th
JANUARY 2014
2. TABLE OF CONTENT
SUMMERY…………………………………………..……..PAGE1
BRIEF BIO OF CHINA HOUSE………………...…..…..PAGE1 & 2
BRIEF BIO OF DR. CAFÉ COFFEE………..………..…PAGE 2 & 3
ANALYSIS OF THE BUSINESS BENCHMARKS FOR CHINA
HOUSE……………………………………………........PAGE3 – 4
ANALYSIS OF THE BUSINESS BENCHMARKS FOR DR. CAFÉ
COFFEE……................................................................PAGE4 – 5
THE SUMMARY TABLE OF SIMILARIRTIES AND DIFFERENCES
BETWEEN TWO BUSINESSES……………………...….…..PAGE6
RECOMMENDATIONS FOR IMPROVEMENT OF BOTH THE
BUSINESSES……………………………………...…..…….PAGE7
APPENDIX………………………...………………...……...…PAGE8 – 16
REFERENCES LIST…………………….………………...………PAGE17
3. SUMMARY
For this assignment and research, our group chose two businesses in food industry.
First we went to Penang Island to accomplish our research. The first coffee shop
situated in the heart and tourist attraction of Penang Island, that is Victoria Street,
George town and the second interview we did in the posh area of KL, called
Montkiara. Gradually the name of those coffee shop are China House and Dr. Café.
The focal aim is to compare between this coffee shop businesses. For instance,
compare between business strategies, number of the competitors, geographical
location, number of brunches, main product, revenue, and commercial success list
goes on. Eventually we have found a lot of contrast.
BRIEF BIO OF CHINA HOUSE
The café that we chose to interview and analyse in Penang is China House. This very
unique café is located in, 153 & 155, Lebuh Pantai and 183B, Lebuh Victoria, 10300
George Town, Malaysia and it is found by Narelle McMurtrie who is an Australian
lady on October 21, 2011 and it’s been managed by Ms. Shirley. China House doesn’t
have any other branch and there is only one and it is open 9:00am to 12:00am during
weekdays and 9:00am to 1:00am during weekends. This place service to its daily 110
to 130, on average, costumers by around 25 employees and a manager. China House
is a traditional compound of 3 heritage buildings, linked by an open air courtyard.
Now converted into 14 existing spaces with shops, cafes, restaurants, galleries and
theatre. Their specialties include breakfast, lunch, dinner, coffee, and drinks but what
they are very famous is making the best quality homemade cakes, however their food
style contains Italian, Chinese, and Japanese, but their signature dish is ginger buds
spaghetti which comes with grilled chicken as well .China House has different
lounges, the first lounge at the entrance is a bar where all the alcoholic drinks and
cocktails serve there and also there is a stage for musical performance during
weekends, there are other lounges such as vine store for serving vine and having a
more quiet moments and also fine dining where people should enter more formal. The
rest of the salons are reading space, galleries, and art space and its name is VIC
because it’s facing Victoria Street. However the motives to set up this business are to
portrait the fusion of heritage and modernity plus uniqueness for heartening the art
4. culture around Penang Island. This café’s recent developments include providing free
Wi-Fi, upgrading coffee machine, and held Gisela and Marcella Mueller art and
photography exhibition.
BRIEF BIO OF DR.CAFE COFFEE
After visiting the first café in Penang, we found another café in the Klang Valley,
which its business name is Dr. Café Coffee. It is a franchise coffee shop founded by
Mr.Yousef S. Al Rajhi in 1997. Mr Yousef opened the very first outlet of Dr. Café
Coffee in Al Arouba Plaze in Riyadh, the Kingdom of Saudi Arabia. The branch that
we interviewed is located in Publika, Mont Kiara. Dr. Café Coffee has around 115
branches around Saudi Arabia and Asia. Most of the branches are located in Riyadh
and only parts of the branches are situated in Singapore and Malaysia. It has
thousands of employees and around 10 to 15 per branch. The date we went there was
5th of January, which is on Sunday. We reached there at around 1400 hours and there
are approximately 15 customers including us. There was one family of 6 persons
sitting at a round table enjoying their happy family time and another few persons were
with their laptops.
Coffee and teas are the main products of Dr. Café coffee. Other than their main
products, they have also served the other beverages such as fruit juice, cocktails and
Franilla. Franilla is actually a Frappuccino with the base of vanilla instead of coffee.
Furthermore, Dr. Café also provides some food like cakes, doughnuts, salads and E-
breakfast. So, the customers can have their breakfast, teatime and even supper here
with all these verities of food and beverages. Besides the food and beverages, they are
also selling their own merchandises such as tumbler, tea maker and coffee brewtech.
The founder, Mr. Yousef is a coffee lover. He was stimulated by the love of magic
beans (coffee) and therefore he started his journey by travelling around the world in
order to find the perfect cup of coffee. He had been to Yemen, where the coffee was
first discovered. And, he finally found out that he would be in the food and beverage
industry for the rest of his life while he smelled the aroma of freshly brewed coffee.
Then, he was inspired to learn more about coffee and the processes of making coffee
5. and also meet and socialize with the friends around the world. His aim to start this
business is to maintain the classic value of coffee traditions in a new way.
ANALYSIS OF THE BUSINESS BENCHMARKS FOR CHINA
HOUSE
For China House, there are approximately 8 competitors around its geographical
market. For examples, The Twelve Cups, Lighthouse Coffee, TRAFFIC and Kopitan
Classic, these four café are on the same street with China House. The distance
between is just around 10 minutes walking distance, and these café are also
considered as the top competitors of China House. Other than these four cafes, there
are still Edelweiss Café, Campbell House, Rainforest Bakery & Pastry and Brix &
Baume around that area. This situation has summed up that the competition of Café
around that area is very strong.
Out of these 8 coffee houses, the top 3 competitors are figured out in order to compare
their main products and specialties with China House. So, the nearest coffee shop to
China House is The Twelve Cups, which is also the top one competitor among the
three coffee shops. The Twelve Cups is founded in 2012, which is a year after China
House has been founded. Their main products are crepe cakes where come with a lot
of flavours such as mango, strawberry, green tea, Oreo and many more. But of course,
their coffee also have a lot of good review from their customers. That is why The
Twelve Cups can be known as the top competitors of China House mainly because of
the crepe cakes and coffee. Besides, they also used the strategy of designing a
drawing on the plate with chocolate syrup while they serve the food.
The lighthouse Coffee is the second top competitor. It is founded in 2006 and also
situated in the same street with China House. They are famous in their cakes, coffee
and also non-coffee based beverages. Their tiramisu cake got a very good respond
from their customers and also is one of their bestseller cakes. Other than the tiramisu
cake, they have a signature tea, which come with a pink colour lid is called Dilmah
Tea.
6. The third one is TRAFFIC. It is a combination of kitchen, bar and music room. There
are few reasons why it is one of the top competitors of China House. The first one is
the location, where it is also located in the same street with China House and the
distance is just around 10 minutes walking distance. The second one is because of the
music room and bar. This causes a competition with the bar in China House.
Due to there are a lot of competitors around China House, China House has the
specialty of 5 lounges in one café. This will eventually attract more customers with
different interests because they provide all sorts of entertainments such as cake house,
fine dining, bar and art galleries. Besides, China House also provides comedy and
musical performances from different countries during weekends in order to entertain
their customers. And, they also use a white paper as the tablecloth to allow their
customers draw on it while waiting for their meals.
It is very hard to start up a coffee house business today especially in Penang. This is
because there are so many café in this small island and the competition is very big.
Unless you have a very unique way in operating the café and also the menu, or else it
is almost impossible for you dominate the market of café.
Furthermore, China House is operating in an oligopoly situation. This is because there
are few coffee houses dominating the market and competing with each other in the
island.
ANALYSIS OF THE BUSINESS BENCHMARKS FOR DR. CAFÉ
COFFEE
Competing for a café such as Dr. Café Coffee can be the main challenge, especially
for branches located in shopping mall where all the competitors gather together. This
branch that is located in Publika, Solaris Dutamas faces so many competitors such as
Namoo Bistro, San Francisco Coffee, The Red Beanbag, O’Briens, Marmalade Café
and others. All these cafés are in around one minute distance from Dr. Café Coffee, so
the share of the business among challengers is less compare to China House.
Among all of the competitors locating in Publika shopping mall, three of them are the
most important ones for Dr. Café Coffee. The first strong competitor for this café is
The Red Beanbag that is located exactly upstairs of Dr. Café Coffee which founded in
7. 2011 with only one branch till now. The fact is that they have much more customers
than Dr. Café Coffee and it’s because of the wide range of food and drinks in their
menu compare to the other café. The Red Beanbag’s main products are food,
beverages, and coffees however Dr. Café Coffee.
The other Dr. Café Coffee’s competitor is San Francisco Coffee founded in 1997 and
and they have some branches as a franchise brand. This café’s location is right
opposite of Dr. Café Coffee, so competition for them is very important. San Francisco
Coffee’s menu is wider than Dr. Café coffee but not as big as The Red Beanbag.
Their main products are coffee and snacks such as donuts and cakes, but this café
claims that they serve the freshest coffee.
O’Briens – Irish Sandwich Café is the other challenger that is trying to compete with
Dr. Café Coffee, however the number of customers is less than other competitors.
This Irish café started since 1988 and now is known as a franchise brand. O’Briens
reputation has been shaped on our famous made-to-order hot or cold sandwiches and
they believe is to serve with the highest quality.
The strategies used by Dr. Café Coffee to compete with other competitors are very
similar to famous cafes such as Starbucks and Coffee Bean but with just a bit cheaper
price. For example this café has chosen to serve customers very fast and convenient.
The other way of competition that separates them from other competitors is to serve
the best quality coffee gathered from all over the world such as central and Latin
American, east African, Arabian, and Indonesia and pacific region.
Since the nature of the business is oligopoly and there are very strong competitors in
this sector, the biggest challenge for them is to compete with famous coffee shops like
Starbucks or Coffee Bean, so they always need to maintain the quality which is
challenging for them. Another obstacle faced by Dr. Café Coffee is to travel around
and look for the best coffee beans, because this is the reason that makes them famous.
Compare to other international and local brand, China House is more commercially
successful, because its uniqueness, its local brand. Other coffee brand they own the
goodwill, but China House does not own any goodwill and it’s successful by its own
product.
8. THE SUMMERY TABLE OF THE SIMILARIRTIES AND
DIFFERENCES BETWEEN CHINA HOUSE & DR. CAFÉ
COFFEE
COMPETETIVE
TRAITS
CHINA HOUSE
(Penang)
DR. CAFÉ
COFFEE (Klang
Valley)
Number of competitors 8 10
Barrier to entry Hard Hard
Pricing More expensive Less expensive
Size 5 lounges 1 lounge
Design Fusion style Modern style
Daily number of
customers
More than 100 Around 40
Type of the café Multipurpose Single purpose
Nature of the business Oligopoly Oligopoly
THE YOUTUBE LINK OF OUR VIDEO
- http://www.youtube.com/watch?v=6BNgS9bdCJw
9. RECOMMENDATIONS FOR IMPROVEMENT OF BOTH THE
BUSINESSES
Penang is an isolated island from main land of Malaysia and itself is a state. Because
of the geographical issue the property value in Penang is very far above the ground
and furthermore its historical place that is under UNESCO World Heritage Site. As a
result whoever wants to set up business in Penang is extremely easier said than done.
Likewise the first interview we did for China House is to be found in the heart of
Heritage site that is Victoria Street, George Town. Around the China House coffee
shop, there are more than few coffee and food shops. More or less eight competitors
around the China House and among those there are main three competitors. When we
review those food shops they all have their own style of food and signature dish, but
compare with China House those shops are not as complete and unique as China
House, but still for earning more capital they (China House) can put a special menu
like every week basis there will be some new cuisine to change customer’s mouth
experience. There is one more thing that can actually bash the other competitors, if
somehow China House provides several parking spaces for customers and that day
will be the turning point for the business.
On the other hand the circumstances we had found during our second interview for
Dr. Cafe coffee just upside down. China House is strong enough in the market and for
to beat up its competitor need to be added some few features, but we found Dr. Café
Coffee is too weak to even compete its competitors. Compare with main three
competitors like The Red Beanbag, San Francisco Café and O’Briens Irish Sandwich
Café; Dr. Café Coffee lacking many things. For example they (competitors) have
more customers, more food options, variety of coffee making technique etc. Though
Dr. Café’s price is cheaper than other coffee shop, still they have to fight with
Starbuck and Coffee Bean, those consider as best. Besides they don’t have that much
international customer service. Not to beat but to be in the competition Dr. Café
Coffee must add range of coffee recipe; add more choices and cuisine on menu, so
that customers can have three times of proper meal in a day, employ more skilled
waiter/waitress.
10. APPENDIX
ContactDetails for China House:-
- 153, Lebuh Pantai Georgetown, 10300 Georgetown, Penang.
- +60 4-263 7299
- www.chinahouse.com.my
- info@chinahouse.com.my
- https://www.facebook.com/ChinaHousePenang
11. ContactDetails for Dr. Café Coffee:-
- Level G2, Block A4. Solaris Dutamas, No. 1 Jalan Dutamas 1, 50480 KL
- 800 – 122 8222
- http://www.dr-cafe.com/DCWebsite/Default.aspx
- info@dr-café.com
- https://www.facebook.com/drcafe.coffee.37?fref=ts
17. COMPETITORS OF DR. CAFÉ COFFEE & THEIR PRODUCTS
THE MAGIC BEANS THE CUSTOMERS
THE DRINKS ORDERED BY US
THE FOOD &SNACKS
THE SAN FRANCISCO COFFEE THE BREAKFAST
19. REFERENCES LISTS
dr.cafe coffee. (2014). Retrieved from http://www.dr-
cafe.com/DCWebsite/Default.aspx
China House Penang. (2012-2013). China house. Retrieved from
http://www.chinahouse.com.my/
Shirley. (2013, December 13). Interview by Parham Farhadpoor []. Brief bio
of china house.
Interview by Parham Farhadpoor []. Brief bio of dr. cafe coffee.
Dr. Cafe Coffee. (2009). Art Of Espresso, 6.
