SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN

THE DESIGN SCHOOL

FOUNDATION IN NATURAL BUILD ENVIRONMENT

GROUP MEMBERS: MOY CHIN HOONG 0314014

PARHAM FARHADPOOR 0313698

HASAN RUBAYET 0308941

ENGLISH 2 (ENGL 0205)

FINAL ASSIGNMENT: COMPARATIVE ANALYSIS OF 3

BUSINESSES

LECTURER: CASSANDRA WIJESURIA

SUBMISSION DATE: 13TH FEBRUARY 2014 (THURSDAY)

TABLE OF CONTENT

SUMMERY…………………………………………..……..PAGE 2

BRIEF BIO OF CHINA HOUSE………………...…..…..PAGE 2 - 3

ANALYSIS OF THE BUSINESS BENCHMARKS FOR CHINA HOUSE……………………………………………........PAGE 3 - 4

BRIEF BIO OF DR. CAFÉ COFFEE………..………..……...PAGE 5

ANALYSIS OF THE BUSINESS BENCHMARKS FOR DR. CAFÉ COFFEE……................................................................PAGE 6 - 7

BRIEF BIO OF STARBUCKS COFFEE………..….............…PAGE 8

ANALYSIS OF THE BUSINESS BENCHMARKS FOR STARBUCKS COFFEE……...............................................................PAGE 9 - 10

RECOMMENDATIONS FOR IMPROVEMENT OF ALL THE BUSINESSES……………………………………..…. PAGE 11 - 12

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THE SUMMARY TABLE OF SIMILARIRTIES AND DIFFERENCES BETWEEN ALL THREE BUSINESSES…………...………..PAGE 13

APPENDIX………………………...………………...…...…PAGE14 - 26

REFERENCES LIST…………………….………………...………

PAGE27

SUMMARY

For this assignment and research, our group chose three businesses in the food

industry. First we went to Penang Island to accomplish our first research. The first

coffee shop is 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. Whereas, the third café we chose is in Subang, Selangor. Gradually

the name of those coffee shop are China House, Dr. Café Coffee and Starbucks

Coffee. The focal aim is to compare between these coffee shop businesses. For

instance, compare between the business strategies, number of the competitors,

geographical location, number of brunches, main product, 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 Victoria Street, George Town and it is founded by an

Australian lady, Narelle McMurtrie on October 21, 2011 and is managed by Ms.

Shirley. China House doesn’t have any other branch and there is only one. This place

service to its daily average 110 to 130 customers 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,

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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 with grilled chicken. 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 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.

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 and these café are

also considered as the top competitors of China House. Other than these, 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, and Orea. But of course, their coffee also have

a very good review from their customers. That is why The Twelve Cups can be

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known as the top competitors of China. They also use 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 and it is founded in 2006. 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 that, they have a signature tea, which come with a pink colour lid is

called Dilmah Tea.

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 just around 10 minutes walking distance from China House.

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. 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.

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BRIEF BIO OF DR.CAFE COFFEE

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. He

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.

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. 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

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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

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 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, 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.

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

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. The Red Beanbag’s main products are food, beverages, and coffees however

Dr. Café Coffee.

The second top competitor is San Francisco Coffee. It is founded in 1997 and they are

also 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.

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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, 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.

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BRIEF BIO OF STARBUCKS COFFEE

The third and the last cafe interviewed is Starbuck Coffee, and for this purpose this

group went to one of the branches in ss15, Selangor. This café is known as the most

famous coffee shop all around the world and also for providing high quality coffee

drinks. Starbucks has more than 18,000 branches in countries and almost everyone

knows this café or at least has tried once. This brand started with a coffee shop in

Seattle, Washington which opened by a writer Gordon Bowker, an English teacher

Jerry Baldwin, and a history teacher Zev Siegl in March 30, 1971. These three

partners met each other for the first time as students in University of San Francisco.

Howard Schulz joined Starbucks in 1982 but he couldn't convince the owners, so he

went his own way to start the Il Giornale chain of coffee bars in 1986 and then this

café started expanding its branches beyond Seattle to rest of the United States of

America and then to all over the world during 1990s. After becoming one of the first

companies to offer stock options to its part-time employees, Starbucks has become a

publicly traded company and then has started to become the most popular cafe in the

world by far.

The Starbuck mission is to inspire and nurture the human spirit – one person, one cup

and one neighborhood at a time. So they believe that they always try to serve with the

best possible quality by sending their coffee buyers to America, Africa, and Asia to

select the highest quality coffee bean. Starbucks products are generally divided to four

categories, coffee with more than 30 blends and single-origin premium coffees,

handcrafted beverages, merchandise such as mugs, books, and gifts, and also fresh

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foods including baked pastries, sandwiches, salads and many more. In overall they see

themselves as a responsible company that always have the best quality plus other

considerations such as ethical sourcing, environmental stewardship, and community

involvement.

ANALYSIS OF THE BUSINESS BENCHMARKS FOR

STARBUCKS COFFEE

As Starbucks is an international coffee trademark, it has lots of international

competitors all around the world, but for our assignment we chose Starbucks coffee

shop located in SS15, Subang. In that locality we had found 8 top competitors of

Starbucks coffee shop, those are Shakespeare, Coffee beans, Good friend restaurant &

café, It’s a Grind Coffee House, BROOKLYNB bakery & café, Cuppa Kaffe, Flat

White and MEEPLES European Boardgame Café. These coffee houses sited very

close to Starbucks coffee shop, possibly just about 10-15 minutes walking distance

from Starbucks. The placement of those coffee shops creates immense rivalry to

Starbucks.

Among those competitors we found, there are 3 top competitors. They regard as top

competitors by reason of their main products. The nearest coffee shop is Flat White, it

is only 100 meters away from Starbucks and located in same street with Starbuck. The

main product Coffee, Cakes and Snacks in point of fact make them the top

competitor. Their cake looks moist and most of the customers review in their favorite.

Nutella Cappuccino is their main advertising creation that bring most customers and it

is served with many designs on top of it.

The second top competitor is the Coffee Beans. This coffee shop is the international

coffee brand and originated from same country U.S.A as Starbuck. Coffee Bean

established in 1963 even before Starbuck had established. The brunch in the Malaysia

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situated at SS15 is less that 1Km away from the Starbucks brunch in the same street.

Their main product such as coffee, tea, merchandise and food are widely

recommended by the customers.

MEEPLES European Boardgame café consider as third top competitor. This coffee

shop founded in 2010 at Subangjaya. While customers are having fun time with their

buddies, they can play various kind of board games. The staff there will guide and

teach you everything about a new board game, since most of them are not available in

Malaysia. Their main product coffee, milkshake, snacks & desserts are not the main

appeal to the customers because customers mostly spend time playing board game

there.

The obstacle of the Starbucks is the all coffee shop around it. But we realize that

though coffee bean we consider as top competitor, but it is the tuff one. It is because if

it is really nearby the Starbucks like less than 100m, certainly it will affect Starbucks

business, but still Coffee Bean getting attention from customers although it is 1km

away from Starbuck. The second barrier Starbuck facing is the cleanliness of the

entire area, the coffee shop situated just next famous Asia Café and due to that Café

the whole area is stinking and grimy. So there is every possibility to get fewer

customers. Third case is wrong choice of the location. People around the area are

students and the more likely to go to Asia Café for cheaper price of food and drinks,

since Starbucks is one the most expensive coffee house.

From the very beginning, the Starbucks marketing strategy has focused on creating

the “third place” for everyone to go to between home and work. Creating this unique

and relaxing “experience” and “atmosphere” for people has been very important for

the company as they have realized that this is one of the strongest concepts attached to

the company, to which customers have been strongly attracted. Customer satisfaction

is a very important issue with Starbucks. From entrance to the store to the very last

drop of their coffees, it is a must that customers feel the uniqueness of enjoying their

Starbucks coffee experience. Without a doubt, Starbucks Coffee Company knows the

answer to the question, “Why is customer service important”. Starbucks history has

shown that they place a huge emphasis on product quality. Their coffee, even if priced

slightly more expensive than expected, is notorious for satisfying customers with its

rich, delicious taste and aroma.

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RECOMMENDATIONS FOR IMPROVEMENT OF ALL THE

THREE BUSINESSES

Penang is an isolated island from main land of Malaysia and 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. Around the China House coffee shop, there are many coffee and food

shops. 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.

On the other hand the circumstances we had found during our second interview for

Dr. Cafe coffee just upside down. 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

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coffee recipe; add more choices and cuisine on menu, so that customers can have

three times of proper meal in a day and finally employ more skilled waiter/waitress.

However, Starbucks Coffee also has a lot of weakness as it is a very modern coffee

shop. For instance, they are having the problems like limitation of menu. Although

they have a lot of choices for the drinks, but they only have little choices for food.

Most of the food the selling are just pies and cakes. Unlike Coffee Beans, Coffee

Beans serves a lot of food such as Big Breakfast, salmon sandwiches and speghetti.

Thus, many people believe that Starbucks Coffee can be substituted by the other

coffee shops. Futhermore, as Starbucks provides an excellent customer service to earn

their customers’ loyalty. They pay their employees more than the normal restaurant or

retailers and also provide a lot of benefits for their employees. So, this may results a

high costs for the company. Starbucks Coffee should improve themselves by adding

more food into the menu such as breakfast and lunch set to attract more customers.

Whereas for the high costs, they should manage their capital well and maintain the

quality of the customer service.

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THE SUMMERY TABLE OF THE SIMILARIRTIES AND

DIFFERENCES BETWEEN CHINA HOUSE, DR. CAFÉ COFFEE

& STARBUCKS COFFEE

COMPETETIVE

TRAITS

CHINA

HOUSE

(Penang)

DR. CAFÉ

COFFEE

(Klang

Valley)

STARBUCKS

COFFEE

(Subang)

Number of

competitors

8 10 8

Barrier to entry Hard Hard Hard

Pricing More expensive Less

expensive

Expensive

Size 5 lounges 1 lounge 1 lounge

Design Fusion style Modern

style

Modern

style

Daily number of

customers

More than 100 Around 40 More than

100

Type of the café Multipurpose Single

purpose

Single

purpose

Nature of the Oligopoly Oligopoly Oligopoly

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business

APPENDIX

Contact Details 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

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Contact Details 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

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Contact Details for Starbucks Coffee:-

- 79, G Floor, Jalan SS15/8A, 47500 Subang Jaya

- 1300 80 8989

- http://www.starbucks.com.my/

- customer@starbucks.com.my

- https://www.facebook.com/Starbucks

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Interviewed notes:-

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PICTURES:-

CHINA HOUSE

VIC BAR

READING SPACE GINGER BUD SPAGHETTI W/ GRILLED CHICKEN

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COMPETITORS OF CHINA HOUSE & THEIR PRODUCTS

DR. CAFÉ COFFEE

THE TWELVE CUPS THE CREPE CAKES

LIGHTHOUSE COFFEE DILMAH TEA

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COMPETITORS OF DR. CAFÉ

COFFEE & THEIR PRODUCTS

PARHAM WAS ORDERINGDR. CAFÉ COFFEE

THE MAGIC BEANS THE CUSTOMERS

THE DRINKS ORDERED BY USTHE FOOD &SNACKS

THE SAN FRANCISCO COFFEE THE BREAKFAST

THE O’BRIENS20

STARBUCKS COFFEE

COMPETITORS OF STARBUCKS

COFFEE & THEIR PRODUCTS

STARBUCKS COFFEE STARBUCKS COFFEE

DOING RESEARCHES THE STARBUCKS CARDS

COFFEE BEANS THE BREAKFAST

FLAT WHITE CAFE

CHOCOLATE CAKE THE AFFOGATOS

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MEEPLESTHE MENU

CUSTOMERS ARE PLAYING BOARDGAME

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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.

coffee.org. (2013). History of starbucks. Retrieved from

http://www.coffee.org/history-of-starbucks

Interview by Parham Farhadpoor []. Brief bio of starbucks coffee.

Starbucks corporation. (1999). Retrieved from

http://www.mhhe.com/business/management/thompson/11e/case/starbucks-

2.html

Learning and development. (2013). Retrieved from

http://www.starbucks.com.my/about-us/career-center/learning-and-

development

Cafe menu. (2010). Retrieved from http://www.meeples.com.my/cafe-

menu.php

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