Economics is a study of how society manage the scarce resources available to its full potential. My favourite topic in this particular subject is "Market Competition". "Market Competition" is about the types of competition in a market. It may be monopoly, oligopoly, monopolistic competition and perfect competition. This particular topic is my favourite because it teaches me about the economic state of each trade/market in our world today. For example, the Operating System market is controlled almost wholly by Microsoft. This means that they monopolize the market. This topic has taught me the nature of the markets today and it helps me to be careful in choosing the market I want to enter if I ever open a business. My least favourite topic in this subject is the Elasticity and Inelasticity of Demand and Supply. I find this topic confusing. Real life examples should be used to teach this subject instead of just a lecture. A project on this topic can also be done as it will also improve the grasps of students in this topic. The topic I think that will truly help me in the future is Price Theory (Demand and Supply). This topic will help me to set up strategies in my future projects. Complicated as it seems, this subject actually gave me valuable experiences. One assignment required us to compare the market of the same business in different geological locations. The locations chosen were Penang and Klang Valley. A trip to Penang was organised. This was my first trip to Penang and it was memorable! Loved every minute of it!.

FOUNDATION IN NATURAL AND BUILT ENVIRONMENTS

PRINCIPLES OF ECONOMICS

SEMESTER 2

JULY 2012 INTAKE

A TALE OF TWO BUISNESS:

COMPARATIVE ANALYSIS OF TWO QUANTITY SURVEYING COMPANIES;

JURUKUR BAHAN ANTARA (KLANG VALLEY)

AND

NOR AZAH CONSULTANT (PENANG)

AZMIRA YAAKOB (0312011)

QUINNIE TAN (0311888)

TABLE OF CONTENT

NO	CONTENTS	PAGE
1.	Key Summary	3
2.	Brief Biography of Businesses	4-5
3.	Comparative Analysis Of The Business’s Competitive Traits	6-9
4.	Recommendation	10
5.	Appendices	11-16
6.	Reference	17

KEY SUMMARY

This report is based on interview in two locations of firms in the same market. One firm is based in Penang and the other one is based in Klang Valley.

The nature of this particular market will be determined based on the characteristics of the market. A complete analysis of each of the firm’s competitors in their respective locations, the level of the barrier-to-entry, services provided and characteristics of the business is done to determine the nature of the market.

This report will also provide a brief introduction of the firms and their competitors. The strategies employed by each firm is also discussed to determine the determination of the firms to survive in their market.

BUSINIESS BIOGRAPHY

Jurukur Bahan Antara
Professional Quantity Surveyors : Construction Cost Consultants

The first company we interviewed is called Jurukur Bahan Antara. It is currently located in No. 25 Pent, Jalan SS 15/8A, Subang Jaya, Selangor. Jurukur Bahan Antara is now employing over 25 employers. However, it has no other branches. The main services provided by Juruukur Bahan Antara is quantitative surveying and cost planning. In addition to that, they also provide other services such as building economics, project management, turnkey projects and arbitration consultancy. Their estimated current number customers are less than 10. According to the interviewee, Jurukur Bahan Antara was founded in 1983 by Md. Yaakob bin Md. Shariff. The company was started to provide quantity surveying services to the industry. In the recent years, the company has acquired a few projects and the owner is satisfied with the company’s performance. Some of their notable clients are MAB, JOR, and DRB.

Meanwhile, the other company is called Nor Azah Consultant. Nor Azah Consultant is located in Lebuh Bukit Kecil 1Taman Sri Nibong, Sungai Nibong, Pulau Pinang. They have no other branches; however they plan to upgrade the firm into a limited liability company. There are currently 6 employees working for the firm. The main services provided by the company is quantity surveying consulting. The estimated current number of customers for Nor Azah Consultant is 5. The business was started in 2006 by Nor Azah Mohd. Salleh. The motive for stating thins business is unknown. In the recent years, the company has been doing well, as quoted from the interview; the company has been “profitable”. Some of their notable clients are Uda Land (North) Sdn. Bhd. , Bertam Properties Sdn. Bhd. and JKR.

COMPARATIVE ANALYSIS OF THE BUSINESS’S COMPETITIVE TRAITS

Based on the interview, both the quantity surveying firms have given an estimated figure of their competitor. However, due to different locations, the firms have different numbers of competitors. Nor Azah Consultant, located around Sungai Nibong in Penang estimated that they have more than 10 companies competing with them. Though when asked to name their top 3 competitors, the interviewee was reluctant to name their competitor. Hence, they gave us no answer and just said “every firm in Penang”. Meanwhile, Jurukur Bahan Antara, located in SS 15, Subang Jaya Selangor said that they have an estimated 200 and more competitors around their area. Jurukur Bahan Antara however named their top 3 competitors. The competitors they named are Nik Farid & Loh Sdn. Bhd, ARH Consultancy, and Pakatan International Md Isahak & Rakan-Rakan Sdn Bhd.

The top competitors 3 competitors named by Jurukur Bahan Antara are Nik Farid & Loh Sdn. Bhd, ARH Consultancy, and Pakatan International Md Isahak & Rakan-Rakan Sdn Bhd. Nik Farid & Loh Sdn. Bhd., also known as “PNFL”, and previously known as Juru Ukur Bahan Berakan is a charted quantity surveyors company. It was founded in 1972 by Hj. Mohd Tahir Majid (left 1974, deceased 1992), Tengku Zainal Rashid (left July 1972), S.K. Loh and Nik Farid Kamil. The charted quantity surveying firm is well known to give services such as Quantity Surveying/Cost Consultancy services, as well as Project Management, Facilities Management, Value Engineering, Technical Auditing and Contractual Advice. Some of their notable projects are Petronas Industrial Training Institute, Kuala Lumpur Stock Exchange H.Q, Kuala Lumpur, and Wisma Sime Darby, Kuala Lumpur. The second competitor, ARH Consultant is a company founded by Ahmad Azhar Rouse and Dato' Hisham Hj Jafrey. The company was founded in 1955. ARH Consultant provides services such as development procurement processes and project managements. Some of their notable projects are Suruhanjaya Tenaga EE Office Buildin Putrajaya Wilayah Persekutuan, Majlis Perbandaran Pasir Gudang
Johor, and Yayasan Pahang Kuantan Pahang. As for the third competitor, Pakatan International Md Isahak & Rakan-Rakan Sdn Bhd, little is known about them. The only thing known is that their headquarters is located in Jalan Pandan Prima 2
Dataran Pandan Prima, Kuala Lumpur. And they have 3 other branches located in Kota Kinabalu Sabah, Kuching, Sarawak and Pulau Pinang.

With a high number of competitors, the both Jurukur Bahan Antara and Nor Azah Consultant both uses a few strategies to attract customers. Nor Azzah Consultant are offering customers lower prices compared to their competitors and also form good relationship with the clients. They are also trying to build good reputation for their company so that customers will choose them for their reputation. Meanwhile, Jurukur Bahan Antara is offering high quality services and reasonable fees to their customers.

According to the interviewee from Nor Azah Consultant, new businesses trying to enter quantity surveying market in Penang would not face a strong barriers-to-entry. This is due to the low number of quantity surveying firms in Penang compared to other places. For Jurukur Bahan Antara, the interviewee said that new business entering the market, would experience a reasonable barrier-to –entry. It would not be too hard to enter the market, but it would not be easy either.

The nature of the quantity surveying market is perfect competition. Perfect competition is a situation whereby no players are large enough to control the market power to set the price of a similar product or service. The players in this market are generally “price takers”, produces or provides the undifferentiated and standardised products and the buyers and sellers have perfect information about the price prevailing in the market. The nature of this market is determined as perfect competition due to a few factors. The first being a weak barrier-to –entry. Based in the interview results, both firms claimed that there it is quite easy to enter the quantity surveying market. Another reason is both the firm provides similar standardised; quantity surveying and quantity surveying. Although one of the firm provides a few other differentiated services such a s building economics and project management. The final reason is that currently, there is no other substitute for these types of services

COMPARATIVE ANALYSIS SUMMARY TABLE

Competitive Traits	Nor Azah Consultant Penang	Jurukur Bahan Antara Klang Valley
1. Number of Competitors	More than 10	More than 200
2. Barrier to Entry	Weak	Weak
3. Differentiated or Standardized Products/Services	· Standardised	· Standardised · Differentiated -Building Economics -Project Management
4. Pricing Power	Price Taker -pricing for their services is affected by their competition	Price Taker -pricing for their services is affected by their competition
5. Other Characteristics (e.g. Any close product substitutes, mutual dependence, constant advertising)	- No substitutes - Dependent on the state of economy -No constant advertising	- No substitutes - Dependent on the state of economy -No constant advertising
6. Verdict (Monopoly? Oligopoly? Perfect Competition?)	Perfect Competition	Perfect Competition

Based on the analysis, the company which is more commercially successful is Jurukur Bahan Antara. This company is more commercially successful because even with more than 20 times the number of competitors compared to Nor Azah Consultant, it is still able to stay afloat in the market and has been growing even more throughout the years. Jurukur Bahan Antara also has the ability to provide differentiated services which needs more capital. In addition to that, Jurukur Bahan Antara is more established compared to Nor Azah consultant due to the number of years being in the market.

RECOMMENDATION

Based on the analysis, there are several ways to increase the competitiveness of each business in their locations.

For Jurukur Bahan Antara, due to their number of competitors in their location, they should form good relationship with their clients. By forming good relationship with their clients, their customers would choose them over other firms. Secondly, they should also offers customers lower prices compared to their competitors. This will affect the pricing scale of the market, causing intense competitiveness in the market.

As for Nor Azah Consultant they should do more advertisements for their firm. Because the firm is fairly new, they need to promote the firm more to make potential customers aware of their company. Secondly, they should offer differentiated services instead of just the standardised services. By providing more services, clients will choose them due to the cut in cost of hiring one firm, who provides many services.

Bibliography

www.myhomedeco.com. (2013, May 22). Retrieved from Pakatan International Md Isahak Dan Rakan Rakan Sdn Bhd: http://www.myhomedeco.com/company/385/Pakatan-International-Md-Isahak-Dan-Rakan-Rakan-Sdn-Bhd

www.bqsm.gov.my. (n.d.). Retrieved May 22, 2013, from Jurukur Bahan Antara: http://www.bqsm.gov.my/bqsm/a_public/images/folder/jbantara/index.html

www.tutor2u.net. (n.d.). Retrieved May 22, 2013, from Globalisation : International Competiveness: http://www2.delta-search.com/?q=www.tutor2u.net%2Fbusiness%2Fstrategy%2Fglobal-business-comVPakatan+International+Md+Isahak+Dan+Rakan+Rakan+Sdn+Bhdpetitiveness.html&affID=119292&tt=gc_&babsrc=SP_ss&mntrId=DA17B639E5B07C6D

Karl E. Case and Ray C. Fair. 2004. Principles of Economics. International Edition: 7^thEdition. Prentice Hall.

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