Pok Oi Hospital Tang Pui King Memorial College

Pok Oi Hospital Tang Pui King Memorial College Economics 759 Store Wong Hoi Sum 4 E (30) Wong Ka Ki 4 E (31) Chiu Cheuk Fung 4 E (5) Fok Ching Ho 4 E (7)

Content • • • Ownership Market Structure Expansion Division of Labour Demand supply

Ownership • Company name CEC International Holdings Limited 759 Store • Establish 7 July 2010 • Ownership public limited company (listed company) • Principal Activities Retailing of food and beverages , design, development, manufacture, electronic components • Code CEC INT'L HOLD(759 ) • Chairman Lam Wai Chun • Place Incorporated Bermuda

Ownership • • Listing Category Primary Listing Registrar Computer share Hong Kong Investor Services Ltd. Listing Date 15/11/1999 Trading Currency HKD • Authorized Shares 1, 000, 000 • Issued Shares 666, 190, 798 (as at 31/3/2014) • Par Value HKD 0. 1000 • Board Lot 2000 • Market Capitalization HKD 1, 678, 800, 811

Ownership • Features of limited company A legal entity Lam Wai Chun (Chairman of 759) does not have to bear legal responsibility. Limited liability The liability of 759 shareholders is limited to investment amount. Lasting continuity Even if the shareholders retire, dead will not affect the firm’s continuity.

Ownership • Features of limited company Separation of ownership and management The board of directors manages the firm, which is appointed by shareholders during the annual general meeting. Higher profit tax rate than sole proprietorship and partnership For sole proprietorship and partnership is 16% but for limited company is 16. 5%

Ownership • Features of limited company More complicated set-up procedure 759 Store has to apply the Companies. Registry and may incur high costs to be a listed company. Wider source of capital 759 Store can raise capital by issuing shares and bonds.

Market Structure Oligopoly Definition: There are several dominant sellers (chain store selling snacks). 187 branches Competitors: Okashi. Land (零食物語 ) (about 53 branches)

Features (compare with Okashi. Land): 1) Differentiated products 759 Store sells Japanese, Korean and Taiwanese food and drink items. Okashi. Land mainly sells Japanese snacks , for example, Koala's March. They also provide different services.

2) Barrier to entry - 759 store has 187 branches - Okashi. Land has about 53 branches - Other shops, eg, Snack Wonderland(好多 多直銷中心). It has only 5 branches It reflects that Snack Wonderland hardly enter the market as the cost of setting up a branch is high, it doesn’t have enough capital.

3) Imperfect information Both of 759 store and Okashiland don’t know all information of the other side. 4) Price setter As there are imperfect information, both of them have price setters to set the price of their products.

5) Competition Price competition Although 759 store and Okashi. Land may sell the same products, the price that they set are different. One will be cheaper than another. (Example Next page)

Eg, Meiji Chocolate 759 store sets it at $21. 6 ($19. 6) Okashi. Land sets it at $29 ($26)

Non-price competition 759 store and Okashi. Land will give i) Discounts ii) Free gifts to costumers iii)Advertising attract more customers improve their image introduce new products

Other Examples: 759 store: Okashiland:

Expansion • Conglomerate expansion It refers to combination of firm producing different product kawaii land Sell cosmetic Household product market Sell pet snack and household product

Expansion • Lateral Expansion It refers to the combination of firm producing related but not competitive goods Frozen food market Sell frozen food and household product Supermarket Sell fruit, frozen food and household product

Expansiom • Conglomerate and lateral expansion advantage Take advantage of brand name Spread risk by diversification Enjoy economies of scale Resource can be shared between companies To diversify sources of income and spread risk To improve corporate image

Division of labour • http: //www. youtube. com/watch? feature =player_detailpage&v=v. CYzhnxyn 0 Q • From the clip, we can see that the owner (Mr Lam) gives his labours lots of autonomies and let labours employ the staff by labour themselves so that strengthen the sense of belonging→ play the division of benefits effectively

Types of division of labour Complex複雜 division of labour A person specialises in producing a particular product or service. 20

759阿信屋 Types of division of labour Complex division of labour 21

Example: 759阿信屋 Purchasing Quality control Transporting 22

Advantages益處of division of labour P. 141 • 1. Raising提高labour勞 productivity more output is produced from the same quantity of labour the same output is produced with less labour 23

Advantages of division of labour Raising labour productivity a. choosing the most suitable person for the job各展所長 b. practice makes perfect熟能生巧 c. saving節省time in training訓練 d. saving time in moving around轉換 operation崗位 f. mechanisation機械化 24

Advantages of division of labour • • 2. Saving resources from the production of capital goods With division of labour, workers need not be equipped配備with the wholeset of capital tools 具. 25

Advantages of division of labour • Example: before之前division of labour Each worker has to be equipped with the whole set of capital tools. 26

Saving time in moving around operation 27

Demand Supply • 疑因廉價遭財團打壓 • 2011年 10月，屬於中小企業的759阿信屋，疑因罐裝可口可樂 定價太低，遭代理太古要求上調可樂的零售價，後更被停止供 應旗下全線飲品，連鎖店老闆懷疑是有其他大型零售財團向代 理可口可樂的公司太古施壓所致。太古公司承認曾提供建議零 售價格予「759阿信屋」參考。消委會稱不評論個別事件，但 指若競爭法他日通過後，類似行為可能會屬「濫用市場地位」 的違法行為。October 2011, belongs to SME 759, allegedly as a result of Coca-Cola cans priced too low, the agent was raised Swire requirements cola retail price, even after being discontinued its line of drinks, chain boss suspect there are other large retail consortium to Swire Coca-Cola pressure agents due. Swire Pacific has provided a suggested retail price admit to "759" reference. The Council does not comment on individual cases referred to, but refers to the future competition law if passed, similar behavior may belong "abuse of market position" violations

• 太古可口可樂香港對「759阿信屋」事件的聲明 • 根據公司的紀錄，太古可口可樂香港自 2011年 10月7日向「759阿 信屋」送貨後，至今並未收到有關客戶的新訂單。我們曾於 10月 13日與有關客戶開會，並了解客戶在合作上的意見。由於近年原 材料及生産成本不斷上漲，經慎重評估各方因素後，我們亦無可 避免地調整部份產品的批發價格。我們一直以來以誠懇互惠的態 度與客戶磋商和交易，並提供建議零售價格予不同銷售渠道的客 戶，讓他們在調整零售價格上作為參考。 • Company statement of Swire Coca-Cola HK on the incident of “ 759 Store” • According to the record of Swire Coca-Cola Hong Kong, it shows that the company has not received new order from the “ 759 Store” since the delivery made on 7 October 2011. We have met with the concerned customer to understand their ideas on future cooperation on 13 October. Due to the continued upward trend of operational and raw material costs, despite our best efforts to balance our costs with customer needs, we have inevitably taken the decision to adjust the wholesale prices for certain products. Achieving mutually beneficial interests has always been our policy in doing business with customers. We provide suggested retail prices to customers of various sales channels for their reference.

• C • S • P • Qs • P 759 sets Below equilibrium price • Qd > Qs • Shortage (Excess demand) exists • Supply no longer exists