$2 Superstore - Business Investigation Report

This report is prepared for Mr. Lou, the owner of the $2 superstore located in the Casey Central shopping center, Narre Warren South, Vic, 3805. Prepared by Lylan Ranatunga, a Business Analyst working for P.W.C. In this report, we will be introducing more efficient surveillance measures into the business, as opposed to the current ones in place.

Lylan Ranatunga – Business Analyst
$2 SUPERSTORE – BUSINESS
INVESTIGATION REPORT

Table of Contents
Executive Summary...............................................................................................................................2
Introduction...........................................................................................................................................3
Business opportunity.............................................................................................................................4
Technology solution..............................................................................................................................5
Current System Integration...................................................................................................................5
References.............................................................................................................................................7
Appendix A:...........................................................................................................................................8

Executive Summary
This report is prepared for Mr. Lou, the owner of the $2 superstore located in the
Casey Central shopping center, Narre Warren South, Vic, 3805. Prepared by Lylan
Ranatunga, a Business Analyst working for P.W.C. In this report, we will be introducing
more efficient surveillance measures into the business, as opposed to the current ones in
place. In doing so, the business will run more efficiently and will create more accountability
to the current losses the business seems to be having and in result generate methods to cut
these losses. “Only one in 17 incidents of employee theft and one in five incidents of
shoplifting were reported to the police.” (Taylor. N, 2002) This Australian study shows that
the majority of theft to small businesses goes unhandled mainly due to not having sufficient
evidence, and in result, the business owner must bear the cost of these losses.
Advanced surveillance systems will help Mr. Lou to monitor their store at any time or
trace back to specific times and dates when an incident does occur. Your $2 superstore which
is mainly a $2 but not limited to, have some items for sale upwards of even the $70 mark, and
unknowingly theft of these items can rack up to a substantial amount. “A typical business can
lose up to 5% of its annual revenue to fraud.” (Edwards. R). Through the installation of these
surveillance features, we are aiming to bring down this percentage down frantically, and this
will happen as losses will be accounted for and then dealt with accordingly.

Introduction
Employee surveillance problem is one of the serious issues affecting modern
businesses even though technology has changed the way business is conducted. According to
(Beck, 2017), employee theft accounts for approximately $38 billion in losses every year
causing retail shrinkage. Retail shrinkage, in this case, implies the difference between the
recorded inventories at the end of the year as compared to what had been recorded at the
beginning of the year. Such losses are often attributed to factors such as theft, shoplifting,
auditing issues, vendor fraud, as well as administrative errors. As expected, there is a high
correlation between the complexity of the stores or business entity with a lack of proper
surveillance measures.
It is worth noting that lack of surveillance poses a serious profit threat to businesses
that have low-profit margins such as Your $2 Superstore. Whereas internal theft accounts for
the highest amount of retail shrinkage, external theft such as robbery also accounts for
appreciable losses incurred by Your $2 Superstore.
With the overwhelming improvement in technology, more businesses are using
computerized processing systems as a replacement for human labour. In conjunction with the
computerized systems are various control subsystems such as electronic article surveillance,
radio frequency identification devices (Fan, Chang, Gu, Yi & Deng, 2014). The use of such
systems has enabled control of stock movement thereby reducing retail shrinkage
significantly. However, use of such systems has lately been augmented with the use of human
resource (“Discount Variety Stores”, n.d). For instance, many businesses have employed loss
prevention specialists, loss prevention specialists’ agents and store detectives, internal and
external auditors. More importantly, there has been a significant investment in software and
network security personnel to protect the business from internal or external hacking or any

form of system compromise. The bottom line is that synergistic use of these methods can go a
long way in reducing retail losses significantly (Sheng, Tijun & Weili, 2010).
Business opportunity
I will use the SWOT analysis business strategy to help outline the business
opportunity for Your $2 Superstore.
The fishbone analysis below shows that shoplifting, retail shrinkage, employee theft,
and robbery are causes of loss of revenues of your $2 Superstore. And these can be addressed
by new technology such as loss prevention technologies, audits, benefit denial systems, and
surveillance cameras.
Strenths
The main strength is the mission statement, brand image, technological
advancement, and low-cost leadership strategy and low priced goods.
Weaknesses
The main weakness is loss of revenues through theft due to lack of
surveillance. Other weaknesses of Your $2 Superstore are weak online
and e-commerce strategy, the superstore retail model is losing ground
among customers, limited global presence and competitiveness and lack
of strategic customer relationships.
Opportunities
The main opportunities are growth in the global e-commerce and online
sales.
Theft reduction through surveillance which will increase profits.
Threats
The main threats are maturing markets, stiff market and industry
competition.

Fig 1: Fishbone Diagram
Technology solution
I recommend that your business should change its surveillance and monitoring
practices process by employing the use of loss prevention technologies, audits, benefit denial
systems, among others as some of the most viable measures to prevent loss of revenues
through theft. For instance, most retail stores, warehouses, and workshops have an
architectural layout purposely designed to make it possible to control theft. In addition, the
invention of auditing technologies has made it possible for businesses to carry out audits in
real time using auditing software. This way, it is possible to tell when theft is happening and
therefore be in a position to employ necessary measures in time. The use of video technology
including 24-hour CCTV surveillance systems will come in handy in addressing the problem
at hand for Your $2 Superstore.
Current System Integration
The part of your business our recommendation addresses is the issues of
surveillance that you $2 Superstore is currently facing and how they can be
addressed.

The diagrams below indicate the way you currently use mirrors to do monitoring
and surveillance.
Fig 2: Surveillance before installation of cameras
The diagram in Appendix A (Figure 3) indicates how we intend to install
surveillance cameras for monitoring.

References
Beck, A. (2017). Reconceptualising loss in retailing: calling time on ‘shrinkage’. The
International Review of Retail, Distribution and Consumer Research, 27(4), 407-423.
doi:10.1080/09593969.2017.1319402
Discount Stores Market Research Reports & Discount Stores Industry Analysis |
MarketResearch.com. (n.d.). Retrieved April 7, 2019, from
https://www.marketresearch.com/Consumer-Goods-c1596/Consumer-Goods-Retailing-
c80/Discount-Stores-c658/
Discount Variety Stores – Australia Industry Report | IBISWorld. (n.d.). Retrieved April 7,
2019, from https://www.ibisworld.com.au/industry-trends/specialised-market-research-
reports/consumer-goods-services/discount-variety-stores.html
Fan, T., Chang, X., Gu, C., Yi, J., & Deng, S. (2014). Benefits of RFID technology for
reducing inventory shrinkage. International Journal of Production Economics, 147, 659-
665. doi:10.1016/j.ijpe.2013.05.007
Sheng, D., Tijun, F., & Weili, H. (2010). Analysis the Impact of the RFID Technology on
Reducing Inventory Shrinkage. 2010 International Conference on Optoelectronics and
Image Processing. doi:10.1109/icoip.2010.134
Taylor N. 2002. Reporting of crime against small retail businesses. Trends & issues in crime
and criminal justice No. 242. Canberra: Australian Institute of Criminology.
https://aic.gov.au/publications/tandi/tandi242
2003. Reporting of crime against small business. Crime facts info No. 43. Canberra:
Australian Institute of Criminology. https://aic.gov.au/publications/cfi/cfi043

Appendix A:
Fig 3: Surveillance System Diagram