Analysis of factors responsible for declining profits of Coles in Australia

Running head: RESEARCH IN BUSINESS
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Analysis of factors responsible for declining profits of Coles in Australia

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TABLE OF CONTENTS
Introduction.................................................................................................................................................................................... 3
Project statement...................................................................................................................................................................... 3
Aim and objectives/ research questions...........................................................................................................................3
Research question.................................................................................................................................................................... 3
Justification and potential output of the research..............................................................................................................4
Justification of research......................................................................................................................................................... 4
Potential output of the research project............................................................................................................................4
Conceptual framework and hypothesis development.......................................................................................................5
Research methodology................................................................................................................................................................9
Organizational structure of study......................................................................................................................................... 12
Time plan and Budget.............................................................................................................................................................. 14
References.................................................................................................................................................................................... 17
Appendix....................................................................................................................................................................................... 20
Time plan and Budget......................................................................................................................................................... 20

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INTRODUCTION
This research presents the project statement, aim and objective and research question. It also
shows the conceptual framework and hypothesis development. This report depicts the research
methodology for completing the research in a methodological manner. It also illustrates the
potential output of research, time plan, and budget.
PROJECT STATEMENT
Profits are one of the key indicators that are used by analysts to find out a performance of the
company. Coles focuses on increasing profits in order to get long-term success and survive as a
business. There are different factors, which directly contributes to make an alteration in the net
profit margin of the company. The profits margin demonstrates that Coles can convert sales into
profits. It also emphasizes on different costs related to revenue of products. Although the
different research was conducted to maximize the profits of the company but, this research study
gain an understanding of factors which are responsible for declining profits of Coles in Australia
(McDonald and Wilson, 2016).
AIM AND OBJECTIVES/ RESEARCH QUESTIONS
The main aim of this research is to analyze the factors responsible for declining profits of Coles
in Australia. Following objectives will be used to complete the main aim of this research:
 To explore the conceptual understanding of the factors responsible for declining profits of
Coles in Australia
 To address the factors responsible for declining profits of Coles in Australia
 To recommend the strategy for increasing profits of Coles in Australia
RESEARCH QUESTION

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 What is the conceptual understanding of the factors responsible for declining profits of
Coles in Australia?
 Which factors are responsible for declining profits of Coles in Australia?
 How Coles can increase the profits of the business in Australia?
JUSTIFICATION AND POTENTIAL OUTPUT OF THE RESEARCH
JUSTIFICATION OF RESEARCH
This research will help an investigator to create the deep knowledge about the conceptual
understanding regarding factors responsible for declining profits of Coles in Australia. This
research proposal will be vital for new and existing company as it builds knowledge about the
several factors, which may affect the profit of the company. As a result, it will enable the
company to make a rational judgment about the profitability of the company (Long and Fang,
2015). This research will also beneficial for researchers to make a further research regarding this
research issue and also provide knowledge about the strategy to increase the profits of Coles in
Australia.
POTENTIAL OUTPUT OF THE RESEARCH PROJECT
The research result will provide the deep understanding about the factors responsible for
declining the profits of Coles in Australia. Hence, this research proposal will aid to develop the
knowledge and assess the strategy that could be practiced by Coles to increase the profits. It will
also show the blueprint about the factors, which are beneficial to assess the causes of declining
the organizational profitability (Margaretha, and Supartika, 2016).
This report will also assess that there are different factors, which highly affect the profitability of
the company. Moreover, this report will attain all goals and objective of investigation and all
research questions will be solved by gathering the facts and figures. These all outcome about the

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investigation would be attained by academic work due to assessing the research concern
(Chumg, Cooke, Fry, and Hung, 2015). Moreover, this investigation will help the manager to
focus on several factors that could decline the profitability of Coles in Australia.
CONCEPTUAL FRAMEWORK AND HYPOTHESIS DEVELOPMENT
Conceptual framework
(Sources: Tripathy, Aich, Chakraborty, and Lee, 2016).
From the above conceptual framework, it can be stated there are different factors, which directly
affect the profit of Coles in Australia. These factors are higher supplier’s expenses, lower prices,
Ancillary COGS, intense competition and low revenues. Hence, Coles should develop an
effective strategy to increase their profit.
Analyzing the factors responsible for declining profits of Coles in Australia
According to Samnani Salamon and Singh (2014), higher supplier costs are responsible for
declining the profits of Coles in Australia. One of the significant factors that can lead to reducing
margin is maximum cost of goods sold. Suppliers naturally expect to gain their own margin and
Declining
profit of
Coles in
Australia
Factors responsible for declining
profits of Coles in Australia
 Higher Supplier Costs
 Lower Prices
 Ancillary COGS
 Intense Competition
 Low Sales

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revenue. Hence, it can be stated that expenses of Coles may increase due to producing and
supplying the goods within an organization. Suppliers cost could be declined by negotiating with
suppliers and charging higher rates on goods. Further, if the higher cost of goods sold adversely
affects the gross profit margin then, the company can negotiate harder and assesses the
alternative providers.
In contrast to this, Miller Jr, (2017) stated that lowering prices to produce revenue can decline
gross profit margin. Certain corporations regularly provide promotion and discount to influence
the buyers. When a company sells the small quantity of products then, a lower price can decline
the profit. Further, building a strong image permits the Coles to keep stable price points and
increase prices. When company constantly discount then it may face the risk as customers get
familiar with the declines price and do not pay a high price. As a result, it may decline the
profitability of the company.
In the view of Ashkanasy, Zerbe, and Hartel, (2016), ancillary COGS are another factor for
declining profit of the company. Higher selling pricing and ancillary costs may lead to increase
COGS. When a company moves to more environmentally friendly packaging then the company
can either pass the expenses to the customers or decline the profit of the company. The company
can figure out the ways for minimizing gains in these product associated areas and passing the
expenses to customers, which is effective protective actions.
In opposed to this, Clements-Croome (2015) evaluated that intense competition is another factor
for reducing the profit of the company. New competitors and gained rivalry from key market
participants can also impact on the profit margin. There are large numbers of customers as the
company needs to develop an eye-catching strategy for them. There is complexity for the
company to pay expected rate to customers. As a result, sales transaction of the company could