BUS 707 Research Proposal: Analyzing Dollar Exchange Rate Fluctuations

This research proposal investigates the impact of Australian dollar fluctuations on the Australian retail industry, particularly focusing on companies like Woolworths and Coles Supermarket. It addresses the research problem of increased business risk due to these fluctuations and explores the social, economic, and business implications. The proposal includes a literature review, research aims and objectives, a detailed research methodology encompassing research philosophy, approach, design, strategy, data collection, sampling, and analysis methods. It also considers ethical considerations such as plagiarism and data manipulation. The research plan outlines the timeline and resources required for the study, aiming to provide insights into managing exchange rate fluctuations and improving business performance in the Australian retail sector. Desklib provides a platform to access this and similar solved assignments.

Running Head: PROPOSAL
DOLLAR EXCHANGE RATE FLUCTUATIONS

2
PROPOSAL
Table of Contents
Introduction................................................................................................................................4
Research problem.......................................................................................................................4
Background................................................................................................................................4
Ethical Consideration.................................................................................................................6
Literature Review.......................................................................................................................6
Aims/Objectives of the Research...........................................................................................9
Research methodology...............................................................................................................9
Introduction............................................................................................................................9
Research Philosophy..............................................................................................................9
Research Approach...............................................................................................................10
Research Design...................................................................................................................11
Research Strategy.................................................................................................................11
Data Collection Method.......................................................................................................12
Sampling Method.....................................................................................................................13
Data Analysis Method..............................................................................................................13
Conclusion................................................................................................................................14
Research Plan...........................................................................................................................14
Reference..................................................................................................................................16
Appendixes...............................................................................................................................17

3
PROPOSAL
Abstract
The currency fluctuations results from the floating exchange rate of different economies. The
fluctuations in the currency rate impacts the trade and commerce in the country. The present
research tries to explore the social, economic and business impact of the fluctuating dollar on
the retail industry. The retail industry of Australia is quite developed with duopoly market in
the country. There are two major business enterprises in the country operating in the retail
industry, namely, Woolworths and Coles Supermarket. The report will discuss the impact of
the Australian dollar fluctuation on the retail industry of the country.

4
PROPOSAL
Introduction
This paper demonstrates the impact of fluctuation in Australian dollar on the Australian retail
organizations. Every currency periodically experiences fluctuations due to several external
factors. When the currency slides its value, it creates a negative impact on the retail industry.
The retail companies are forced to raise their retail price which results in poor consumer
sentiments (Campbell, 2013). It is observed thatAustralia market is recovered after the 2008
financial crisis. The currency fluctuation rate can be defined as the slight increase or decrease
in currency as compared to the US Dollar. It also discusses the role of the exchange rate and
its direct impact on the nation’s trade level. Furthermore, the exchange rate influence the
ROI. This report will also consider different factors that influence the Australian dollar as
compared to the US dollar.
Research problem
In the current business scenario, it is analyzed that the fluctuation in the Australian dollar
exchange rate has increased the risk on the certain business. The value of Australian dollar
has been increasing and decreasing with the US dollar. Hence, the organization was needed to
manage the exchange rate fluctuation issue due to effectively operating the business and
getting higher profitability (Reboredo, et al., 2014).
Background
In the current business scenario, the Australian retail organizations faced many issues by
fluctuations in the Australian dollar exchange rate. Due to high competition in the Australian
retail industry, organization is unable to influence a large number of consumers and retain
them in long-term. Furthermore, demand and needs of customers have direct impact on the
financial performance and market recognition. Australian organization uses different policy
and procedure as compared to a retail organization of another country because each country
has their different policy (Ferraro, et al., 2015).

5
PROPOSAL
Historical Background

6
PROPOSAL
The above graph shows the average value of Woolworths over the years. Although the value
of the company has declined, it has reduced over the years.
Economic Background

7
PROPOSAL
The above graph shows that in the Australian market, the company has maximum market
share. It has the largest share which is more than Coles, its biggest competitors and other
foreign retailers.
Social Background
The above graph shows the social contribution of Woolworths in South Africa. The company
has second biggest market in South Africa after Australia. The graph shows the contribution
of the company in 2009, 2010 and 2011 in South African market. The figures are shown in
South African Rand.
The organization needs to improve their understanding regarding the impact of Australian
dollar exchange rate fluctuation.Consequently, it supports Australian retail organization
tooperate their business in the Australian. The exchange rate attracts the business process of
Australian retail organization and generates the problem to make a unique image in the
marketplace. In the existing period, it is also addressed that the Australian retail organization
faces many problems to effectively run their businessand attain their specified
goal.Hence,Woolworths limited has needed to develop their knowledge about the impact of
Australia exchange rate fluctuation as compared to the US dollar on the retail organization as
it will be effectiveto get higher competitive benefits. Moreover, company canalso be capable
toattract a large number of consumers in less time and cost as it could improve their financial
performance (Chkili and Nguyen, 2014).

8
PROPOSAL
Moreover, a large number of retail organizationshavegained their knowledge about the
Australian exchange rate influence forgetting higher profit. It will also aidan organization to
enhance their awareness about new technologies for effectively deal with Australian
exchange rate fluctuation issues as it will support the employee to meet their specified task
inspecified cost and time.The fluctuation in Australian exchange ratewill also influence the
demand and sale of product and services in the marketplace. Therefore, theorganization will
use marketing strategies to manage with the exchange rate fluctuation and operate their
business effectively (Gyntelberg, et al., 2014). Through this, an organization will be
capableto improve their existing situation of thefirm. Moreover, an organization will also be
able to develop their internal abilities to effectively manage the crisis situation and enhance
the level of competitive benefit. Beside this, it could also be examined that dollar exchange
rate is significant in the business hence many researchers have completed their research study
on the role of dollar exchange rate in business. However, there is lack of research on the
impact of Australian exchange rate fluctuation as compared to the US dollar in the context of
retail organization. Hence, researcher has decided to complete their research on current
research dilemma. Further, it is also found that there are many causes that inspired the
investigator to choose this research problem like thesignificance of the research, resource
availability,and research motivation. It would also enable the investigator to obtain the liable
data in less cost and time. This research studywill help the researcherand reader to enhance
their understanding towards the Australian exchange rate fluctuation as compared to the US
dollar (Chen and Juvenal 2016).
Ethical Consideration
In the research, concept of ethics is associated with the concluded every task of research in a
valid and ethical way by considering the rules and regulation of university and confidentiality
of participants. It supports researcher to conduct suitable behavior for completing their

9
PROPOSAL
research and get avalid outcome. In this dissertation, the researcher will face ethical issues in
thecontext of copyright act’s violation, plagiarism, and manipulation of data (Jayasinghe, and
Tsui2014). These issues will be mitigated by the researcher by using appropriate references
and citation of theactual author. Beside this, for eliminating similarity from the report, a
researcher will use the particular language to evaluate the collected information. In addition,
the researcher will also take aprior appointmentwith the chosen candidates in order to
collectinformation incontext of research dilemma. From this, the researcher will be capable to
pool the actual information from the candidates. It will also facilitate the researcher to keep
the validity and reliability of data. Beside this, a researcher will also make secure the personal
data of participants at the time of research. It will aid the researcher to make arobust
relationship with the candidates (Brahmasrene, et al., 2014).Researcher should focus on some
different factors at the time of conducting their research such as honest, reliable, transparent,
objective, and non-biased as it could be effective to obtain the ethical result.

10
PROPOSAL
Literature Review
In the perspective of Comarda (2017), the fluctuations in the currency rate has a significant
impact on the trade and commerce of an industry. The luxury brands also have a significant
impact as a result of the shifts in the exchange rate. Most of the companies in different sector
utilize the option of shifting production as a response to the fluctuations in the retail industry.
However, the retail or the manufacturing industry is regional; therefore, the volatility in the
currency can have a strong impact on the fashion companies.
The fluctuations in the currency also have a shaping impact on the sourcing decision. It
results in the revision or the abandonment of the trade agreement, maintaining the security
risk, availability of workers, technology transfer, and consumer expectations. All these
factors operate in alignment creating an overall stronger impact on the trade and the industry.
As per the report of Euro Investor (2012), the constantly changing currency rates have a
strong impact on the profits of the organization. The business organizations which have
overseas branches or which trade internationally are influenced by the changes on the
fluctuation in the global currency.
The Euro Investor report of 2012 has also stated if the size of the business organization is
large, then it can have strong impact on the profits and the losses of the company. There are
several risks which are needed to be evaluated when the business are operating at an
international level. However, there are several approaches which can be used to counteract
the currency exposure of the business enterprises. The simplest method, which is popularly
used by the small and medium organizations equally. It is the best method, if the companies
are do not consider that they are at a high risk from the fluctuations in the exchange rate.
Another approach to control the impact of the currency on the business organization is to
hedge against the risk exposure. Derivatives is a common method which can limit the
exposure to the volatility. Although it is a complicated method, it can reduce the impact on

11
PROPOSAL
the risk. The firms can also manage the exposure to the currency by changing their business
practices. The business can also set up clauses to reduce the exposure to the risk.
McKinnon and Schnabl (2014) evaluated that international and domestic investors are
affected by Australian dollar fluctuation. It can indirectly affects the companies in the retail
industry. Speculation related to devaluation can delay in bringing funds to investors in
Australia. But, the assets could be cheaper. Along with this, international and domestic
investors focus that fluctuation in Australian exchange rate represents the increase in the risk
of investment in Australia. Global shareholders are highly persuaded from the fluctuation of
the exchange rate in the Australian dollar as compared to US dollar.
In the view OfIto et al. (2016) worst case for shareholders could be when the worth of
currency of Australia declines as compared to US dollar. It is evaluated that fluctuation of
Australian dollar rate has an impact on different categories of business such as an airlines, a
gold miner, an online business of selling and buying cars “Carsales.com” and a consumer
goods retailer “JB HI-FI”. It has an impact on the business due to Australian dollar
movement.
Similarly, .Mackey and Gass (2015) stated that movement in Australian dollar exchange can
direct impact on the commodity. It is evaluated that Australian dollar deals as a special
currency because it makes movement in the commodities price and shares of commodity-
based companies. The Australian dollar could be dealt in commodity currency. These
commodity currencies are linked to the evolution of mining.
According toTaylor et al. (2015), Australian dollar movement has less or no impact on the
commodity prices. There is four corporation which deals with the currency. It has an impact
on the business as per the classical theory. It is evaluated that JB HI-FI imports awide range
of goods and then sell it as its profit is progressively affected by the stronger Australian dollar
for the inexpensive imported goods. At the same time, the impact of Australian dollar

12
PROPOSAL
fluctuation is addressed by operation of Carsales.com within the country as it has an impact
on the wide range of cars and its imported parts.
In contrast to this, Flick (2015) described that the organization deals in the Asian market and
Latin America which create difficulties to measure the impact of Australian dollar rate
fluctuation. It also relied on the correlation of currency within and between the areas. An
elevated correlation demonstrates the increment in currency exposure. It is discussed that all
three corporation makes effort to decline the currency risk by locking in the rate
overspecified time duration. It illustrates that companies are engaged in forwarding exchange
contracts and derivatives. Australian dollar deals in commodity currency as it is observed that
there is adrastic impact on the organizations in different industries.
It is also evaluated that movement in certain currency has not only impact on the local
economy but also impact on the global economy. Another characteristic is that shareholders
might be engaged to gain benefits from this fluctuation by investing in theoverseas market
and US multinationals. Another characteristic is that movement in thecurrency could be
riskier and has wider for exchange exposure. There is a need to hedging the risk by using
thevarious instrument of hedging. Further, another characteristic which could be addressed
that Australian dollar has been fluctuating more in against to US dollar counterpart from past
few periods. Therefore, Federal Reserve has made thedecision to gain the interest rates
(Vaioleti, 2016).
Aims/Objectives of the Research
The main aim of this research is to evaluate the impact of Australian dollar exchange rate
fluctuations on retail organizations. In the present case, the example of Woolworths is taken.
The following objectives will be used to meet the main aim of research:
Research objectives are mentioned below: