Analysis of Factors Responsible for Declining Profits of Coles

This report investigates the factors responsible for the declining profits of Coles in Australia. It identifies key issues such as higher supplier costs, lower prices, ancillary COGS, intense competition, and low sales as contributing factors. The research uses a conceptual framework to illustrate these relationships and develops hypotheses for each factor's impact on Coles' profitability. Furthermore, the report explores strategies to increase profits, including motivating the sales force, strengthening customer relationships, and forming partnerships with other corporations. The research methodology emphasizes an interpretivism philosophy and an inductive approach to gather relevant data and provide insights into improving Coles' financial performance. Desklib provides similar solved assignments and study resources.

Running head: RESEARCH IN BUSINESS
Submitted by
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
Factors responsible for declining
profits of Coles in Australia
Higher Supplier Costs
Lower Prices
Ancillary COGS
Intense Competition
Low Sales
Declining
profit of
Coles in
Australia

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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

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decline because customers decline their purchasing from suppliers. In such case, the company
may not obtain economic benefits of purchasing high amount of goods from suppliers.
In support of this, Bassous (2015) low sales are another factor for declining the profit of the
company. Although, there could be chances to gain sales revenue but, there is no possibility to
gain profit. It can happen when sales of company gain from the maximum selling of low margin
items whereas a company can suffer low sales in case of high margin products. Hence, the
company should track the sales by a margin, distribution channel, territory, and sales rep to spot
trends, which might lead to the issue.
Strategy to increase profits of Coles in Australia
According to Ozyilmaz and Cicek (2015), the company should motivate the sales force to deal
with the customers effectively. Coles should review the compensation method and incentive of
the sales force to ensure they are equivalent to what other corporations in the retail industry pay
their sales forces. It should also focus on providing additional incentives compensation by sales
contents. When a retail industry has been slow-moving then salesforce face struggle to attain
their target hence company should provide an opportunity to earn rewards like cash bonuses and
vacation trips may regenerate them. A more motivated and inspired salesperson will increase
more revenues of the company.
In opposed to this, Fassoulis and Alexopoulos (2015) recommended that company should make
stronger liaison with existing customers. The best way of generating revenue is to sell more to
existing customers and pull the attention of potential customers. One benefit of using this
strategy is that company does not have to spend a large amount to address these customers. The
company should focus on asking with loyal customers about products and considers their needs
in products and services offering. As a result, it will encourage the customers to do additional

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business with customers. For instance, Coles can ask customers to stock organic food products in
their retail stores to make them feel special. The company should interact with the customers in a
positive manner to increase the sales of the company.
In support of this, Omri, Frikha, and Bouraoui (2015) suggested that company should team up
with other corporation to gain profitability. In this way, it should find other corporations that sell
products and services, which are not directly competitive with it. It should also maintain the
relationship with the customers to do business. The company can also form a joint venture where
it can sell products and services to each other. It would be beneficial to earn commission from
trading the products of other company and creates revenue from its own products. The joint
venture could enable the Coles to save their time. It can begin to sell the products and services to
these new customers before their key market players are able to develop liaison with them.
Hypothesis development
Hypothesis 1:
H0: There is no significant relationship between Higher Supplier Costs and profits of Coles in
Australia
H1: There is a significant relationship between Higher Supplier Costs and profits of Coles in
Australia
Hypothesis 2:
H0: There is no significant relationship between Lower Prices and profits of Coles in Australia
H2: There is a significant relationship between Lower Prices and profits of Coles in Australia
Hypothesis 3:
H0: There is no significant relationship between Ancillary COGS and profits of Coles in
Australia

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H3: There is a significant relationship between Ancillary COGS and profits of Coles in Australia
Hypothesis 4:
H0: There is no significant relationship between Intense Competition and profits of Coles in
Australia
H4: There is a significant relationship between Intense Competition and profits of Coles in
Australia
Hypothesis 5:
H0: There is no significant relationship between Low Sales and profits of Coles in Australia
H5: There is a significant relationship between Low Sales and profits of Coles in Australia
RESEARCH METHODOLOGY
Introduction
This research chapter is beneficial to select the appropriate technique for attaining the aim and
objectives of the research. This chapter of research will entail different components like research
philosophies, research design, approaches, strategies as well as data pooling tools. It will also
help to get the appropriate information about the research issue (Bonn, Cronin Jr, and Cho,
2016).
Research Philosophy
A researcher will apply interpretivism research philosophy in this research study because it is
based on subjective nature. This philosophy will be also chosen as it will incorporate truth beliefs
and opinions of participants regarding research concern. It will be also appropriate to collect the
reliable and valid outcome. This research philosophy would be advantageous to collect the
conceptual understanding regarding investigation as it would aid to accomplish the research aim
and objectives (Beevers and Rea, 2016).

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Research Approach
A researcher will use the inductive approach in this research as it would be appropriate to collect
the information regarding the concern of investigation. This research issue relies on subjective
nature hence the inductive approach would be selected by an investigator for accomplishing the
main aim and objectives of the research. This research approach would be also feasible because
it has relevancy with interpretivism research philosophy (Manika, Wells, Gregory-Smith, and
Gentry, 2015).
Research Strategy
The research strategy is beneficial for completing the aim and objectives of investigation in a
predetermined time as well as budget. A researcher will use literature review and survey through
a questionnaire to complete the aim and objectives of the investigation. In such manner, survey
through questionnaire would be effective to gather the information with participants regarding
factors responsible for declining profits of Coles in Australia. Moreover, literature review
strategy would be applied to improve the appropriateness of primary information. A researcher
will use several sources like offline and online sources, textbooks, journal articles, and academic
publication in order to build the awareness with regards to factors responsible for declining
profits of Coles in Australia (Mazidi, Amini, and Latifi, 2014). These sources would be feasible
to improve the validity as well as the reliability of the result of research.
Research design
A researcher will apply mix research design because it incorporates the characteristics of both
quantitative and qualitative research design. In this way, the quantitative research design would
be applied by a researcher to gather the numeric information about RO2 and RO3. It would be
measured via using statistical tools (Bergin, and Jimmieson, 2014). As well as, qualitative

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research design would be applied by a researcher to collect the theoretical data associated with
RO1.
Data Collection Method
Data pooling tool is feasible for collecting the facts and figures associated with research issue.
There are certain sorts of data pooling tools such as primary and secondary data. The primary
data is collected to gather the first-handed with fresh facts and figures by using experiment,
observation, and survey through a questionnaire. Apart from this, secondary data is collected by
textbooks, academic and government publications, online and offline websites and journal
articles. With the perspective of this investigation, both data pooling tools will be applied by an
investigator for obtaining the trustworthy result regarding research issue. In this manner, survey
through questionnaire would be used to collect the primary information and literature review
would be applied to acquire the secondary information (Nguyen, Mai, and Nguyen, 2014). These
sources are beneficial for obtaining the feasible outcome.
Sampling Procedure
A researcher will use probability sampling tool in research to gather the data with fairness. In
this tool, simple random sampling process will be practiced to select the candidates on a random
basis. This process will be chosen as it facilitates the equal probability to target the respondents
to reply in the survey through a questionnaire. In addition, 50 employees of Coles would be
selected as a sample size from the different geographical field of Australia to gather the deep
facts and figures associated with factor responsible for declining profit of Coles in Australia
(Piperopoulos, 2016).
Ethical consideration

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In this research, ethical consideration is related to approach and tool, which should be executed
by a researcher to decrease the chances of ethical concern. The secondary data would be pooled
from different sources like online websites, journal articles, academic publication, and textbooks.
These sources would be applied by a researcher in terms of referencing and in-text. It is cited
cautiously in order to eliminate the plagiarism issue. This investigation will be written in precise
words by considering proper in-text in each section (Yadav, and Dabhade, 2014). An investigator
will keep the secrecy and privacy of data of employees during the research that would be
effective to overcome the ethical issues from the research.
Research limitation
There could be certain limitation faced by a research scholar in the research. These limitations
could be time, resource and costs to collect the facts and figures associated with research
concern. Moreover, a researcher will deal with another problem when reviewing the journal
articles such as an investigator would be restricted to use valid as well as reliable information.
These limitations would have an impact on the validity as well as the reliability of research
(Beirne and Ramsay, 2018).
ORGANIZATIONAL STRUCTURE OF STUDY
Organizational structure would be appropriate to attain the aim and objectives of investigation in
a chronological way. The following structure would be applied for completing the investigation
in a systematic manner:
Introduction
It will be primary research chapter where the investigator will explain the problem statement,
aim and objectives of investigation and research question. This chapter would be executed to
generate meaningful foundation and depth understanding with regards to research concern. This