Entrepreneurship Innovation Business Clusters Essay

1.What Is The Conceptual Understanding Of The Factors Responsible For Declining Profits Of Coles In Australia?

2.Which Factors Are Responsible For Declining Profits Of Coles In Australia?

3.How Coles Can Increase The Profits Of The Business In Australia?



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

Justification and potential output of the 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 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

(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 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 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 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

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

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).

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 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

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:

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 primary chapter will also provide the deep knowledge regarding the project scope. Consequently, this chapter would be vital for a researcher to get the appropriate path for conducting research. It also evaluates the research concern in a feasible way (Blasi, Freeman, and Kruse, 2016).

This is second chapter of research that facilitates the review of literature in order to identify the research concern. This chapter incorporates conceptual framework to attain the aim and objectives of the research. A researcher would be capable to assess the previous information about factors responsible for declining profits of the company by using this chapter. As well as, many secondary sources will be applied for collecting the data regarding research concern. These sources would be It is third chapter of research that assesses different methodology, strategies, and techniques for completing the research in an organized manner. Along with this, different components have been entailed to attain the investigation. These components will be sampling, strategy, philosophies, approaches, and data gathering tools. Under this chapter, the selected methodology will be justified by a researcher to make sure the reliability of research (Beirne and Ramsay, 2018).

It is fourth chapter of investigation that assesses the gathered data through several tables and charts. It will facilitate an appropriate method to the researcher to categories the collected information and assess the data with regards to each objective. This part of the research will aid the researcher to assess the information in a logical way by executing the appropriate data assessment technique. A researcher can be proficient to collect the data in a methodological manner and get the appropriate result (Nguyen, Mai, and Nguyen, 2014).

It is the fifth chapter of research in which investigator interpreted the assessed information and support it with literature review. This interpretation would be based on each objective to complete the research in an appropriate way. This chapter would be beneficial to identify the investigation concern in a significant way (Beirne and Ramsay, 2018).

This is the last chapter in which researcher would be proficient to summaries the whole research as per data assessment. It would be effective to interpret the relationship between research objective and findings. It also aids to prove the hypothesis by evidence of research (Nguyen, Mai, and Nguyen, 2014).

Time plan and Budget

Project budget

The budget for obtaining this investigation would be approximately $1300 for accomplishing the aim and objectives in the predetermined time period. The given below element would be included in the budget of the project:

  • For collecting the facts and figures via literature review, many secondary sources would be requisite by an investigator like an academic journal, editorial, textbook, online resources. It cannot be accessed without paying the fund as there is a requirement of about $300 to purchase the material (Yadav, and Dabhade, 2014).
  • Data gathering is prominent resources to detain the information regarding research concern. Therefore, an investigator would be requisite $450 to obtain the survey through a questionnaire on workforces. Since, it would be prominent to gather the information regarding factors responsible for declining profit of Coles in Australia (Nguyen, Mai, and Nguyen, 2014).
  • For developing the table, charts, and graphs associated with research concern, an investigator would be requisite about $550.

In summary,

Table 1: Budget for accomplishing the project

(See: Exhibit 1)

Time plan

Table 2: Time plan for accomplishing the project (Gantt chart)

(See: Exhibit 2).

From the above timetable, it could be evaluated that gathering information via secondary and primary sources will take more time duration as compared to performing other practices.


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