RESEARCH METHODOLOGY

CIA-I

TITLE: RESEARCH PROBLEM IDENTIFICATION

By

KARTHICCK M
REG.NO: 2228324

Under the Guidance of

Dr. BIKAS KUMAR RUP

MBA PROGRAMME
SCHOOL OF BUSINESS MANAGEMENT
CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE
MARCH 2023
A RESEARCH ON A MANAGEMENT PROBLEM IN REATIL SECTOR

ABOUT THE INDUSTRY:

The retail industry in India is one of the fastest-growing industries and is currently valued at
around $950 billion. The industry is expected to continue to grow at a rapid pace, with a
projected value of $1.75 trillion by 2026. The sector is diverse and includes both organised
and unorganised retail.
However, the retail industry in India still faces several challenges. The country's complex
regulatory environment, including various state-level taxes, has made it difficult for retailers
to operate across different states. In addition, infrastructure challenges such as poor logistics
and supply chain management also hinder the industry’s growth. Despite these challenges,
the Indian retail industry is expected to continue to grow rapidly, driven by increasing
consumer demand, rising disposable incomes, and the continued adoption of e-commerce.

Problem - Inefficient inventory management

Background of the problem:

Inefficient inventory management is when a company is not effectively managing its
inventory, resulting in excess inventory, stockouts, or other inventory-related problems. This
problem can arise for various reasons, such as inaccurate demand forecasting, poor supply
chain visibility, lack of coordination between different departments, or inefficient inventory
control practices.
Inefficient inventory management can significantly impact a company's bottom line. Excess
inventory ties up capital increases storage and handling costs and can lead to obsolescence or
spoilage of products. On the other hand, stockouts can result in lost sales, decreased customer
satisfaction, and increased costs due to rush orders or expedited shipping. In industries such
as retail, manufacturing, and distribution, where inventory is a significant cost and a key
driver of customer satisfaction, inefficient inventory management can lead to reduced
profitability, decreased competitiveness, and even business failure.
To address the problem of inefficient inventory management, companies can implement
various strategies and tools, such as inventory optimization techniques, demand forecasting
algorithms, real-time inventory tracking systems, and efficient inventory control processes.
By improving their inventory management practices, companies can improve operational
efficiency, reduce costs, and enhance customer satisfaction.

Management Problem: Inefficient inventory management in a retail company leads to

various chains of problems, starting from more negligible time wastages to affecting the
bottom line of the company, which includes longer lead times, customer dissatisfaction, cash
flow crunch and wastages.
Literature Review: Inventory management is a critical aspect of operations in the retail
industry, as it directly impacts a company's ability to meet customer demand while
maintaining profitability. Inefficient inventory management can result in stockouts,
overstocking, increased costs, and reduced customer satisfaction (Gaviria-Marin et al., 2018).
Traditional inventory management methods, such as periodic review and fixed order quantity,
have been found to be ineffective in addressing the dynamic and uncertain nature of demand
in the retail industry (Zhang et al., 2020). Therefore, there is a need for more sophisticated
inventory management strategies, such as demand forecasting and just-in-time inventory
management.

Research Problem: What is the impact of inefficient inventory management on a retail

company's performance, and how can it be improved through the implementation of demand
forecasting and just-in-time inventory management?

Evidence:
A study by Li et al. (2017) found that inefficient inventory management resulted in stockouts
and overstocking, leading to increased costs and reduced profits in a retail company. Another
study by Gaviria-Marin et al. (2018) found that improving inventory management through the
implementation of demand forecasting and just-in-time inventory management resulted in a
reduction in stockouts and overstocking and increased customer satisfaction in a retail
company.

Research Objectives:
1. To assess the impact of inefficient inventory management on a retail company's
performance.
2. To evaluate the effectiveness of demand forecasting and just-in-time inventory
management in improving inventory management in a retail company.
3. To develop recommendations for improving inventory management in a retail
company through the implementation of demand forecasting and just-in-time
inventory management.

Variables:
Dependent Variable: The dependent variable is the outcome that is affected by the
independent variable, and in this case, it is the inefficiency of inventory management.
Inefficient inventory management can be measured in various ways, such as the amount of
excess inventory, stockouts, order lead time, or inventory turnover.
Independent Variables: There can be several independent variables that contribute to
inefficient inventory management, including:
 1. Demand forecasting accuracy: The accuracy of demand forecasting can affect
inventory levels and lead to either excess inventory or stockouts.
2. Supply chain visibility: Lack of visibility in the supply chain can lead to delays,
increased lead times, and stockouts.
3. Inventory control practices: Inefficient inventory control practices, such as poor cycle
counting, inaccurate record-keeping, or inadequate safety stock levels, can result in
excess inventory or stockouts.
4. Coordination between departments: Poor coordination between departments such as
procurement, production, and sales can result in inventory imbalances and
inefficiencies.
5. Order processing time: The time it takes to process orders can affect lead times,
inventory levels, and customer satisfaction.

HYPOTHESIS:

Null Hypothesis: There is no significant relationship between the implementation of demand

forecasting and just-in-time inventory management and the performance of a retail company.
Alternate Hypothesis: There is a significant relationship between the implementation of
demand forecasting and just-in-time inventory management and the performance of a retail
company.

Budget: The estimated budget for this research project is Rs.75,000. This includes expenses
related to data collection, analysis, and reporting.
Timeline: The timeline for this research project is 12 months. This process involves
observation, conducting interviews, reading journals, collecting data, and analyzing data.

Research Methodology:
The research methodology for this project will involve a case study approach. Data will be
collected through a combination of surveys, interviews, and archival data. The surveys will
be administered to retail company employees to gather information on current inventory
management practices and their perceptions of inventory management. Interviews will be
conducted with key stakeholders, such as supply chain managers and sales managers, to gain
a deeper understanding of the challenges and opportunities related to inventory management.
Archival data, such as sales data and inventory records, will be analyzed to assess the
effectiveness of inventory management strategies. The data collected will be analyzed using
statistical software and qualitative analysis software, and the results will be reported in a
comprehensive report.
Concepts and Terms Related to the Research Problem:
1. Inventory management: Inventory management is the process of efficiently
overseeing the flow of goods into and out of a company's inventory. It involves
tracking inventory levels, controlling stock, and optimizing inventory to meet demand
and minimize costs.
2. Stockouts: Stockouts occur when a company runs out of a particular product, resulting
in lost sales and dissatisfied customers. Stockouts can occur due to inaccurate demand
forecasting, inadequate inventory levels, or supply chain disruptions.
3. Overstocking: Overstocking occurs when a company has excessive inventory levels,
leading to increased carrying costs, reduced profitability, and increased risk of
obsolescence.
4. Demand forecasting: Demand forecasting is the process of estimating future demand
for a product or service based on historical data, trends, and other factors.
5. Just-in-time inventory management: It is a strategy that aims to minimize inventory
levels by synchronizing the arrival of materials with the production process, so that
inventory arrives just in time to be used in production.
Problem - The impact of e-commerce on brick-and-mortar retailers

Background of the problem:

The rise of e-commerce has dramatically changed the retail industry landscape over the past
two decades. With the increasing popularity of online shopping, traditional brick-and-mortar
retailers are facing new challenges that threaten their survival. These challenges include
shifting consumer preferences, intense competition from online retailers, and changing
shopping patterns.
As more consumers turn to online shopping, brick-and-mortar retailers have seen a decline in
foot traffic and sales. In response, many retailers have invested in their online presence, but
they still face significant challenges in competing with pure-play e-commerce retailers, who
often have lower overhead costs and can offer lower prices.
Given the significant impact of e-commerce on traditional retailers, there has been much
debate about how the retail industry will evolve in the future. Some argue that brick-and-
mortar retailers will continue to play an important role, while others believe that e-commerce
will eventually dominate the retail landscape. Understanding the impact of e-commerce on
brick-and-mortar retailers is crucial for retailers, policymakers, and consumers alike.

Management Problem: The impact of e-commerce on brick-and-mortar retailers

Literature Review: The retail industry has undergone significant changes in recent years
with the rise of e-commerce. Many brick-and-mortar retailers face increased competition
from online retailers, leading to declining sales and profits. Studies have shown that the
growth of e-commerce has led to decreased foot traffic and sales for traditional retailers
(Baker, 2019). Additionally, the COVID-19 pandemic has accelerated the shift towards online
shopping, with many consumers prefer shopping from the safety and convenience of their
homes.

Research Problem: How does the rise of e-commerce impact brick-and-mortar retailers in
the retail industry, and what strategies can traditional retailers use to compete effectively with
online retailers?

Evidence:
1. Sales decline: According to the US Census Bureau, sales at brick-and-mortar retailers
in the US declined by 2.3% in 2019, while e-commerce sales increased by 14.9%.
(Source: "Quarterly Retail E-commerce Sales 4th Quarter 2019," US Census Bureau,
March 19, 2020)
2. Store closures: Many brick-and-mortar retailers, including large chains like Sears and
J.C. Penney, have closed hundreds of stores in recent years as more consumers shift to
 online shopping. (Source: "Retail Apocalypse: 23 Big Chains Closing Stores,"
Clark.com, February 24, 2020)
3. Consumer behavior: A survey by PwC found that 56% of US consumers prefer to
shop online, while only 36% prefer to shop in-store. (Source: "Global Consumer
Insights Survey 2020: The Future of Shopping," PwC, 2020)

Research Objectives:
1. To identify the factors that contribute to the success or failure of brick-and-mortar
retailers in adapting to the rise of e-commerce.
2. To investigate the changing consumer behavior and preferences in relation to brick-
and-mortar and e-commerce shopping, and how retailers can respond to these
changes.
3. To explore the implications of e-commerce on the employment and workforce in the
retail industry, and the potential strategies for managing these changes.
4. To provide recommendations and best practices for brick-and-mortar retailers to adapt
to the rise of e-commerce and remain competitive in the changing retail landscape.

Variables:
Dependent variable: The impact of e-commerce on brick-and-mortar retailers.
Independent variables:

1. Sales performance of brick-and-mortar retailers.

2. Sales performance of e-commerce retailers.
3. Consumer behavior and preferences related to shopping.
4. Employment and workforce changes in the retail industry.
5. Geographic and industry-specific factors affecting the retail market.
6. Strategies adopted by brick-and-mortar retailers to adapt to the rise of e-commerce.

HYPOTHESIS:

Null Hypothesis: There is no significant difference in sales between brick-and-mortar

retailers and online retailers.
Alternate Hypothesis: There is a significant difference in sales between brick-and-mortar
retailers and online retailers.

Budget: The estimated budget for this research project is Rs.50,000. This includes expenses
related to data collection, analysis, and reporting.
Timeline: The timeline for this research project is 12 months. This process involves
observation, conducting interviews, reading journals, collecting data, and analyzing data.

Research Methodology:
This project's research methodology will involve qualitative and quantitative data collection
and analysis. Qualitative data will be collected through in-depth interviews with industry
experts and consumers, while quantitative data will be collected through a survey of
consumers. The data collected will be analyzed using statistical software and qualitative
analysis techniques, and the results will be reported in a comprehensive report.

Concepts and Terms Related to the Research Problem:

1. E-commerce: E-commerce, or electronic commerce, refers to the buying and selling
of goods and services online through digital platforms. It includes a variety of
activities such as online shopping, electronic payments, online banking, and online
auctions.
2. Brick-and-mortar retailers: Brick-and-mortar retailers refer to traditional physical
stores where customers can shop for products and services in person. These retailers
operate from a physical location and typically offer customers the opportunity to see,
touch, and try products before making a purchase.
3. Online retailers: Online retailers are businesses that primarily sell products and
services through digital platforms such as websites or mobile applications. These
retailers may also have a physical presence, but their primary mode of sales and
distribution is online.
4. Consumer behavior: Consumer behavior refers to the actions and decisions made by
individuals or households when selecting, purchasing, using, and disposing of goods
and services.
References:
Gaviria-Marin, M., Garcia-Sanchez, A., & Garcia-Melgarejo, B. (2018). Impact of inventory
management on customer satisfaction in the retail industry. Journal of Retailing and
Consumer Services, 44, 256-263. doi:10.1016/j.jretconser.2018.06.006
Berman, B., & Thelen, S. (2019). Omnichannel retailing: The impact of online and offline
experiences. Journal of Retailing, 95(1), 1-17.
Brynjolfsson, E., Hu, Y. J., & Rahman, M. S. (2013). Competing in the age of omnichannel
retailing. MIT Sloan Management Review, 54(4), 23-29.
Chaffey, D., & Ellis-Chadwick, F. (2019). Digital marketing: Strategy, implementation and
practice. Pearson.
Berman, B., & Evans, J. R. (2019). Retail management: A strategic approach (13th ed.).
Pearson.
Corsten, D., & Gruen, T. (2003). Desperately seeking shelf availability: An examination of
the extent, the causes, and the efforts to address retail out-of-stocks. International Journal of
Retail & Distribution Management, 31(11), 605-617.
Goyal, S. K., & Goyal, D. (2017). A review on inventory management control techniques:
ABC-XYZ analysis. International Journal of Engineering and Management Research, 7(3),
63-67.