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THE EXTERNAL ENVIRONMENT AND THE OPERATIONS MANAGEMENT LEVEL OF


LIANA’S CENTRAL MALL

A Business Research
Presented to
The Faculty of Business Administration
Pamantasan ng Lungsod ng Muntinlupa
Muntinlupa City

In Partial Fulfillment
Of the Degree of Bachelor of Science in Business Administration
Major in Operations Management

by

Bute, Jenny D.
Bute, Judith D.
Belgar, Angelica V.
Hular, Jovilyn L.
Landrito, Mary Jane D.
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Transmittal Letter
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INTRODUCTION

Sociologist Ray Oldenburg emphasized the importance of “Third Place” in community life. The
first is a person’s home, the second is a person’s workplace, and the last is the “Third Place” where
socialization and relationship are cultivated. These used to be malls, parks, and churches, but this has long
been deserted since the pandemic. The mall industry’s external environment can provide in detail its
effects on the operational challenges that had caused the rise and fall of shopping malls in the United
States other than its competitive forces.

Political 1970’s the government gave tax incentives to developers to encourage the building of
shopping malls. Establishment of Eisenhower’s Federal-Aid Highway Act, allowing people to drive to
their jobs in the cities while living in a new suburban development. The interstate Highway Act
encourages the construction of highways and developments, in 2000’s, the government was pushing
developers to convert closed malls into public spaces.

Economic in 1970’s Growth of suburban developments caused a rise in shopping malls, in 2000’s
there have been a series of bankruptcies of major retail or anchor shops, including J.C Penney and Brooks
Brother. Gen-Z teenagers (aged 13 to 18) have remarkable $34 billion in annual spending power. The
2008 financial crisis caused deterioration of middle-class income, lowering their retail spending.

Sociocultural 1970’s Car Culture spawned more travelers who treated malls as a pitstop, the
national ethos of the US was the American Dream, meaning, freedom, money, safety and endless
prospects for achievement for many foreigners and Americans alike. 95% of teenagers preferred this
meeting/ hangouts place, Consumer’s choice of public gathering space for entertainment, food and
lifestyle, shop/ for social life. In the 2000’s customers were attracted to malls for the experience
(waterparks, shows, entertainment) rather than on shopping. Consumers had an increased used of social
media platforms (Facebook, Twitter and Instagram) to share photos on consumers in malls.
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Technological 1970’s Popularity of credit cards exploded in the 1970’s, 2000’s the dawn of the
internet Age arrived; There were plenty of technological advancement introduced. (Rachael Williams
2022)

The creation and development of shopping malls is a symptom of the process of spatial
concentration in retail trade in the world. It is formed by numerous factors present in the market
environment of commercial enterprises. Principal conditions influencing the development of shopping
malls include economic, social, legal and technological factors which can be observed both in the micro-
and in the macroenvironment of commercial enterprises. Significant factors impacting their development
comprise economic factors, in particular those which determine the pace of economic growth. A synthetic
indicator of economic growth of macroeconomic character is the GDP (Gross Domestic Product) growth
rate. The analysis of the creation of GDP in different industries and sectors of the national economy
indicates a decreasing share of industry, construction and agriculture, as well as an increasing share of
trade. (R Bointner 2014)

Pest is an acronym for Political, economic, Social, and technological. This analysis is used to
assess these four external factors in relation to your business situation. Basically, a PEST analysis helps
you determine how these factors will affect the performance and activities of your business in the long-
term. Before you jump ahead and start using this analysis you should understand what each of these
factors signifies.

Political here government regulations and legal factors are assessed in terms of their ability to
affect the business environment and trade markets. The main issues addressed in this section include
political stability, tax guidelines, trade regulations, safety regulations and employment laws.

Economic through this factors, businesses examine the economic issues that are bound to have an
impact on the company. This would include factors like inflation, interest rates, economic growth, the
unemployment rate and policies and the business cycle followed in the country

Social with the social factor, a business can analyze the socio-economic environment of its market
via elements like customer demographics, cultural limitations, lifestyle attitude, and education. With
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these, a business can understand how consumer needs are shaped and what brings them to the market for
a purchase.

Technological how technology can either positively or negatively impact the introduction of a
product or service into a market placed is assessed here. These factors include technological
advancements, lifecycle of technologies, the role of the internet, and the spending on technology research
by the government.

Political factors: Government laws, legislations and politics, These factors are often legislative
bills, regulations and laws. You will experience them on a federal and national level. If you expand your
business to several states, you must be aware of the laws in each location, respectively. Consider these:
tax incentives, FDA regulations, Employment laws, Import restrictions, Health and safety laws,
Regulations and Deregulations. Economic factors: Money related forces, will affect monetary funds, sales
revenue and profits its rather straight forward . Consider these: Taxes, Recession and inflation rates.
Social factors: The people, these factors are more unpredictable than economic and political factors,.
Because social factors influence your target market. And people are unpredictable. But every business
needs customers. What and how they buy depend on many different factors. Consider these: location,
lifestyles, family size, ethnic background, health consciousness, culture and sub-cultures. Technological
factors: from distribution chains to social media if you run a tech-related business, the impact differs but
its not-negotiable. Consider these: Wireless, POS system, Cyber security, Online Databases, Debit/Credit
card machines Distributions and Supply chains. (Keisha Frue 2020)

The technological component of PEST analysis focuses on the specific role of technological
advances within the industry. How a company uses its own technology in operations, like automating
certain duties or responsibilities, can help businesses create, shift or prioritize strategies, finances and
processes. Sometimes government research and spending is part of the technological portion of PEST
analysis, too. (Indeed editorial team 2023)
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Problem Statement

This study aims to determine the effect of external environment on the operations of Liana’s
Central Mall as basis for a proposed operational guideline.

Specifically, it seeks answers to the following question

1. How do external environment factors of Liana’s Central Mall describe in terms of?
1.1 Political Factors
1.2 Economic Factors
1.3 Sociocultural Factors and
1.4 Technological Factors
2. What is the operations management level of Liana’s Central Mall in terms of?
2.1 Positioning
2.2 Zoning
2.3 Promotion and marketing
2.4 Facility management
3. Is there a significant relationship between external environment factors and the operations
management level of Liana’s Central Mall Alabang?

Research Objectives

The main objective of this research is to analyze the complex relationship between the external
environment and the ongoing operating difficulties at Liana's Central Mall. We want to do the following
through an extensive assessment:
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 To identify the External Environment factors and the operations management levels of Liana’s
Central Mall.
 To analyze the particular operations management levels of Liana’s Central Mall.
 To determine the significant relationship between external environment factors and the operations
management levels of Liana’s Central Mall.

Hypothesis

To answer the main problem, the researchers will test the following hypothesis at 0.05 level of
significance:

Ho1: There is no significant relationship between external environment factors and the
operations management level of Liana’s Central Mall Alabang.

Assumptions

It is crucial to clearly state the assumptions we are making in our research project, "The external
environment on the operations management levels of Liana’s Central Mall” with the goal to guarantee
accountability and the reliability of our research findings. The study's main presumptions are listed below:

1. There is an effect of each external factors to Liana’s Mall changes in operations management
2. There will be a lot of positive changes in Liana’s Mall operations management with the
strategies made.
3. The mall’s operations management levels and difficulties will be solved through this study.
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Background of the Study

Liana's Central Mall thrived as a soaring symbol of trade, amusement, and economic energy for
years in the midst of a humming city. Its expansive infrastructure formerly enticed shoppers, visitors, and
residents alike with its broad selection of retail establishments, gastronomic pleasures, cinemas, and
attractions. The pulsating energy of city life was best embodied by Liana's Central Mall, whose
resounding hallways spoke to its constant significance. However, an intriguing story of adaptability,
change, and growth that revealed the complicated interaction between outside external variables and the
operational challenges faced by this venerable urban establishment emerged beneath the glowing
appearance of this commerce and amusement behemoth. The story of Liana's Central Mall develops over
the context of an ever-changing outside environment, just like any big storyline. The ups and downs of
economic phases, fluctuating demography, the never-ending pace of advances in technology, the
development of new rivals, and the constantly evolving regulatory environment all play a significant role
in the fate of the mall. The difficulties the mall has had recently have not only put its resiliency to the test
but have also raised important concerns regarding the significant influence of external variables on its
operating difficulties.

The fictional story of Liana's Central Mall is an engaging analysis and an example of the
opportunities and challenges that commercial places face in a constantly evolving urban setting. It
emphasizes how important the outside environment is in determining how these enterprises turn out. This
study aims to significantly advance the areas of managing retail stores, metropolitan business, and
adaption methods through a thorough and in-depth analysis of the ups and downs of Liana's Central Mall.
It serves as both a monument to the tenacity of a single urban landmark and a guide for securing the
survival of others who are going through similar struggles in the always changing urban environment.
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As evidenced by the enormous investment in the retail business, shopping malls have a
significant economic impact on a country. Due to its effects on employment possibilities, national
income, and infrastructure development, shopping malls have a significant socioeconomic impact on local
communities that cannot be ignored. However, as the number of malls in urban areas rises, it is crucial for
retail business owners to comprehend the elements that draw in and maintain loyal customers
(AdeolaIsaiah, G. Adisa I., Moradeyo, A. A., Ibelegbu, O. 2023)

shopping malls around the country have been experiencing difficulty in recent years. People are
spending less time in malls due to changing preferences and new shopping alternatives. Some of the
weaknesses of the malls are market opportunities for downtowns and community business districts.
Consumers are spending less time at traditional shopping malls. A 1994 Roper Starch Worldwide survey
found that only 10 percent of American consumers say they shop at malls very often, down from 16
percent in 1987. Almost a quarter of the people surveyed say they do not go to malls at all, twice the
number of eight years earlier. One third of all adults say they shop at enclosed malls less frequently than
they used to according to a 1994 survey by Maritz Marketing Research Inc. (Mary Edwards, Bill Ryan
2015)

According to Shuaib Azam (2023) Shopping centers are under pressure because of the recent
significant changes in the retail industry. Malls are no longer the only place to shop thanks to the
development of e-commerce. Since consumers have grown accustomed to the ease of internet buying, the
competition has heated up. It's not surprising that malls are dealing with a variety of issues. Shopping
centers must adapt to this ongoing change in the retail environment in order to remain competitive.
Shopping centers may stay competitive and successful in this rapidly changing industry by making
technology investments, providing distinctive experiences, harnessing social media, concentrating on
customer service, and exploiting data.

Arielle Feger (2023) also stated that here are some prospects for expansion notwithstanding the
decline in foot traffic and occupancy rates. Malls may reclaim their relevance with consumers by
adjusting their retail mix and becoming omnichannel experience experts.
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One of the most delicate causes of mall management's failure is a lack of market research and
proactive management. Prior to starting a successful firm, you should concentrate on market research and
proactive management. The market landscape is shifting in today's digital world, making market research
and proactive management essential. Sometimes poor facility management becomes overbearing. This
causes the malls to fail and causes the customers to become distracted (Yadav, S. 2019).

Since the pandemic, there has been a decline in the demand for malls, making it harder for mall
managers and owners to stay relevant. Commercial tenants search for more than just a venue to display
their goods. That might have been the case in the past, but contemporary retailers need locations that can
meet the demands of their customers, who are always changing (Koren, L. 2022). You must ensure that
any enhancements made by your tenants won't negatively affect other customers or tenants. More
significantly, you must make sure that the improvements don't compromise the building's structural
integrity.

According to (Bob Lee and David L. Groves, 2020), one of the most common pastimes in the
past has been shopping. With the growth of online shopping, consumer behavior has altered substantially.
Online purchases have grown dramatically, whereas retail shop purchases have declined. There are
numerous factors contributing to the growth of online sales. Convenience, cost, and selection are the three
most crucial factors. Many malls are seeing a decline in business due to the alteration in shopping habits.
Many of the traditional malls have empty space or are no longer in operation as a result of the slump.

Facility management is also very important for effective mall placement. The setting,
people, technology, and procedure used in the shopping mall are all integrated. Facility
management incorporates all the components necessary to successfully run a mall, including
security, parking, cash management, and housekeeping Commercial tenants may not be as
demanding, but they tend to have “big” personalities. Mall managers have to deal with businesses
wanting to do things their way every day. Commercial tenants are also prone to conflict – for instance, if
one tenant’s operations disrupt another’s (e.g. they’re blasting loud music), there’s sure to be tension
between them. What’s more, many commercial tenants may not agree with your rules and regulations.
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They may, for instance, open their doors for longer than what’s written in the commercial lease
agreement. Instead of ending the day at 8 PM, they might decide to end it at midnight.
As the owner, you have to put your foot down and create policies and procedures that everyone must
follow – no matter what. You must be clear about what commercial tenants can and can’t do, and make
sure your rules are communicated (and recommunicated) to all concerned. (Koren, L. 2023)

According to Waleed Al Toukhi (2022), the efficient operation of mall management is a


challenging endeavor that calls for a variety of abilities and procedures. Dealing with an operation of this
size and with such a narrow margin for mistake is fundamentally challenging. Technology, however, can
also improve the operations management process' coherence and effectiveness. Shopping malls use
cutting-edge technology in a variety of ways, which is crucial to all of them. The management of a mall
works to satisfy mandatory and important technological criteria, such as those for security, power
protection, conservation, and commercial and entertainment goals. They also want to be able to follow
clients and gather information for marketing purposes. No forward-thinking mall management company
can afford to overlook the game-changing potential of implementing such technological advancements
into its operations. Moreover, the numerous complicated requirements that must be met for efficient mall
management are ideal for deploying a software platform. As a result, malls are now putting their best
steps forward to adopt emerging technology to be more competent.

Innovative technology is used in various ways in shopping malls, which is essential in all of
them. The administration of a shopping mall strives to meet essential and obligatory technology
requirements such as safety, power protection, conservation, and entertainment and commercial
objectives. In addition, they would like to be able to track customers and collect data for marketing
purposes.

Government policies have an impact on any retail store's sales and profitability. The economy,
consumer spending patterns, and international trade rules are all impacted by these policies. Regarding
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these modifications, the business can do nothing more than follow them. Every nation is required to
adhere by its political laws. Which things can be imported, exported, and sold in stores is impacted by the
restrictions. Government-proposed health rules must be followed by retailers who sell food. If they don't,
the food will be taken off the shelves and the business may face legal issues as a result (Frue, K. 2018).

Scott Shpak (2019) stated that success in the retail industry requires more than just giving
customers the option to purchase your products. Nearly as much as your product line defines your
business as do your customers themselves. One-on-one, you may have considered your ideal customer,
what she needs, and how she likes to purchase; and while this knowledge helps you focus your brand
identity and market niche, taking into account your clientele on a large scale produces a higher possibility
for success.

The fact that fewer people visit them is one of the most obvious pieces of evidence that retail
malls are dying. Because there are more options for shopping and entertainment than ever before, or just
because people don't think of malls as being as social or enjoyable as they once were, malls may find it
harder and harder to keep their clientele (Valensky, L. 2023).

Many e-retailers have implemented live chats for their online stores because customer service is
one of the reasons a client would prefer to visit a store in person (Johnson, J. 2023). Customers can
communicate with representatives online and ask inquiries about specific products or other issues without
having to meet in person. Customers may readily find answers to common questions on the FAQ sites of
many internet businesses. Customer knowledge systems enable consumers to discover the information
quickly and easily they need.

Due to the shopping mall retailing format's maturity stage, the recent economic crisis, and the
escalating competition from internet merchants, some shopping malls in industrialized countries may be
experiencing decline and low profitability rates. A significant number of shopping malls entered a phase
of decline over the past ten years, raising awareness of the shopping mall problem (Porral, C. C. &
Mangin, J. P. 2019).
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Many physical stores have closed as a result of the growth of online retail in recent years. Mall
traffic is declining, and many shops are finding it difficult to compete with the efficiency and convenience
of online shopping (Gonzales, M. 2022). The development of internet shopping has without a doubt been
the single biggest contributor in the decrease in foot traffic at shopping malls. There is still something to
be said for the personalized touch of brick-and-mortar establishments, even while the convenience and
cost savings of online purchasing may be too much for some customers to refuse.

In recent years, the mall has had to contend with the pandemic and competition from online
retailers. The next ten years will need malls to reinvent themselves if they want to remain relevant. Retail
business owners must provide a seamless omnichannel experience to clients and suit their needs by
having both online and in-store inventories (Moore, K. 2023).

Mall management is defined as an overall operation and maintenance of the entire building
infrastructure, including the services and utilities, ensuring that they are used in a way that are consistent
with the purpose for which it was acquired. Mall management encompasses operation, facility
management, security, accounts, common area maintenance, marketing, leasing and all the other
functions even remotely related to a mall. The components of Mall Management include Positioning,
Zoning, Promotions and Marketing, and facility management.

Positioning is determined after a detailed survey of households in the area where mall is going to
be located. It also refers to the location of the shopping mall which is determined by the access, via road,
good visibility.

Zoning refers to the division of the mall space into various zones for the placement of various
retailers. It allows the smooth movement of shoppers in the mall, avoiding clusters and bottlenecks
attracting buyers of both types.

Promotion and Marketing promotional event that help promote brands are an essential part of
mall management. Advantages of promotion and events are: optimum, utilization of mall space, to create
new source of avenues for mall retailers, to attract new customers and to beat the competition
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Facility management provides specialized services to malls ranging from parking, security, to
housekeeping and cash management. Facility management handles electro mechanical services and
suppression and fire detection, access control, power management, water management plumbing, supply
chain, marketing research and logistics. It broadly includes infrastructure, ambience and traffic
management (Tavleen Kaur 2021)

Synthesis

In summary, the External Environmental factors are determined in our study there must be an impact
in the operations management in all shopping malls, in order for a business to succeed they have to
consider the factors affecting their operations to reduce the risk of the operations of shopping malls.
(Rachael Williams 2020). Shopping centers are under pressure because of the recent significant changes
in the retail industry. Malls are no longer the only place to shop thanks to the development of e-
commerce. Since consumers have grown accustomed to the ease of internet buying, the competition has
heated up. It's not surprising that malls are dealing with a variety of issues. Shopping centers must adapt
to this ongoing change in the retail environment in order to remain competitive (Shuaib Azam 2023).

According to the study as evidenced by the enormous investment in the retail business, shopping
malls have a significant economic impact on a country. Due to its effects on employment possibilities,
national income, and infrastructure development, shopping malls have a significant socioeconomic impact
on local communities that cannot be ignored. However, as the number of malls in urban areas rises, it is
crucial for retail business owners to comprehend the elements that draw in and maintain loyal customers
(AdeolaIsaiah, G. Adisa I., Moradeyo, A. A., Ibelegbu, O. 2023).

A review of the literature the economy, consumer spending patterns, and international trade rules are
all impacted by these policies. Regarding these modifications, the business can do nothing more than
follow them. Every nation is required to adhere by its political laws. Which things can be imported,
exported, and sold in stores is impacted by the restrictions. Government-proposed health rules must be
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followed by retailers who sell food. If they don't, the food will be taken off the shelves and the business
may face legal issues as a result (Frue, K. 2018). The following are the aspects of Liana's Central Mall's
operation that the literature has contributed to the study. It will be advantageous for us to contribute to the
understanding of these elements, and it will tremendously help us to construct new ideas after evaluating
material. It will also be a helpful reference for future researchers.

METHODOLODY

Sampling Design

Respondents and Place of the Study

We will use a mixed-methods research technique that combines the collecting and analysis of
quantitative and qualitative data to accomplish our research goals. Key elements of our approach will
include compiling historical information about the operations, environmental variables, and performance
of Liana's Central Mall in Alabang, Muntinlupa City branch. customer surveys, rental profiles, and
pertinent market studies will all be included in this data. To get their opinions on the difficulties and
modifications facing the mall, we will survey employees and management.

Sampling Technique

The researchers use simple random sampling technique. Employees and management in Liana's
Central Mall will be structured to assure participation. From every employee and management will be
chosen at random in order to learn more about their struggles and experiences. These malls will be
selected on purpose based on how closely their size, demographics, and operational difficulties of Liana's
Central Mall.
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Sampling Size

The goals of the study and the statistical ability needed to find significant patterns and
correlations will be used to establish the sample size for each data source. The goal is to obtain an
adequate and significant sample for each part of the study, while exact sample sizes can differ based on
the data source. The respondents of the study will consist of 30 employees of Liana’s Central Mall. The
respondents will be selected utilizing total sampling population strategy. Wherein, the total population
sampling is a type of purposive sampling where the whole population of interest is studied. It is most
practical when the total population is of manageable size, such as a well-defined subgroup of a larger
population. This technique is the most applicable type for this research.

Research Design

This study will employ descriptive research design which is intended to describe the effect of
external environment on the operations of Liana’s Central Mall as basis for a proposed operational
guidelines. According to Shona McCombes (2020) A descriptive research design are either describing a
situation or phenomenon simply as it stands, or you are describing a relationship between two or more
variables, all without any interference from the researcher.

Research Instrument

In gathering data, the researchers will utilize a survey questionnaire in which the respondents can
select their answers to questions by checking and rating their response. The questionnaire will be divided
into 2 parts: Scale 1 will cover the external environment factors on the operations management level of
Liana’s Central Mall; and Scale 2 will cover the Mall management of Liana’s Central Mall.
The research instrument will be presented to the research adviser for initial checking. For further
validation, the researchers will consult experts in the field of business, statistics, and research who can
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provide comments and possible recommendations. The composition of the questionnaire was drawn out
based on the pilot testing wherein to evaluate the feasibility, time, cost, risk and performance of a
research. This process will conduct on Liana’s Central Mall.

Data Collection

Data Gathering Procedure

After the validation of the instrument, the researchers will secure consent from the Office of the
Research department. Coordination will also be done with the class advisers and subject teachers in order
to schedule a survey. Then, the questionnaire will be produced through printed Sheet to be given to the
respondents and retrieved. The data gathered will be organized, tallied, and be subjected to statistical
analysis.

Scales and Statistical Treatment


Once the survey questionnaire has been completed by the respondents, data were tabulated and
subjected to the following statistical tools:

1. Descriptive Statistics
- Weighted mean and ranking will be used to determine the effect of external
environment on the operational challenges of liana’s central mall as basis for
modified operational guidelines of the respondents.
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2. A test of difference will be used to determine if there is a significant difference on the level of the
effect of external environment on the operational challenges of Liana’s Central Mall as basis for
modified operational guidelines when grouped according to the environmental factors.

Scales
To measure the effect of external environment on the operations of Liana’s Central Mall as basis
for a proposed operational guidelines acquired by the respondents, the following numerical rating,
numerical range, categorical response, verbal interpretation, and verbal description will be used in
describing the effect of external environment on the operations of Liana’s Central Mall:

Numerical Numerical Categorial Verbal Verbal Description


Rating Range Response Interpretation

4 3.26 - 4.00 Strongly Agree Highly Acquired The respondent experienced the
indicator 76-100% of the time.

3 2.51-3.25 Agree Acquired The respondent experienced the


indicator 51-75% of the time.
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2 1.76-2.50 Disagree Less Acquired The respondent experienced the


26-50% of the time.

1 1.00-1.75 Strongly Least Acquired The respondent experienced the


Disagree indicator 1-25% of the time.

Data Analysis

Once the survey questionnaire has been completed by the respondents, data will be tabulated and
subjected to the following methods:
1. A review of quantitative data showed a significant relationship between operational difficulties
and economic considerations. The mall saw a decline in foot traffic and tenant revenue during
recessionary times. According to the data, a 1% drop in GDP growth led to a 0.5% drop in mall sales.
This result highlights how susceptible the mall's operations are to changes in the economy.
2. A Changing consumer tastes, particularly those toward sustainable and experiential purchasing,
caused operational issues, according to a qualitative analysis. Customers expressed a desire for distinctive
mall experiences and environmentally friendly retailers. In response, mall management implemented eco-
friendly activities, which increased consumer satisfaction ratings by 10%. This highlights how crucial it is
to follow consumer trends in order to improve operational success.
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Jo Amy Rollo (2022) Comparative Analysis | Definition & Examples. Retrieved from
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Shrutika Sirisilla (2023) Experimental Research Design — 6 mistakes you should never make. Retrieved
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Feger, A. (2023) 3 challenges facing today’s malls—and how retailers can overcome them. Retrieved from
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA

College of Business Administration

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PAMANTASAN NG LUNGSOD NG MUNTINLUPA

College of Business Administration

TABLE OF CONTENTS

Title Page ………………………………………………………………… I

Transmittal Letter …………………………………………………………………. II

Table of Contents …………………………………………………………………. III

CHAPTER PAGE

1. INTRODUCTION 1

Problem Statement 2

Research Objectives 3

Hypothesis 3

Assumption 4

Background of the Study 4

2. METHODOLOGY 11
PAMANTASAN NG LUNGSOD NG MUNTINLUPA

College of Business Administration

Sampling Design 11

Research Design 12

Data Collection 13

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