Porter Five Forces on Kogan.com Ltd

This article provides an analysis of Porter Five Forces on Kogan.com Ltd, a leading retail company in Australia. It discusses the threats from new entrants, bargaining power of suppliers and buyers, threats from substitute products, and rivalry among competitors. It also includes a SWOT analysis and recommendations for Kogan.com Ltd.

Running head: COMPUTER INFORMATION SYSTEM
COMPUTER INFORMATION SYSTEM
Name of the Student
Name of the University
Author Note

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Table of Contents
Porter Fiver Forces on Kogan.com Ltd..................................................................................................2
Threats from new entrants:................................................................................................................2
Bargaining power of the suppliers:....................................................................................................2
Threats from substitute products:.......................................................................................................3
Rivalry among the existing competitors............................................................................................3
Bargaining power of buyers...............................................................................................................3
SWOT analysis of Kogan.com Ltd........................................................................................................4
Internal strategic factors....................................................................................................................4
External strategies factors for Kogan.Com Ltd..................................................................................5
Core components of Kogan.com Ltd.....................................................................................................5
Success of Kogan.com Ltd....................................................................................................................6
Recommendation for Kogan.com Ltd....................................................................................................7
Bibliography..........................................................................................................................................8

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Porter Fiver Forces on Kogan.com Ltd
Kogan.com Ltd. is one of the important retailing sector in Australia. With the passing
years the organization has d3fined new strategies for better business in the retailing sector. The
organization operates with it’s headquarter in Melbourne, Australia. This offers the best leading
brands with proper prices and also the products are available in a wide range. Porter Five forces are
important to understand the strategy implemented by the organization in order to earn benefits. The
five forces includes threat from new entrants, rivalry between the existing organizations, threat from
substitute products, bargaining power of buyers and bargaining power of the suppliers. This five
forces are described in order to understand the industry rivalry. Thus in order to understand the
analysis of the retailing industry, Porter five forces are implemented within the Kogan.com.
Threats from new entrants:
With the innovation in technology the organization faces several challenge that are needed to
be understood properly. Entrants within the retailing sector creates immense pressure on Kogan.com
Ltd. The new entrants has developed strategies and started selling products with low pricing, adding
new values towards the customer’s proposition. Thus it becomes important for the organization to
develop proper management strategies that will help in overcoming this barriers effectively and will
also safeguard the competitive edge. In order to tackle the threats from new entrants it becomes
necessary to understand the customer requirements and develop product accordingly. By improving
the economies the cost per unit can be lowered. With defining the standards regularly the new entrants
will avoid to enter such market.
Bargaining power of the suppliers:
There are several suppliers available in the market that produces different price for same item.
Different retailer orders item from different suppliers. With a dominant supplier in the market the
Kogan.com Ltd will address a decrease in the earn percentage in market. Suppliers in dominant
position uses the negotiation power in order to have higher prices from the fields in the retailing field.

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With a good power of suppliers the profit margin of the Kogan.com Ltd will reduce. In order to
overcome this problem the organization needs to develop an efficient supply chain with multiple
suppliers at a time. The company should be able to implement new designs in order to cope up with
the market in case price of any raw material goes high the company can use another material
according to their need. Apart from this the organization should rely on such supplier who completely
depends on this firm for their main business. This will help in improving and managing the business
with proper margins.
Threats from substitute products:
Whenever a new product gets launched in the market, the customer tends to move towards the
company who will provide maximum features. However it becomes very difficult to change product
according to the newly launched item. Kogan.Com Ltd needs to add value proposition that will vary
from other products and will offer the customer with reliable solution. In order to overcome such
situation, it is important for Kogan.Com Ltd to work with the aim of providing a service oriented
approach rather than a product oriented. The organization can further increase the switching cost for
their customers.
Rivalry among the existing competitors
Kogan.Com Ltd is a retail industry that operates its function in a very competitive market and
there are many competitor to this retail business. With the intense situation among the competitors of
retail market, the prices will reduce and this will lead to decrease in profitability of the industry. In
order to overcome such situation it is important for the organization to build a sustainable
differentiation. Developing a proper scale will help the organization to compete better. Another
solution that will help in the growth of the retail market is to collaborating with competitors instead of
competing with each other.
Bargaining power of buyers
Every customer associated with each organization is seen to be demanding. Customer’s main
demand is to have the best deals with minimum price. This is a matter of pressure for Kogan.Com Ltd

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and effects the profitability. With the smaller and powerful customer base, the chances of bargaining
power of customer increase and this will create a situation where the organization Kogan.Com Ltd has
to offer maximum discounts. The way this problem can be tackled by Kogan.Com Ltd is by building a
large customer base. This will help in reducing the bargaining power of buyers and will also provide a
streamline process for sales. With the launch of new products, customers will get attracted and will
draw huge profit margin.
SWOT analysis of Kogan.com Ltd
Internal strategic factors
Kogan.Com Ltd is among the leading industry in the market and possess great strengths that helps
in succeed among the retail market. With this strength the share in market is being protected and also
the share from existing markets are saved. In addition to this, it helps in penetrating new markets. The
basic strengths of Kogan.Com Ltd are as follows:
 The organization is having highest skilled workforce and the knowledge is flourished with
frequent learning programs and training. Kogan.Com Ltd focuses on development of each
employee’s knowledge by investing resources on their training and development program.
This develops the workforce quality and also motivates them to achieve more n future.
 New products are developed frequently that add towards the market value.
 Having reliable suppliers with strong base and that provides better raw materials
 Services provided towards the customers has increased over years that ensure high customer
satisfaction.
Weakness:
This are the areas where the organization Kogan.Com Ltd has the chance to improve. It
becomes important for the organization to work upon the weakness and gain proper advantage. The
main weakness of the Kogan.Com Ltd industry are:

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 The organization structure is capable with the current products and thus it will become
difficult to enhance the segments.
 The organization fails to tackle the challenges faced by the new entreats and has lost the
market share to niche categories.
 More investments are needed in developing new technologies.
External strategies factors for Kogan.Com Ltd
Opportunities
 With the implementation of online trend, the number of customers has increased over years.
 Provides a lower inflation rate that helps in bringing more stability within the market.
 With the agreement made for new products with the government, the market edges had
improved a lot.
 New technology provides better opportunity towards the Kogan.Com Ltd and creates better
strategy within the market.
 With the implementation of new environmental policies the Kogan.Com Ltd has gained a
great advantage in the share market.
Threats
 With the change in being behaviour of the customer it becomes difficult to understand their
choice.
 The launch of new environment regulations under the Paris agreement can be a reason for
certain existing products.
 Shortage of some skills workers within the global market can lead to affect the profit growths.
 Irregular supplies o innovative products over years can develop numerous problems for the
Kogan.Com Ltd.
Core components of Kogan.com Ltd
Core components are important to provide a better competitive advantage towards the
organization in the market. The main components are proper selection of price for each product,

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availability of the product, providing proper convenience towards the customer, using proper
information while manufacturing, reliability, proper customer service. This are the key components
that are important for Kogan.Com Ltd business model. Apart from this it is equally important for
Kogan.Com Ltd to fulfil the need of customers quickly, providing the customer with ease of use ad
adapting with the change in market. This all components needs to be fulfilled in order to have a proper
market advantage. Kogan.Com Ltd is among the top retail industry in the market and many other
industry follows the model of Kogan.Com Ltd. The model helps to define new competitive advantage
and also supports the organization to gain huge profits. Kogan.Com Ltd provides a wide range of
value towards their customer and value each customer. They work for providing better products
towards there customer. Several awards are won by this organization. Kogan.Com Ltd adds value to
the customer lives by improving the way of living. Apart from electronics and day to day use products
the organization aims at providing insurance related to health, related to pet and life. With better vale
for the customer the organization has gained a huge profit in the market. The company believes in
maintaining a dedicated customer relationship management at each department and has the ability to
provide a high level customer satisfaction. Apart from providing good quality products with best
brands the organization offers proper services whenever the organization faces a problem.
Success of Kogan.com Ltd.
The organization will definitely gain success due to many reasons. The organisation focuses
not only on the products but also on the services provided by the organization towards their
customers. The organization is having the highest number of skilled employees that will lead the
organization in path of success. The organisation has a great performance rate in the market and also
develops new innovative offers in the market. This will help in the success of business. According to
the records it can be observed that new products developed and launched by the organization has
gained a huge success rate in the market. With the automation in products the quality of products
developed has increases and also helps the market to scale there demand. The organization believes in
dealing with reliable suppliers for raw materials. This helps in providing a strong base of reliable
suppliers and also enable the company to overcome all the supply chain. The main achievement of the

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organization is having a high level customer satisfaction. With a better customer satisfaction level the
company can build a dedicated customer relationship. Providing good brand with better price attracts
more customers and satisfies a huge amount of people. This all the features will help the organization
to gain success in the market. Moreover with a stable cash flow the company can invest on new
technologies that will help in development of new products. With varied products the organization
will gain a great success in the competitive market. Moreover the government agreements has opened
new market for the organization. This includes adoption of new technology with the standards set by
government. This agreements has provided an opportunity to enter into a completely new market and
gain success over there.
Recommendation for Kogan.com Ltd
In order to achieve proper profits among the market the organization Kogan.com Ltd can use
Porter five forces for analysing the impact of other components. This will help in exploring the facts
and will help in identifying the changes in trends and will gain the opportunity to change according to
the market trend. Proper monitoring on the demand of customer is needed to be done frequently this
will help in providing better future towards the customer and will satisfy there needs. Understanding
the market trend becomes important in order to have a proper control over the market. With the
implementation of porter five force Kogan.com Ltd will be able to determine changes within time.
The organization should develop product based on the needs of the customer. Customers are attracted
by offers, so it is equally important to provide offers on events. Moreover it becomes important to
supply innovative product with time and should follow the regulations generated by agreement. It is
important to work according to the feedbacks obtained by the customer and should always praise each
employee work. The main focus of the organization should be on innovation of new technologies and
improving the customer satisfaction. The organisation should expand its competitive advantage in
such a way that it gets fit into new business model. Each employee should be responsible enough and
should take the initiative to learn new things while working within the organization, as it is observed
that Kogan.com Ltd attrition rate in workforce is very high as compared to other organization. Thus

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the organization should focus and hire only the skilled employees. This will minimize the attrition rate
as there will be no need of wasting time on training the employees.
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