KOGAN.COM LTD 4Kogan is worth over 510 million dollars. Initially starting out in 2006 selling TVs online,Kogan now stocks a broad range of electronics, fashion and health-linked products. Kogan.comwebsite has about 52 million unique visitors a year and 621,000 of these visitors are convertedinto customers. Kogan’s annual value is expected to hit 241 million dollars in 2017(WebAliveTeam, 2017). The main competitors of Kogan.com include Officeworks, Westfield Shopping Centre,Harvey Norman, JB-Hi-Fi, The Good Guys, and Dick Smith. Other leading competitors includeocado.com, wantitworld.com, oxfamshop.or.au, ebay.com.au and comfortworold.co.uk. Thecompetitors are located in and outside Australia. Kogan.com faces both domestic andinternational competition because it is operates globally. Kogan.com products have several closesubstitutes while the cost of the product relative to ‘average’ income of Kogan.com customers islow. In terms of competitive landscape, Amazon.com Inc continues to take the lead in internetretailing. Amazon.com Inc accounted for a 9.0% value share against its rivals like Kogan.comthat only share a small portion of the market (Internet Retailing in Australia, 2016). The demandcurve facing Kogan.com business is relatively elastic. It is, therefore, a challenge for Kogan.comto ‘mark-up’ its prices above the marginal cost (Yang, Yang & Wong, 2014). 2 Production Costs and Scale Kogan.com faces both fixed and variable cost of production. The firm incurs certain fixedcost albeit lack of real goods being produced. The fixed cost incurred in Kogan.com includerents, direct labor, depreciation, insurance, and administrative overhead. These fixed cost areunlikely to vary much with the quantity of goods sold. The variable cost incurred by Kogan.cominclude some labour costs (staff bonuses, wages, payroll-taxes, entertainment alongside travel)

+13062052269

info@desklib.com

Australian Economy Analysis

Contribute Materials

Related Documents