Kogan Australia Pty Ltd Assignment
Added on 2020-02-24
19 Pages4538 Words75 Views
Business DevelopmentEnvironmental ScienceEconomicsPolitical ScienceLaw
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Running head: KOGAN.COM LTD 1Kogan.Com LtdName Institution
KOGAN.COM LTD 2KOGAN.COM LTD1) Introduction to the Business and General Business EnvironmentKogan.com Ltd. is the company selected for this discussion. It is an Australian premieronline shopping Company. Corporate information:139 Gladstone Street, South Melbourne,VIC 3205, AustraliaWebsite: www.kogancorporate.com. Kogan.com is Australian the largest online-retailer in Australia. Kogan.com prides itselfon selling the best commodities at the market amazing prices. The company was initiated in theyear 2006 by Ruslan Kogan (a young entrepreneur). It was subsequently established by RuslanKogan his parents’ garage. The company started with LCD-TVs. The TVs were shipped directlyfrom manufacturers to clienteles. This process gave rise to a revolutionary business model.Kogan.com sidestepped unnecessary costs by eliminating middlemen. The Company passes onthe savings from these costs to customers through cheap prices. Kogan.com offers amazing deals on TVs, homewares, fashion, outdoor, fitness, tech andmany more as illustrated in figure 1 below. It is famous for its inspiring array of electronics liketablets, televisions alongside phones. However, Kogan.com has an ever-increasing array ofcommodities. These products are classified as Kitchen, Home, Gardening, Lighting, Fitness, andmany more products. Over the past few years. Kogan.com has grown at an astounding pace. Thishas allowed the company to provide more astounding commodities. It has also been able to reach
KOGAN.COM LTD 3clienteles globally. Kogan.com has delivered more than three-million products globally. It ishighly devoted to its mission which has ever remained stronger than before. Figure1: Kogan.com productsPhoto from: https://www.webalive.com.au/future-of-australian-ecommerce/The majority of customers served by Kogan. Com include businesses, governmentdepartment, young girls, older men, women and men. The company offers all what the customerswant without focusing on specific target. It is purely online retail business and hence mostlyserve online clients. The customers only need to click around the Kogan.com website to find andascertain all products they need and want. Once the customers have ascertained the products theyneed and want to buy, the immediately order. Kogan.com will subsequently deliver the orderedproducts using either fast dispatch or free shipping delivery options according the customerchoice.
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)
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