Case Study: Evaluating Kogan.com's Business Environment and Strategies

This case study provides a detailed analysis of Kogan.com, an Australian online retail and services business. It begins with an overview of Kogan.com's business environment using Porter's Five Forces model, assessing the threats of substitutes, competitors, and entry, along with the bargaining power of buyers and suppliers. A SWOT analysis highlights the company's strengths, such as customer fulfillment and a skilled workforce, and weaknesses, including higher attrition rates and limited R&D investment. Opportunities include adapting to new technologies and government policies, while threats include economic isolationism and competitor's technological advancements. The study then explores Kogan.com's business model, emphasizing cost-cutting measures, community engagement, information gathering, and technology adoption. It concludes by discussing factors that contribute to Kogan.com's success, such as community building, targeted marketing, and customer benefits, and suggests strategies for sustaining and improving its business, including feedback mechanisms and inventory management. The case study references Kogan's annual reports and other sources to support its findings.

Running Head: CASE STUDY 1
ASSESSMENT 1: CASE STUDY

Case Study 2
Contents
ASSESSMENT 1: CASE STUDY.................................................................................................................1
Question.1.............................................................................................................................................3
The current business environment of Kogan.com is defined by Porter five forces model:...............3
Threat of substitute-......................................................................................................................3
Threat of competitors-...................................................................................................................3
Bargaining power of buyers-..........................................................................................................3
Bargaining power of suppliers-......................................................................................................3
Threat of entry-.............................................................................................................................3
Kogan.com’ SWOT analysis:...............................................................................................................4
Strengths of Kogan.com Ltd...........................................................................................................4
Kogan.com’s weaknesses..............................................................................................................4
Opportunities for Kogan.com Ltd..................................................................................................5
Threats for Kogan.com..................................................................................................................5
Question.2.............................................................................................................................................6
Cutting costs-.....................................................................................................................................6
Involving communities through social media-...................................................................................6
Information gathering-......................................................................................................................7
Adapting new technologies-..............................................................................................................7
Question.3.............................................................................................................................................7
It has built a community-...................................................................................................................7
It follows targeted marketing-...........................................................................................................8
A/B Testing-.......................................................................................................................................8
Customer’s benefits-.........................................................................................................................8
Question.4.............................................................................................................................................8
REFERENCES........................................................................................................................................10

Case Study 3
Question.1
Kogan.com is a retail and services business which is a pure –play online retail website. The
various business of Kogan is Kogan Marketplace, Kogan Mobile, Kogan Insurance and
Kogan Travel. The company was founded in 2006 by Ruslan Kogan headquartered in
Australia (Kogan, About us, 2017).
The current business environment of Kogan.com is defined by Porter five forces model:
It consists of the few factors which need to be taken into consideration:
Threat of substitute-
The new product segments of other companies can create trouble for Kogan.com as it
might give wide range of products to the customers. But the treat for Kogan.com is
low as it has already launched many product areas.
Threat of competitors-
This is a worried factor for the company as other giants have created a huge level of
competition for the cited organization.
Bargaining power of buyers-
Due to the availability of substitute and other retail services the bargaining power of
customers is very high.Therefore,Kogan.com have to keep the price low and
reasonable in accordance to the market costs so that the customers remain intact.
Bargaining power of suppliers-
Kogan.com is at low threat here even if the competition is high. As the company has
maintained a healthy relationship with the local distributors and supplier to get the
product at a low cost.
Threat of entry-
The entry barriers are also very low in retail industry, but Kogan.com need not to
worry as to reach up to their market share or brad valve other start up organization has
to put extra efforts. So in near future the threat of entry is next to impossible in case of
Kogan.com (Michaux, 2015).

Case Study 4
Thus with the help of above analysis it could be stated that industry related business
environment is in favour of cited organization.
Kogan.com’ SWOT analysis:
Strengths of Kogan.com Ltd
Kogan.com has a large number of strengths and this is the only reason why it is one of the
best firms in the market. Some of the strengths of Kogan.com Ltd are:
 High level of customer fulfilment-The main strength of this company is the
relationship it maintains with the customers. It has gained a high level of customer
satisfaction. It also maintains good brand fairness among the customers.
 Highly proficient labour pool- Kogan.com provides training and learning programs
for its employees and hence has a skilled workforce.
 A good record of success of the new products and the innovated products.
 A good quality is maintained by kogan.com and it scales the production according to
the conditions in the market through automation of activities.
 Kogan.com has created an active distribution chain and hence majority of its products
reached the market.
 Along with this, the company has a strong network of suppliers of raw material as the
result the company has best supply chain management system (Sarsby, 2016).
Kogan.com’s weaknesses
These are the areas where Kogan.Com can improve upon. Few of the weaknesses are:
 Kogan.com has higher abrasion rates as compared to other companies. Hence, the
company have to keep investing in the training and learning programs.
 There is little scope for expansion of the current business models as the structure of
organisation is in respect to these models.
 The inventory is huge as compared to the other companies and this makes more
investment in the inventory resulting in wastage of capital.
 When there were new entrants in the market the company was not able to handle these
challenges and it lost many market shares. This will displace the long-term growth of
the company.

Case Study 5
 The company’s investment in research and development is still not good when
compared to the competitors with respect to the innovation.
 The amount of investment in technology is very less. The adaptation of new
technology is very difficult because of less investment.
 The marketing promotions are not up to the mark. Although the sales of products
good but the unique selling proportions of the company is not defined. As a result, the
competitors can easily attack on these portions (Kogan, Anuual report 2016, 2016).
Opportunities for Kogan.com Ltd
The company keeps influencing and adapting new opportunities to maintain its customer’s
satisfaction. Few more opportunities are:
 The new environmental policies are a great opportunity for Kogan.com to adapt new
technologies and hence capture market share in the new products category.
 The low expansion rates let customers of Kogan.Com to get credit at low interest
rates.
 The online portal has increased the sales and the future scope of the portal is to
include big data in it.
 The constant cash flow from the bank lets the company to invest in new product areas
and in new technologies.
 The government free trade agreement has let Kogan.com to make a place in new
emerging market.
 The new product segment provides Kogan.com to differentiate its price strategy. With
this opportunity, the company can give additional benefits to its old customers and
can attract new customers by new policies.
 The company’s core capability can be in other product fields as well and hence the
company should keep finding new products (Kogan, Annual report 2017, 2017).
Threats for Kogan.com
 The trend of isolationism in the government’s economy can influence the
international sales in a negative way.
 The new environment regulations can be a threat to the product categories which
already exists.

Case Study 6
 The rising pay levels and increasing prices in the other countries will pressurise the
profitability of the company.
 The changed behaviour of customers and using online channels rather than physical
infrastructure can be a threat to the existing supply chain model.
 The adaptation of new technologies by the competitors can be a threat to the
company’s products.
 The less number of skilled workforce in few global markets is a threat to the profits of
the company.
 The supply of new products is irregular and hence it is a threat as the competitors can
take advantage of this thing and can launch the same product with good sales.
 The local distributors are the biggest threat to the company as the competitors pay
higher margins to these local distributors and get an advantage (Kogan, FY17 Result
Presentation, 2017).
Question.2
Kogan have created a business model whose base of gaining strength is by online trading and
hence creating a new experience for consumers. The business model of Kogan.com targets to
create strong online communities, keep ahead of technology trends, implementing e-business
cost-cutting policies and using advertising methods. These business models cuts out the
middle men’s and deals directly with the customers. The core components of the following
business models are the customers, suppliers and the competitors. Few other components are,
Cutting costs-
Kogan’s business models cuts the costs so that the customers can avail maximum
benefits. The cutting of costs is done at packaging and by providing paperless
information. It also runs a paperless office and therefore is able to provide low cost
products.
Involving communities through social media-
There are special widgets on the website of Kogan so that the customers easily link
their social media accounts. By this policy, the company is able to advertise it socially
and hence a large number of customers get attracted. Kogan has used social media as
a way to gain trust of the customers.

Case Study 7
Information gathering-
Customers can easily gather the product information on just one click. This makes
easy for the customers to research all the retailers and the brands and find the best
products. Kogan also keeps a check that what actually the consumers are searching
and then they use this information for their marketing. By this they can easily find out
what the customer wants.
Adapting new technologies-
Kogan takes care that it keeps up with the new technologies and keeps an update of
the latest customer trends. The business models of Kogan keep introducing new
features to attract the customers. It also has a notification feature which tells the
customer that there product is located to a nearby location and the expected time in
which they will get the product. It also keeps a check of the product which is the most
popular.
These business models create good value for all its customers as they get many advantages.
At each point, Kogan’s business models provide profits to the customers. Consumers have to
pay less as there is cost-cutting business model and they get all the information they need at
one place. If the profit is more the company gets benefitted as a result the business partners
also gets the benefits. The local distributors, the suppliers everyone gets a huge amount of
business with the help of these business models. With the help of these business models,
Kogan has captured a big market and gained reputation along with this it has made profits
(Braithwaite, 2015).
According to the annual reports of Kogan, it can be concluded easily that the business models
adapted by Kogan are applicable in real-life. These business models have been strength for
the company. It has attracted a large number of customers and has taken up the retail services
market with the use of internet.
Question.3
Kogan.com will ultimately succeed as the company has taken over the market and is growing
day by day. The various factors according to which Kogan.com will succeed are:
It has built a community-

Case Study 8
Kogan.com has made a community of its customers and business partners. As it
follows a concept which says that the old customers should remain. This community
has gained a huge market for Kogan.com.
It follows targeted marketing-
Kogan.com targets marketing services like Google AdWords and gets to know the
strategies. They monitor what people are searching and according to that they change
their business models.
A/B Testing-
Kogan.com has hundreds of AB tests which run continuously. With this Kogan.com
tests many number of variations of a page and can see how the customers will react to
it.
Customer’s benefits-
The most important thing for Kogan is to benefit their customers. They provide low
cost to the customers and also provide them with many advantages and hence gain
their trust (Mason, 2017).
Question.4
For sustaining and improving the business of kogan.com it can implement the following
things,
 Kogan.com should build internal feedback mechanism directly form sales team to
handle the challenges of new entrants.
 A proper management of the inventory should be implemented.
 Promotion of new products should be more and should be balanced with the old
products.
 The sales should not be irregular; all the products should have equal sales (Kogan R. ,
2013).

Case Study 9

Case Study 10
REFERENCES
Bishop, J 2010, Ruslan Kogan: Young, Rich and Growing Two Businesses Fast, viewed
on 3 January 2018, <
http://www.dynamicbusiness.com.au/entrepreneur-profile/ruslan-kogan-technologies-
dynamic-business-01.html>.
Braithwaite, A. & Christopher, M 2015, Using operations to build successful business
models for competitive disruption, viewed on 4 January 2018,<
https://www.koganpage.com/article/using-operations-to-build-successful-business-
models-for-competitive-disruption#>.
Kogan 2016, Annual Report 2016, viewed on 3 January 2018, <
https://www.kogancorporate.com/resources/pdf/Kogan%20Annual%20Report
%202016.pdf >.
Kogan Corporate 2017, Annual Report 2017, viewed on 3 January 2018, <
https://www.kogancorporate.com/document/73c43b2fa1cd4706851051ddaaced964/
KOG0004%20AR17_PFO_web.pdf>.
Kogan, R 2013, Ruslan Kogan: Online Retail’s Success is About Much more Than Just
Decent Websites, viewed on 3 January 2018, <
HTTPS://WWW.BUSINESSINSIDER.COM.AU/RUSLAN-KOGAN-ONLINE-
RETAILS-SUCCESS-IS-ABOUT-MUCH-MORE-THAN-JUST-DECENT-
WEBSITES-2013-11>.
Kogan Corporate 2017, FY17 Result Presentation, viewed on 3 January 2018, <
https://www.kogancorporate.com/resources/pdf/KGN_Kogan.com_FY17_Results_Pr
esentation.pdf>.
Kogan 2017, About Us, viewed on 3 January 2018, <
HTTPS://WWW.KOGAN.COM/AU/ABOUT/>.
Kogan 2017, Department Menu, viewed on 4 January 2018, <
HTTPS://WWW.KOGAN.COM/AU/KOGANMOBILE/?REF=DEPARTMENT-
MENU>.

Case Study 11
Kogan 2017, Brands, viewed on 4 January 2018, <
HTTPS://WWW.KOGAN.COM/AU/SHOP/BRANDS/?REF=HEADER-LINK>.
Mason, R. & Evans, B 2017, Customer Value: How to deliver it, viewed on 3 January
2018, < https://www.koganpage.com/article/customer-value-how-to-deliver-it>.
Michaux, S., Cadiat, A. & Probert, C. 2015, Porter's five forces, Belgium: 50Minutes.
Sarsby, A. 2016, SWOT Analysis, England: Leadership Library.