Overview of the business of Kogan
The aim of the following report is to make an in-depth evaluation of the business model, revenue model and business strategies of an online business organization. The objective will be therefore to identify analyze the main features of a chosen online business organization and thereafter identify the negative as well as positive aspects of the organization. The chief concentration will be on to understand whether the website design and business model of the chosen organization are efficient enough in making convenient users’ interactions and creating trust and loyalty or not. Based on that identification and evaluation, the present report will design an E-commerce implementation strategy for the considered organization. For the afore-mentioned aim of the following report, the Australian online department store – Kogan.com has been selected.
The Kogan.com is known to be the one of the largest online departmental stores in Australia that currently sells more than ten thousand products online their online “direct-to-customer” stores. It has been found out that the company has acquired huge success within a short span of time. The considered e-commerce enterprise is a public company that has been founded by Ruslan Kogan in the year 2006 and serves for territories like Australia, New Zealand and the United States of America (kogan.com 2017). Currently, Kogan.com is known for competing on the domestic market on the basis of price through selling varied home appliances, electronic goods as well as groceries directly to the customers. Most significantly, Kogan.com is the only Australia-based E-commerce organization that has expanded to the US. The organization has achieved more than $200 million in their seventh year of foundation. According to the speculation made by the Wall street journal, Kogan.com is worth near about $400 million (kogan.com 2017).
Kogan.com started to ship the products from its Hong Kong’s sites operations, directly to the customers all over the world. The particular way attracted varied wholesalers, distributors as well as the retailers to offer world-brands like Canon, Samsung, Motorola, Apple and Nikon and such in a comparatively low price. The enterprise sells near about 28,000 third-party as well as private label products and in the year 2015, the organization obtained over 52 million visits. Further, the organization has acquired the online assets of the Dick Smith’s store, which has added subscriptions worth of 1.3 million to the existing database.
It has been identified that the considered organization chiefly serves high definition LCD and LED televisions. After the year 2011, the company began to supply 3D televisions on the basis of customer request and started to sell other electronic gadgets like computer part, laptops, electronic notebooks and tablets. After becoming a popular online electronic store, Kogan.com opened an online shopping delivery service of confectionary, pet food, cleaning products and non-perishable food. It has been found out that one of the predominant features that have helped the organization in earning huge success is its convenient attribute to its domestic customers. The organization pursues the B2C or business to customer business model that accompanies the organization’s one of the fundamental assets, which is IP or intellectual property evolving around the brand of “Kogan.com” (kogan.com 2017).
Identification of the main business features
In this context, it is essential to note down that in terms organizational attributes, Kogan.com prefers to extract its revenue from the transaction volumes. On the other hand, it has been found out that Kogan has the strategy to enhance their revenue by extracting it from transaction volumes along with a high level of fixed price. The organization’s EBITDA (Earnings before interest, taxes, depreciation and amortization) margins have always volatile, which has helped the organization in accomplishing consistent earnings growth (kogan.com 2017).
After having a brief understanding about the organization’s business features, it is essential to identify the negative aspects related to the organization and thereafter segregate the positive aspects of the company from the negative ones. The positive aspects of the considered organization are identified to be –
- The business-to-customer business model, which helps the organization in directly selling products to the customers and thereby making convenient customer interaction interface.
- The company generates its income by using transaction volumes and a high level of fixed price.
- The organization experiences high revenue growth and sells products in an attractive way
- The organization is maintaining a volatile EBITDA margin (com 2017)
- The organization has launched the “live price” strategy that allows the consumers of Kogan to purchase a product in an impressive discount rate prior to its production.
- The enterprise has an impressive amount of online subscription, which has been increased right after the organization’s acquisition of the online assets of Dick Smith.
On the other hand, the negative aspects or the weakness of the organization are found out to be –
- Lack of growth in material earning
- The company is in the verge of encountering regulatory risks, which would possibly decrease the attractive selling approach of the brand
- The organization has been previously blamed for making misleading conduct and the organization criticized the governmental initiative to provide free of cost set top box to the pensioners.
- The organization does not possess an attractive website design
As it has been stated above, the organization does not possess an attractive website design. An appropriate website design helps in making a convenient user interface that enables a flexible interaction between an organization and its consumers. However, the organization possesses a potential set of privacy policy, which helps the organization in making a loyal relationship with the customers (Strauss 2016). Nevertheless, it has been found out that the organization uses a minimalist web page design as it seems that the organization prefers to eliminate any non-essential feature and concepts into their web page. In this context, it is essential to mention that in minimalist web design, an e-commerce organization prefers not to integrate any irrelevant aspects, which can bring potential distractions (Pallud and Straub 2014).
Therefore, primarily it seems appropriate for an e-commerce business organization for acquiring high customer attention (Garett et al. 2016). With the help of the minimalist web design, the organization creates a trendy appearance for the consumers though lack of attractiveness and vibrant appearance of the organization can prove detrimental to grab customer attention in future (Van Hove 2016). Nevertheless, the official webpage of Kogan.com seems to provide relevant information about their upcoming launch, discounts and features of their products. It is indicative of the fact that the organization’s webpage is the enterprise’s one of the potential medium through which they provides all the significant information from the very first page regarding products. The “fixed design” of Kogan’s webpage can be therefore contemplated as convenient user interface for the customers as they provides clear, transparent and relevant information about products.
Identification of the negative and positive aspects of Kogan
At the same time, it is to mention that the organization’s webpage is integrated with the privacy policy, which contains data about transparency, personal information, collection and access and management. Henceforth, it should be said that besides having an relatively less attractive web page, Kogan’s webpage has been proved to be an efficient aspect of user interface.
It has been mentioned above that the organization’s pursues a business model that is “B2C” or business-to-customer business model. With the help of B2C business model, an organization can successfully maintain catalog inflexibility, which helps the customers in making extensive search on the products (Almeida et al. 2014). On the other hand, the particular business model helps in reducing competition gaps, which is another advantage to any e-commerce organization in competing with other organization on the same foot (Veit et al. 2014). Most significantly, in terms of life cycle stage of a website, it can be said that the particular business strategy appropriately addresses all the eight phases of website life cycle. According to the current condition of Kogan.com, it seems that the organization has accomplished all the phases of website life cycle stage as any customer can have the facility of social media optimization. More significantly, it seems that Kogan.com maintains and updates their webpage on a frequent basis, which helps the customers to stay well updated about the product purchase related data. Therefore, it can be said that the organization’s business model has helped the organization to develop their website by using each of the necessary steps, which are analysis, specification building, design and development, content writing, coding, testing, search engine optimization and updating (Barnes. and Hunt 2013).
The above discourse is indicative of the fact that the organization has already started to expand and still it has been using the B2C business model. In order to have a more convenient approach to customers as well as to increase revenue, Kogan can apply the following –
To contact with both the domestic and overseas strategic suppliers and customer evaluate Kogan’s existing strategies and tools and with the help of an international consultant, undergo a thorough market research. It is to mention that the aforementioned strategy will help Kogan in identifying their potential rivals as well as the current demands of the customers (Mohapatra 2013).
Conclusion
From the above report, it has been understood that the considered organization has a fruitful business model and web page that help them to make a successful user interface and a loyal relationship. The B2C business model of Kogan has even helped the organization in successfully accomplishing all the eight steps of website life cycle development. However, as evident from the report, the organization has already started to expand overseas, therefore it can be said that the B2C business model might not prove effective in future. Moreover, the organization does not experience material earning growth. Therefore, the following can be recommended –
- Kogan should adopt the Buisness-to-business business model in order to increase its expansion rate (Mohapatra 2013)
- Kogan should create a more attractive webpage by applying the typographic or illustrative web design through considering responsive design strategy
- Along with selling original products, the organization can think about hosting auction for more profit in overseas (Wu and Wu 2015)
References
Almeida, F., Santos, J.D. and Monteiro, J.A., 2014. E-commerce business models in the context of web3. 0 paradigm. arXiv preprint arXiv:1401.6102.
Australia, K. (2017). Kogan.com | Australia’s Premier Shopping Destination. [online] Kogan Australia. Available at: https://www.kogan.com/au/ [Accessed 18 May 2017].
Barnes, S. and Hunt, B. eds., 2013. E-commerce and v-business. Routledge.
Chen, J.E., Pan, S.L. and Ouyang, T.H., 2014. Routine reconfiguration in traditional companies’e-commerce strategy implementation: A trajectory perspective. Information & Management, 51(2), pp.270-282.
Da Costa, E., 2016. Global e-commerce strategies for small businesses. Mit Press.
Garett, R., Chiu, J., Zhang, L. and Young, S.D., 2016. A Literature Review: Website Design and User Engagement. Online Journal of Communication and Media Technologies, 6(3), p.1.
Mohapatra, S., 2013. E-commerce Strategy. In E-Commerce Strategy (pp. 155-171). Springer US.
Pallud, J. and Straub, D.W., 2014. Effective website design for experience-influenced environments: The case of high culture museums. Information & Management, 51(3), pp.359-373.
Strauss, J., 2016. E-marketing. Routledge.
Van Hove, L., 2016. Cross-cultural user perceptions of website design and security: A commentary. Electronic Commerce Research and Applications, 19, pp.86-90.
Veit, D., Clemons, E., Benlian, A., Buxmann, P., Hess, T., Kundisch, D., Leimeister, J.M., Loos, P. and Spann, M., 2014. Business models. Business & Information Systems Engineering, 6(1), pp.45-53.
Wu, I.L. and Wu, S.M., 2015. A strategy-based model for implementing channel integration in e-commerce: An empirical examination. Internet Research, 25(2), pp.239-261.
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