Introduction to E- commerce Kogan

Questions: 1. Define the role of using electronic commerce on the business expansion.2. Recognize the type(s) of business model(s) employed in the selected website.3. Recognize the target markets and related revenue model in the selectedwebsite.4. Recognize the implemented business strategies in the selected website.5. Describe the development of secure electronic transactions on the Internet.6. Explain privacy policies, online auctions and any potential legal or ethical issues.7. Describe the ways that the website manages the customer relationship.8. Recommendation for improvement of the website performance. Answers: Introduction Electronic commerce consists of the buying and selling of products and services through the internet. E-commerce websites is used by most businesses whether small or big business houses to gain larger profits and larger market share. It is the place where retailers, manufacturers, and clients come together to trade. Todays customers are getting addicted to online shopping; the reason behind this is convenience, as they can shop without going out from their home place and 24/7 shopping availability of the websites, as it is not necessary for all the buyers to buy products and services in the day time only. Overview of the Business and Description of Kogan In case of kogan.com it is the largest online department store in Australia. The company was founded in 2006 by Ruslan Kogan. The company has headquartered in Melbourne, Australia. The kogan.com website was started by offering LCD televisions. And by November 2010, the company entered into the UK market with a range of LCD televisions and GPS units. In 2011 itself company also started shipping its product all over the world by bypassing wholesalers, retailers, and distributors. And by this the company enabled its selling across the world and started offering big brands like apple, canon, Nikon, Samsung, Motorola, and more at low prices. This helped the company as the only Australian-owned international customer electronic brand. On 15th march 2016, kogan.com acquired dock smith holdings online business. Main Business Features of the Websites Kogan mission statement is: to make the latest technology affordable for all the customers. Kogan.com removes all the middlemen, agents, so that customer can avail the product at a cheap price. It also cuts the prices by doing cheap advertising by using popular widgets on its website to connect their customers with social media like Facebook, Instagram. By enabling this customer who purchased its product online through social media it immediately extends its customer audience by making the customers know about the company. Positive and negative Aspects of the company Positive Aspects Prices are very competitive as compare to other websites and local retailers because of cost advantage. Products exactly match with the features as told by the customer. Company in its introductory stage was only offering LCD televisions but now it is in high definition televisions, tablet computers, smart phones, digital cameras, home appliances, digital radios, PVRs, net books, blu-ray disc players, video cameras, e-book readers apart from electronic products. There are several shopping search engines which help in comparing prices while shopping. Negative Aspects To improve customer care team. Because sometimes in case of online marketing product becomes out of stock, hence it need to be informed the customer immediately and the price should be repaid. To maintain image in the minds of consumer it is very essential to fulfill the needs of customers. Increasing sale is not only the aim of the manager, rather there should be after sale services provided. Kogan company warranty procedure must be improved. It has been observed that customers usually prefer those product and services which are providing a good after sales services. One of the important issues is security because there is nowhere guarantee that payment is done by the card owner only. One of the most challenges in online marketing is to analyze from technical point of view rather than of a strategic or marketing prospective.(ASX Corporate Governance Statement,2016) Website Design with Respect to user Interactions, Trust and loyalty In case of online marketing it is very difficult to create trust in the minds of the consumer and to maintain to too. Hence the company must adopt these practices are like; to connect customers such as social sites networking. Because people tend to purchase a product more if others are saying well about that. A good customer service can help to restrain the consumer. Because lack of face to face interaction does not confirm that there will be no assistance required. Hence customer services should be fast and speedy. Loyalty programs should be implemented, which can be done through email coupons, free shipping perks, contests etc. Apart from that as an e-commerce company there should be multiple payment options example credit cards, pay pal, gift offers. Kogan Secure Electronic Transactions Secure electronic transactions (SET) is a non proprietary industry joined by master card and visa for secure online e-commerce, credit card transactions over the internet (Clark, Hoyle Hynes, 2016). Kogan privacy Policies Here the privacy policies adopted by the Kogan.com are discussed below: Openness and transparency: Kogan.com Pty Ltd is committed towards the customer privacy and upholds all the rights discussed under the Australian Privacy Principles (APPs). Personal information: in personal information company collect name, address, email address, telephone number(s) and date of birth of the customer. Collection: information would only be collected by lawful and fair means. Disclosure of personal information: this is only when the customer has given consent to disclose or when the company is authorized by law. (Kogan.com, 2016) Relationship Between the Kogan applied Business model and its Life Cycle Stage: Business model: There are several types of ecommerce business models a company can easily take. The Kogan Company use the white labeling and manufacturing business model. This model says that when the company buy its product in bulk and store them in a warehouse somewhere. This is usually common in B2B market. In November 2010, ruslan Kogan expanded business to UK with a range of LED TVs and GPS units. The expansion helped the company to be the only Australian owned electronic brand. In 2011 Kogan started shipping its product from Hong Kong and supply to customers of all over the world. And hence by bypassing wholesalers, distributors, and retailers enabled the company to offer the products at a very low price. Hence by this we can say that Kogan Company is manufacturing product overseas or importing them and putting the company brand on them. In this model the margins are very high that can lead to cost leadership management and can make the product price cheaper. Website Life Cycle Stage There are three stages in which as per this report Kogan is at e-commerce stage. At this stage the internet becomes the bloodline of the organization. The client not only communicates with the company rather it also purchases goods and services through the website. (Botha, Bothma, Geldenhuys, 2008) E-Commerce Implementation Strategy Successful implementation of any e- commerce business is dependent on implementing for adopting these seven key steps: Planning for e-commerce business: There should be clear cut vision, mission and objective to be achieved. Without a goal, planning cannot be done effectively.Technology selection/website analysis: Website should be selected analytically, because it is the only place from where audience would be targeted and customer segments would be done.Customer acquisition: Here the role of digital marketing arrives, because in todays era customers generally engage in using multiple devices that can be reached out through search engine optimization, paid advertising, email campaigns, display advertising.Customer engagement: Customers seek to engage more with that brand which provides offers, discount during special seasons.Customer retention: There needs to be constant effort to look out for features and functionalities that will enhance the customer trust.Optimizing key metrics: Some of the key matrices are the total revenue generated, cost of customer acquisition, percentage of customer converte d and percentage of customers entering into website through different channels.Business analysts and customer insights: This is the last step. Here comparison between the product well performed and the other products displayed in the organization is done. When implementing e-commerce firm may face several inhibitors and enablers like; Management commitment comes to very crucial for it success. It has been noted that unwillingness of the manager to be responsible for technological change. No company can survive without the help of financiers, suppliers, distributors. Hence entrepreneurs must use social capital to access resources. There should be readiness of acceptance of government support and national IT infrastructure for e-commerce adoption. There might be some cases that to remain competitive in the market company also started doing online business. Issues Regarding E-commerce: Some of the policy issues that government must address in regulating e-commerce are as identified by U.S. government are: Financial issues which includes custom and taxation and electronic payment system, legal issues which includes uniform commercial code for electronic commerce, intellectual property protection, privacy and security. Another issue is market access issue which includes telecommunication infrastructure and interoperability, content, and technical standards. Conclusion and Recommendations To stay competitive in electronic market the company must require staying updated, technologically advanced, user friendly. Hence to achieve all this company requires changing its business models, its structure sometimes. The main restriction is the fear of lack of after sale services, lack of physical contact with the product and inability to touch the product, wait for a long time for delivery of the product. The board of Kogan believes that the directors are able to objectively analyze the issues before them in the best interest of shareholders. But the corporate governance requires that there should be 2 independent directors out of 4 directors. Hence the company is recommended to work through on these issues and recommendation. References: ASX Corporate Governance Statement. n.d. [Online]. Available at https://www.kogancorporate.com/resources/pdfs/Corporate%20Governance%20Statement.pdf [Accessed on 20 December, 2016] Kogan.n.d. [online].viewed on https://www.kogan.com/au/privacy-policy/ [Accessed on 21 December 2016] Kulyk. P Michalowska. M. 2016. Consumer behavior on the e-commerce market in the light of empirical research in lubuskie voivodeship; vol.20, no.1.[online] Available at https://web.b.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=1sid=6bf579f6-f9be-400a-bae4-1a6c6f36462e%40sessionmgr1 [Accessed date 20 December. 2016] Isaias. P (2003). 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