Knowledge Management And E-Commerce Business: A Case Study Of Kogan

Defining ecommerce and knowledge management

Discuss about the Knowledge Management and E-Commerce Business.

The aim of the report is to discuss on the e-commerce business of an organisation and effectiveness of knowledge management. The chosen case study is Kogan, a leading e-commerce company in Australian. Kogan has business in Australia, New Zealand and United States. Kogan supplies products online to the customers. The product line of Kogan includes electronic goods such as TV, tablets, phones and an extensive range of home appliances of kitchen, gardening, lighting, fitness tools and many more (kogan.com, 2017). During 2015, the company has started to expand business in other segment such as grocery products. This firm operates in competitive market as online business is popular business in Australia. Potential competitors of Kogan are Temple & Webster, Catch of the Day, The Iconic, JB Hi-fi and others. In order to perform online business effectively, Kogan used to keep good relation with the suppliers, importer, wholesaler, distributors in the supply chain.

As defined by Wong et al. (2015), ecommerce is the business conducted through electronic mode especially through internet. E-commerce gives a platform to the buyer and the seller without physical presence. E-commerce sites play an intermediary role between buyer and seller. In case of international e-commerce business, International Consumer protection and Enforcement Network regulates the e-commerce business in order to protect consumer rights. In Australia, business firms have to follow the guidelines of Australian Treasury and Australian Competition and Consumer Commission.

In the view of García-Álvarez (2015), e-commerce business facilitates trade and growth of the economy. This is an effective platform to promote the products of small and medium enterprise. Moreover, consumers get choices in a wide range within a reasonable price.

Leong et al. (2016) stated that dependence of e-commerce companies on knowledge management system is growing in now a day. Knowledge management facilitates the growth, customer acquisition and retention and cost management. Chiu et al. (2014) stated three main components of knowledge management such as creation, transfer and application. Knowledge creation is the process of acquisition, validation, processing of new knowledge and integration with existing knowledge. Knowledge transfer is addressing the question of how, which, what, when and whom to deliver the knowledge. Knowledge application refers to the functionalism of the company in order to employ knowledge. While a conventional stores offer a limited number of the items, online store offer a large number of items. Therefore, knowledge processing tools are helpful for this organisation to handle large number of data. A large e-commerce company needs to store and manage a large number of demands on available commodities at a global scale.

Analysis of contextual factor affecting the business

Customers are important factor, who affects the e-commerce system of Kogan and knowledge management technique of its e-commerce business. Knowledge management tool gives reliable information about the customers and the suppliers. Knowledge management in the e-commerce organisation provides an environment that the company, where a supplier and the customer can influence the action of each other. This influence in turn goes directly to the supplier and the customers and mediated into the system (Chua & Banerjee, 2013).

Other influential factors on Kogan business are economic policy, technology, fashion trend, cultural event and weather condition. Knowledge acquisition is required on different consumer choices, ongoing trends in the market. Wang, Wang & Liu (2016) opined that statistical outlier can be used as an automated knowledge processed tool. Knowledge management in this business involves creation of new knowledge regarding market, customer, and depreciation of irrelevant information and deletion of dead knowledge. Information can be collected in two ways: online and offline. Data collected through online mode is less costly and less time consuming, whereas, the off line data collection method is complex and time consuming as well.

Impact of technology is essential factor for knowledge formation and the expansion of e-commerce business. As this type of business is based on use of modern software, innovation in technology improves the business performance. Data management regarding quality of services, timeliness, and returns of the products, and responsiveness to feedback becomes easier (Qu et al. 2015). Data warehouse of Kogan guarantees customer privacy and offers a convenient mode of payment. The information technology software used by Kogan needs to be updated with the changing business environment.

As mentioned by Fang et al. (2014), seasonal changes in demand have effect on the business of Kogan. Seasonal change in demand in daily, weekly basis affects the sales of the company. However, the affect is less on online stores than the bricks and mortar stores. When there is adverse whether condition outside, sales in online stores increases. Moreover, the demand for gardener products increases when there is warm weather outside.

Major domestic and economic policy that an affect the business of Kogan are as follows:

Political environment: The political environment of Australia and its trading partners affect the business of Kogan. Change in political power may bring change in relevant business laws and application of regulation on business. Moreover, Leong et al. (2016) explained that the bilateral trade relation of Australia with other countries affect the import of foreign brand by Kogan. Bilateral trade relation facilitates trade in terms of lower tariff, which helps the company to provide sufficient discount on the imported products. Furthermore, Kogan has to abide by the regulations of Australian Intellectual property laws.

Major domestic and international contextual factors

Economic environment: Government policies regarding direct and indirect tax rate such as corporation tax rate and sales tax. As ecommerce business is very popular in Australia, companies like Kogan makes huge revenue annually. Therefore, a significant amount of corporation tax has to give to the government. Moreover, as Kogan operates in US, it has pay a portion of the profit to the US government. Therefore, any change in taxation policy affects the e-commerce business of Kogan. Furthermore, change in inflation rate causes fluctuation in price of the product. As mentioned by Chiu et al. (2014), changes in the exchange rate affect the price of the imported product. Any appreciation of the domestic currency makes imported goods cheaper and hence increases demand for the product. On the other hand, depreciation of the Australian currency makes Australian product cheaper to the foreigner. Hence, exchange rate fluctuation affects the sales revenue and the business strategy of Kogan.

Environmental factor: Reduction of carbon foot print is now a growing challenge for the business enterprise. This is even relevant for the e-commerce business. As stated by online retail stores use 30% less energy compared to a traditional retail stores. However, as Kogan sells the electronic product, these products generate e-waste substantially. Therefore, Kogan has responsibilities towards society and environment for the reduction of the e-waste. Hence, this company can take possible steps such as recycling of the used products and package to reduce the impact on the environment. This step can enhance the CSR impact on the stakeholders and may create positive effect on sales of Kogan (Reddy, 2012).

Social factor: Per capita income of Australia and the countries, where Kogan operates affects the demand for the products sold by the company. Demanded for product varies across different income group in the relevant economy. Therefore, Kogan keeps products within an extensive range of price. Australian culture is diversified and therefore, choices are also diversified. They prefer both local and imported brand. Kogan has to set its marketing and product development strategy based on the fashion trend, culture, preferences and income of the consumers (Wang, Wang & Liu, 2016).

Legal factor: Kogan has to operate under the regulation enforced by Australian Competition and Consumer Commission. Along with this, Australian government legislation, state and territory laws have to be maintained determined for consumer protection. The company has to maintain workplace safety laws for the employees of the administrative office. There are regulations in Australia such on unfair contract terms, consumer rights guarantee, product safety laws and others (austrade.gov.au 2017). 

Market competition: Growing competition in the e-commerce business affects the business performance and the strategy of Kogan. As profit in the e-commerce industry is always remaining positive, entry in this market is easy. Therefore, number of competitors in this market is large such as Temple & Webster, The Iconic, JB Hi-Fi, Red Balloon, Amazon Australia, Target Australia, Pet Circle, Stylerunner, Appliances online, Dick Smith and many others (Khan, 2016). Any change in business strategy of the competitors has effect on the business of Kogan.

Conclusion

The report highlights that Kogan is a successful e-commerce business in Australia, although younger. This study has analysed the effect of knowledge management on the e-commerce business. It has been studied that knowledge management enhances the growth of the company as this tool manages a large number of data regarding suppliers, customers and competitors. Knowledge management techniques are facilitated through improvement in technologies. The factors affecting the knowledge management and ecommerce business are technology, local culture and weather condition.

As Kogan operates in the international context and engages in import of product from foreign countries, both national and international political, social and economic environment affects the business. The effect of legal and environment aspects have been highlighted. It can be mentioned that as Kogan is a younger company and operates in a competitive environment, it needs to be strategic if wants sustainability in long run. The company has to emphasis on the knowledge management as it has greater impact on online business. Data collection and management is easier through knowledge management tools and use of integrated software. As discussed earlier, Kogan may emphasis on the reduction of ecological foot print and product recycling to increase reliability of the stakeholders and improvement of the business.

References

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