Logitech is a world leader in personal peripherals, driving innovation in PC navigation, Internet communications, digital music, home-entertainment control, gaming and wireless devices (PriceGrabber.com 2007). The company's products combine essential core technologies, continuing innovation, award-winning industrial design and excellent price performance. Logitech International is a Swiss public company traded on the SWX Swiss Exchange under the symbol LOGN and on the Nasdaq Global Select Market under the symbol LOGI. In January 2007, Logitech was added to the NASDAQ-100 Index® (Logitech 2008). Logitech's origins lie in the OEM sector, which remains an important part of its business, and represented 11.6 percent of the company's total sales in Fiscal 2006 (PriceGrabber.com 2007). To meet the demands of its OEM customer base, which includes most of the world's largest PC manufacturers, Logitech offers high-volume manufacturing with focused quality control, worldwide distribution and logistics, and the ability to leverage its infrastructure under changing demand conditions.
Logitech continues to broaden its product offering and its presence in the retail sector. This is fueled by a trend among consumers to enhance their basic PC systems with more fully featured personal peripherals that add functionality and cordless freedom to their desktops. They are also purchasing supplementary devices designed for new applications and specific purposes such as gaming, multimedia, or audio and visual communication over the Internet. Further, Logitech's retail business includes personal peripherals for platforms beyond the PC, such as gaming consoles, portable music players, mobile phones and home-entertainment systems.
Today, Logitech's retail business accounts for 88.4 percent of its revenue (Logitech 2008). To provide the market with a broadening array of best-of-category products, Logitech's business model calls for supplementing its internal engineering and manufacturing strength with additional products and technologies through a combination of strategic acquisitions and industry partnerships (PriceGrabber.com 2007).
Chapter 2. Supply Chain
Logitech is sensitive to the trend in IT industry. Customers are always long for updating their PCs accessories and purchasing stylish and personalized IT products. By this reason, Logitech has put a lots effort in fastening the launch of new products to the market to satisfy the needs and trends. Nevertheless, a well-operating supply chain is the conjunction to the successful achievement.
The success of Logitech is to convert a simple and single-product supply chain into a complex and multi-product supply chain under harmlessness to its sales and to fasten the product delivery. However, behind this steady the deployment of its sources efficiently is the key, and Logitech has still insisted this merit.
The development of Logitech starts from a simple and inelastic supply chain. In the beginning of ‘80s, Logitech started running the mouse-manufacturing business. The operation was running excellently with a simple supply chain. The single-product supply chain was supported by its manufactory in Suzhou, China and served the worldwide market. Although it was not efficient, it was enough for Logitech to cope with orders.
Nowadays a simple supply chain can’t meet the requirements of Logitech anymore which has developed more and more product lines and has become a multi-product company. In 2005 Logitech have 135 kinds of PCs peripheral products in the market. Except for manufacturing over 6 million mice in a year, Logitech has also produced numerous peripheral products. In this case, the management of the simple supply chain has been no longer realistic. A more elastic supply chain which is able to deal with the changes of demand and compete against the pressure from competitors is what Logitech needs. Therefore, Logitech...