Logitech - Introduction

Introduction

With an annual turnover of $1 billion, Logitech has been able to establish itself as the pioneer in products like mice, keyboards, low –cost video cameras etc. Logitech made its name as technological innovator in the highly competitive business of personal computer peripherals. Logitech is different from its competitors by continuing innovations. Furthermore, the company has also adopted the strategy of cost differentiation by configuring its global value chain to lower production costs. Legally speaking, Logitech is a Swiss company. But to harmonize with the cost and other forms of advantages, it carries different activities in different part of the world. The corporate headquarters are in Fremont, California where company’s global marketing, finance and logistics are carried out whereas designs of its products are done in Ireland. Majority of its products are manufactured in Asia. Specifically, China and Taiwan have been the most desirable places main reason being the availability of low labor cost in these countries.

1. Choice of Taiwan as a major manufacturing site for Logitech and its explanation from Porter’s diamond

The diamond model of Michael Porter for the Competitive Advantage of Nations offers a model that can help understand the competitive position of a nation in global competition. It explains the reason to why some areas or more generally, countries are good in particular industry and what is the main reason behind such business being a success. It also tries to explain the specialization of a geographic area in some definite type of business thus gaining a competitive edge over its competitors. Various factors that may contribute for the competitive advantage maybe land, location, resources, labor etc. These factors are further examined and following factors are derived that can best explain the diamond model of Porter.

i. Factor conditions

Porter argues that key factors of production or specialized factors are