LOGITECH

Case Analysis
By Group Number 4

CASE FACTS :1. Founded in 1981 in Apples, Switzerland.

2. First company to introduce infrared and wireless mouse technology. Logitechs Strategic Locations:1. 2. 3. 4. Switzerland United States of America (California) Taiwan and China

Outsourced ergonomic design to Ireland

Issue
Logitechs manufacturing facility was in US, thus cost of production was high Trying to win 2 major contracts Apple computers and IBM

Solutions
1. If there was no free trade, American consumers would have paid much more. 2. Cost of production in China & Taiwan is low due to Factor endowment of those

countries. Also, Logitech had first mover advantage.

3. Comparative advantage US & Swiss R&D, Ireland Design, Taiwan & China Manufacturing & Assembly

4. The 650 employees in US & Swiss create more value. 5. Porters Diamond related and supporting industries, customers and technological

advantage
6. Porters Diamond Strategy of lowering cost of production and relative price of Alps mouse. Advantages in skilled labor, cheap infrastructure. Expanding computer industries. Related industries Technology based industries (Techno park)

7. A. Lower cost of labor, cheap infrastructure, related and supporting industries, customer demand B. Increase in employment in China, Chinese economy will improve, Living standard of the people. C. Consumers of developed countries will be able to purchase quality products at relatively low price. Developed countries can specialize in the area of their efficiency. D. Unemployment of un-skilled labors in the home country, Domestic industries will suffer.