Logitech Introduction Essay Example

Logitech Introduction Paper With an annual turnover of $1 billion, Logistic has been able to establish Itself as the pioneer in products like mice, keyboards, low -cost video cameras etc. Logistic made its name as technological innovator in the highly competitive business of personal computer peripherals. Logistic 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, Logistic is a Swiss company. But to harmonize with the cost and other arms of advantages, It carries different actively In different part of the world. The corporate headquarters are in Fremont, California where companys 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 Logistic and its explanation from Porters 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 mall 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, action, resources, labor etc. We will write a custom essay sample on Logitech Introduction specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Logitech Introduction specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Logitech Introduction specifically for you FOR ONLY $16.38 $13.9/page Hire Writer These factors are further examined and following factors are derived that can best explain the diamond model of Porter. L. Factor conditions Porter argues that key factors of production or specialized factors are created, not inherited. Specialized factors of production are skilled labor, capital and infrastructure. Because of availability of these factors in Taiwan in abundant, it is selected as a major manufacturing site of Logistic. As Porter has argued that advanced factors give companies competitive edge availability of these factors elementally in Taiwan has caused it be a rewarding destination. T. Related and supporting industry Porter argues that the presence of upstream or downstream industries facilitates the exchange of Information and promotes a continuous exchange of idea and innovation. Taiwan has a well developed supply base for the parts required to nutcracker ten mall advantageous products AT Logistic n. Nine available TTY AT raw materials or the upstream products re quired for manufacturing process of products of Logistic is fully supportive in Taiwan. This validates the argument of Porter and he production of Logistic products in Taiwan. Ii. Demand condition Porter forwards an assumption that, the more demanding the customers in an economy, the greater the pressure the firms face to constantly improve their competitiveness through innovative products, high quality etc. With growing computer and information technology in Taiwan along with in the whole world, the local demand of the products of Logistic in Taiwan has also been an influential factor in the choice of the place. This is also the reason why Logistic started its production in Taiwan. Lb. Firms strategy, Structure and Rivalry Logistic faced a high level of competition those days and at present at well. To gain the advantage over its competitors, Logistic has adopted the strategy of producing high volume and low cost products. This was only possible if they could grasp a production site which has abundant labor, raw materials and other resources and at the same time produce at very high volume. Taiwan probably was the best alternative Logistic could come up with so they shifted their production center to Taiwan. Fig: Porters diamond for Logistic selecting Taiwan as their production center. Theory of comparative advantage and Logistic Global operations According to Orchards theory of comparative advantage, it is advantageous for a country to produce good that it has specialized on. This gives overall advantage by creating trade and reducing the cost of production. The main motive behind Logistic configuring its global operations such that it manufactures in china and Taiwan, undertake basic R in California and Switzerland, design products in Ireland, and coordinate marketing and operations from California is because of the competitive advantage. It is comparatively advantageous to undertake those certain activities in certain places. This is why Logistic does so. Logistic and manufacturing activities in Taiwan and China High volume of production ensuring quality is required by Logistic to face the fierce competition from its competitors. This high volume of production would give economic advantage if the labor wage can be maintained low. China and Taiwan are best known for their high population and thus low labor cost. This drives Logistic to install a manufacturing plant there. For the same volume of work in America, Logistic old probably have to pay twice than what it really pays in china or Taiwan. Lectern Ana research Ana development (R) actively In clamatorial Ana saltcellars Well qualified labor is required for constant innovation of new ideas. This helps the firms gain a competitive edge. California and Switzerland have proximity to modern technologies and high technology enterprises. Furthermore, they have the availability of the highly qualified labor in abundance. This is the reason why Logistic has placed it R activities in California and Switzerland. Logistic and designing products in Ireland Ireland is known for its new and attractive designs. An attractive design can be a factor that creates an advantage. A design that is better than that of competitors obviously creates a differentiation of the product. It is for this reason that Logistic has to focus on design and for this purpose; Ireland seems to be the best alternative. Logistic and coordinating marketing and operations from California There are numerous companies in California which has gained competitive advantage by good marketing and operation management. California is close to many of the Americas gig technology enterprises. Less government intervention and support from government are also striking reasons for Lighters corporate office located in California. Additionally, the presence of skilled employees in these fields in California attracts Logistic to have a corporate headquarter in Fremont, California. Factor condition: Low production cost; qualified people Competition/Rivalry: Japanese firm Demand Condition: Need of increase in capacity Related and Supporting Industries Science based industrial park providing space at modest fee Chance Government