Tutorial 2

Logitech Computer Accessories Industry

** When you first look at a company, you try to identify the industry the
company is in.
Worlds largest producer volume producer able to achieve economies of scale
lower cost
Technological innovator + configure their activities in the value chain (Porters)
hybrid strategy
Global strategy aka standardisation strategy = lower cost
The activities
Inbound logistics Operations Outbound Logistics Advertising and
Promotions (along of the rest of the 4Ps) After Sales Activities
Using Porters value chain framework, able to identify the areas that Dell is able
to save cost.
Dell low cost leadership
Configuration of activities happen in different countries where you locate the
different activities How you coordinate the activities whether you do it
successfully end result is to sustain the company.
**There will be a chapter on global strategy in the syllabus
The activities that they are good in they will localise it, but the activities that
they arent so good in they will outsource it.
1. Define the concept born-global. Then explain whether Logitech is born
global. A born global firm = initiates IB activity within 6 years of inception.
Logitech is a born global firm (5 years)
2. Theories associated with international trade. Identify and theories and then
apply them into the answer.
Specialisation Absolute / Comparative Advantage Efficient Labour
Productivity Lower Cost
H&O, Ricardo Adam Smith theories show why it is beneficial for a country to
engage in intl trae, even for the products that is able to produce for itself. Intl
trade allows a country to specialise in the manufacture and export of the
products that can be produced most efficiently in that country, while importing
products that can be produced more efficiently in other countries.
3. Using Michael Porters Theory of Global Strategy, the way Logitech has
configured his local activities as followed.

The structure should be centralised in the HQ

Comparative Adv suggests that is makes sense for a country to specialise in
producing these goods that it can produce most efficiently, while buying goods it
can produce relatively less efficiently from other countries even if that means
buying goods from other countries that it could produce more efficiently itself
Logitech has successfully located the various parts of its value-added chain
around the world to take adv of those attributes that are in each of the locations
in which it operates (in the case study)
4. Both are equally important. Because they are using hybrid strategy where
they want to be cost efficient and differentiate their product. Michael Porters
generic strategy of differentiation you can sell in a higher price and make up for
a low volume.
5. Silicon Valley is located there where it is technologically advanced. Intel and
HP are located there. Allowing them to be able to network within technological
knowledge, an effort to be closer to many of Americas high-technology
enterprises, Logitech moved its HQ to Freemont, California. However, Switzerland
is still important to Logitech as it undertakes basic R&D work there.
Porters Diamonds Factor Endowment - basic & advanced factors.
B
6.