Question
Read the case Logitech below and answer the following question:
Question 1
Analyze and explain configuration of Logitech's global value chain
Please see Logitech case study below:
Logitech Best known as one of the world's largest producers of computer mice, Logitech is in many ways the epitome of the modern global corporation. Founded in 1981 in Apples, Switzerland, by two Italians and a Swiss, the company now generates annual sales of over $1.5 bilion, most from products such as mice/keyboards, and low-cost video cams that cost under $100. Logitech made its name as computer peripherals. It was the first company to introduce a mouse that used infrared tracking rather than a tracking ball, and the first to introduce wireless mice and keyboards. Logitech is differentiated from competitors by its continuing innovation, high brand recognition, and strong retail presence, Less obvious to consumers, but equally important, has been the way the a technological innovator in the highly competitive business of personal ompany has configured its global value chain to lower production costs while maintaining the value of those assets that lead to differentiation Nowadays Logitech still undertakes basic R&D work (primary software programming) in Switzerland, where it has 200 employees. Indeed, the company is still legally Swiss, but the corporate headquarters are in Fremont, California, close to many of America's high-technology enterprises, where it has 450 employees. Some R&D work (again, primarily software programming) is also carried out in Fremont. Most significantly though, Fremont is the headquarters for the company's global marketing, finance, and logistics operations. The ergonomic design of Logitech's products - their look and feel- is done in Ireland by an design firm. Most of Logitech's products are manufactured in Asia Logitech's expansion into Asian manufacturing began in the late 1980s when it opened a factory in Taiwan. At the time, most of its mice were produced in the United States. Logitech was trying to win two of the most prestigious OEM customers - Apple Computer and IBM. Both bought their mice from Alps, a large Japanese firm that supplied Microsoft. To attract discerning customers like Apple, Logitech not only needed the capacity to produce at high volume and low cost, it also had to offer a better designed product. The solution manufacture in Taiwan. Cost was a factor in the decision, but it was not as significant as might be expected, since direct labour accounted for only 7 percent of the cost of Logitech's mouse. Taiwan offered a well developed supply base for parts, qualified people, and a rapidly expanding local computer industry. As an inducement to fledging innovator, Taiwan provided space in its science-based Industrial Park in Hsinchu for the modest fee of $200,000. Assessing the opportunity as a deal TURN OVER]
Explanation / Answer
The value chain involves conversion of raw material of company into output that are usable by adding value to them .The value chain activities include manufacturing ,inbound and outbound logistics ,as well as sales & services ,procurement ,firm infrastructure ,technology etc.
A global value chain is depicted by a company locating defferent activities of their workin defferent countries that maximize the efficiency of the value chain.A global value chain enables a company to increase its competitivness among other companies .
Logitech was found in 1981 in switzerland but now it has spread its activities all over the world . it has its headquarter at california,manufacturing done at taiwan,now production take place at china,and parts are being supplied from america & malasia.logitech was the first who introduced a mouse with inffrared tracking. Logitech increases its production because of the globalization and was able to win prestigious customer like apple & IBM.Their activities are spread over the world with consideration of low cost & high volume . they have such a efficient operation managment that they are able to manage such a big company successfully.logitech keep innovating its system to gain ,maintain and increase its costomers globally.China has affordable & skillful labor thats why logitech has incresed its production .Reaserch & Development is the key element for attaining global economies of scale .Company is keeping this element in its home country .The globalization of company has resulted in the company to being the worlds largest known producer of computer mice .
