A. 1. Describe the company’s internal strengths, capabilities, and core competen

Question

A. 1. Describe the company’s internal strengths, capabilities, and core competencies.

2. Does Logitech have any weaknesses that can impact its ability to compete in the future?

B. 1. What are the trends and conditions in the external environment that will have a dominant influence on the firm’s strategic actions?

2. In what ways (if any) should Logitech change its strategic direction?

C. 1. Fully explain Logitech’s Business Level Strategy (which one of Porter’s Strategies is it – and why do you believe this to be the case).

D. 1. What are the advantages of Logitech’s first mover and acquisition strategies?

2. What are the risks?

CASE 21 Logitech: Finding Success through Innovation and Acquisition Alan N. Hoffiman Bentley University and Rotterdam School of Management, Erasmus University gitech is uality personal computing products offered a g-standing company with a reputation for Apples, Switzerland. Shortly after establishitn t a reason- quality software development company, I nally Logitech's reputation for being on new hardware product opportunity that w of technology in the computer peripher- in the mid-1980s: the computer mouse. The m sis second to none. This offers the company standard equipment on the original Maclntosh enviable position of being at the top of its industry. launched in January 1984. Logitech viewed th computer However, the recent recession accompanied by the chang- ing face of the personal computing industry offer sig growth opportunity, an the company e mouseas a d this became a turning point fe future. Logitech introduced its first hard nificant challenges for the future. Logitech may have to ware device, the P4 mouse, for users of graphics softwcate An OEM sales contract with HP followed, and in 10 ys to compete in a world where its products have become standard fare on most personal computing it entered the retail market, selling 800 units in the devices. With a reputation for leading the industry, will month. In July 1988, Logitech's executives decided to ak Logitech find new technologies to conquer, or will it find the company public to help finance its rapid growrh in the early 1990s, while facing increasingly strong competition in the mouse business, Logitech identifea a larger market opportunity for computer peripber als and began growing its business beyond the mouse itself struggling to survive? Company Background Logitech, headquartered in Romanel-Sur-Morges, Throughout the next few years, Logitech introduced puter peripherals in 2010. Personal computer peripher- still camera, (3) a headphone/microphone, (4) a joystid tzerland, was the world's leading provider of com products such as: (1) computer keyboards, (2) a digita were input and interface devices that were used for nications, digital music, gaming peripheral, and (5) a web camera on a flexhic arm. While these new products were introduced under vigation, internet commu entertainment control, gaming, and wireless the Logitech name, the company also continued innora devices. Derived from the French word logiciel, meaning tion in its core mouse business. New and revolutionary software," Logitech was originally formally established technologies developed by Logitech allowed it to co in 1981 as a software development and hardware archi- tinue as an industry leader in the mouse and keyboa ture company by two Stanford graduate students in business he author would like to thank Tyler Thompson, Heather Wooten, Meagan Foy, Samantha Louras, and Will Hoffman for their research and contributions to Reprinted by permission of Dr. Alan N, Hoffman, Dept, of Management, Bentley University, 175 Forest St, Waltham, MA 02452.RSM Case Develo teaching case to provide material for class discussion rather than to illustrate either effective or ineffective handling of a management situation. Tne au identifying information to protect confidentiality ment Centre prepane disg.itd tuatio Copyright 2011, RSM Case Development Centre, Erasmus University. No part of this publication may be copied, stored, transmitted, reproduced or form or medium whatsoever without the permission of the copyright owner 272

Explanation / Answer

A. 1. Internal strengths of Logitech include brand recognition and reputation, superior quality of products, cutting edge technology, price performance, and diversified product offerings. The company is capable of producing high quality products with innovative features. Core competencies of the company include its ability to offer cutting edge innovative products at reasonable prices across the globe.

2. Logitech is currently the market leader in computer peripherals. However, in coming days the demand for computer peripherals would decline significantly as need of Trackpads and mice would be diminished due to the introduction of touch screen technology and built-in accelerometers in iPad and iPhone. Similarly iPad, iPhone and laptops are offering high quality cameras and speakers along with the device that would impact the company’s sales.

The company’s weakness is that it has limited its business to the computer peripheral devices, but with the change in market trends this market would be disintegrated completely. Therefore, the company needs to diversify its product portfolio to other growing sectors.

B. 1. Trends and conditions in external environment that have dominant influence on firm’s strategic decisions:

2. Logitech can change its strategic direction by developing partnerships with the telecom manufacturers as well as the mobile carriers. Some of them include Verizon, Sprint and ATT. Developing partnership with these companies would help Logitech in diversifying its business and continue its sustainable growth.   

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