Logitech Case analysis Essay

Logitech is an modern global provider for several expert accessories and peripherals. Logitech become incorporated in the early 1980s and nearly terce decades later it had roughly 40% of the market dispense in arenas such as Mice, Webcam, and Remotes. In order to fully understand Logitechs victory it is important to understand their schema for growing but as well their strategy for the issues they have face. And ultimately deciding what will be their warlike improvement in the future. In order to understand the strategy of Logitech is it imperative to consider a brief out-of-door analytic thinking, beginning with the general surroundings. The general environment focuses on demographic, economic, political/ legal, socio- cultural, technological, geographic, and physical environmental trends. These trends sponsor analyze what the succeeding(prenominal) strategical moves should be. In Logitechs case it is crucial for them to analyze on the whole seven trends but focus on the technological trends. Next, an industry analysis removes to be done in order to gain an whim of what kinds of free-enterprise(a) forces the industry will face. These forces are based off of cinque criteria flagellum of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of new substitutes, and rivalry among existing competitors.The third step in conducting an external analysis is understanding the competitors objectives, strategies, and their capabilities. Logitech established early on whom its competitors were, Creative Technology Ltd., Microsoft Corporation, and Royal Philips Electronics, and was able to differentiate its products from them. Strategy is a set of commitments and actions designed to exploit core competencies and gain a competitive advantage. Based on Logitechs objectives of growth and earnings, they enacted a few tonality strategies in order to achieve their goals. One strategy was acquisition Logitech realized that to enha nce the companys development it was crucial to expand their portfolio into separate markets and not just the computer mouse. This strategy was seen through the acquisition of QuickCam PC in 1998, Labtec, Inc. in 2001, Intrigue Technologies, Inc. in 2004, etc. After Logitechs initial product, they realized that they would have to be proactive in decision innovative ways to grow and in 2000 they introduced their first gaming console table controller. Followed quickly by the production of Logitechsio Personal Digital Pen.Logitechs competitive advantage has been the first- mover advantage, allowing them to build a rapport with buyers modify them to have larger market segments. This is seen with their pioneering of the computer mouse and keyboard, as puff up as having been on the forefront in video conferencing. The case also states, Instead of following market trends, Logitech has often created them.- an indicator of their first- mover competitive advantage. Although Logitech had mu ch success with its strategies of innovation and acquisition, they have also had their fare share of implications, some of which they have overcome and others that remain. One critical issue that Logitech faced was the recent financial crisis of 2007/2008. Because technological products are a luxury good, consumers fly the coop to cut back when on that point is less disposable income. This can be seen in the 9% decrease, 29% decrease, and 39% decrease for sales, operating income, and cabbage income respectively from 2009 to 2010. One method that Logitech maneuvered the crisis was by reducing its workforce by 15%.Additionally, they cut dividends causing their earnings retention ratio to increase, which constitute them excess cash for R&D as well as excess cash for acquisitions. Another issue that Logitech faced was having numerous manufacturing plants discharge globally. After Logitech realized that these dispersed plants were hindering their growth, they consolidated. This allo wed them to increase their competitiveness and deem lower priced products. The examples above relate to issues that Logitech faced but were able to overcome. However, there are still issues that Logitech faces but have unable to resolve. The dominant contest that Logitech faces currently is in regards to evolving buyer of necessity. In 2010, apple enhanced their play off screen technology by incorporating built- in accelerometers, which eliminated the need for mice or Trackpads. Additionally, Apple and Windows products now come equipped with higher quality speakers and camera, diminishing the need for Logitech peripherals. With the decreasing market demand for Logitechs peripherals, they must decide the strategic direction for their future.From the inauguration of Logitech, they have always exceled in overcoming their competitors by their innovative strategy. In order to overcome the issues they currently face they need to spiel innovation back to the table. They need to truly differentiate by centering directly on attributes, consumer relationships, or links within or mingled withfirms. In addition to achieving differentiation as a competitive advantage, Logitech needs to redirect their strategic goals by examining the five major elements of strategy. They need to assess their arena and narrow their market segments. They need to focus their vehicle on acquisitions, as they have done in the past. Redirecting their strategic direction and pose the focus back on innovative, cutting- edge product will help them re-differentiate from their competitors, which will allow Logitech to continue in the future as a premier technology company.