Essay: Competitive strategy for Logitech

Introduction
In a such intense competitive business area, companies which are especially pioneers in the sector try to develop sustainable and competitive strategies to retain their positions in the market. Because each of those strategies have their own strong and weak sides, developing new strategical analyses is mandatory. In this assignment an integrated model of SWOT (Strengths-Weakness-Opportunities-Threats) Analysis and Porter’s Five Forces Model has been used to develop a competitive strategy model for Logitech. Based on finding and analysis, in regards of relative important variables those are related to strengths and opportunities in competitors force which have considerable weights in the global weights table, competitive strategies have been developed for the company.
1.0 Company Profile
Logitech was founded by three friends; Borel, Zappacosta and Marini on 2nd October 1981 and opened its first office in Apples, Switzerland. Originally, it was to be named Softech because of the software background of the three founders. Since this name was already registered, the founders chose Logitech, using the root of the French word for software: “logiciel.”
Vision
The interface links people and information will transform the way they work, learn, communicate and play.
Mission
Logitech bring to market tools that enrich the interface between people and information.
Logitech dealing with producing personal computer peripheral to help people enjoy a better experience with digital world. In 1982, Logitech introduced the P4 Mouse, their first hardware device. Logitech established itself as the worldwide leader in computer mice and have reinvented the mouse in various of ways to match the evolving needs of personal computer and laptop users. In April 1996, Logitech celebrated the shipment of its 100 millionth mouse.
The technology industry is growing rapidly. The idea grows rapidly and being inspired by innovation and creativity in the production of a superior product. This rapid development has had an impact on existing industry players. In 2010, Logitech sales began to drop significantly, and in its Annual Report Logitech highlighted that, “If we fail to innovate in our current and emerging product categories our business and operating results could suffer”.
In 2012, about 40-50% smartphones were sold worldwide and of those have touchscreens. The industry big players such as Google, Samsung, Apple and others are increasingly integrating touchscreens into many of their products. Touchscreens are one of the more significant obstacles changing the landscape for companies like Logitech, who sell mice, keyboards, and other peripherals. In 2013, Logitech declared losses of $1.24 per share in the third quarter and has started embarking the plans to discontinue its non-profitable products.. The main culprit for Logitech is the decreasing importance of hardware and hardware accessories because of the mobilization of computing (Vanderwit, E.n.d)
The great competition faced by Logitech is the result of its success. Logitech computer peripheral products, especially keyboards and mice, dominate the local and international markets. They have long been ahead of this technology over their competitors whether existing or new manufacturers are about to enter the market.
Logitech has dominated keyboard and mouse technology. Hence, such conditions have given their competitors the opportunity to innovate by producing products that can replace the keyboard and mice. In 1994, Apple had released a PowerBook 500 laptop that used trackpad instead of mice. David Morgenstern, D. (2014).
2.0 SWOT Analysis
2.1 Environment Analysis
The internal environment
(i) Resources
Financial resources
Logitech has strong and stable financial. Logitech total net sales for fiscal year 2018 increased 16% in comparison to fiscal year 2017. The growth was broad-based across the regions and across product categories. The results of operations for ASTRO have been included in our consolidated statements of operations from the acquisition date. For fiscal year 2018 , ASTRO contributed approximately 2 points to net sales growth. Net sales for fiscal year 2018 increased 16% , 10% and 23% in the Americas, EMEA and Asia Pacific, respectively (Logitech Annual Report, 2018).
Organizational resources
Logitech is focused on research and development activities. They have allocated a huge budget for this activity. They recognize that continued investment in product research, development and design is critical to drive innovation of new and upgrade products, technologies and experiences. In 2018, Logitech allocated $143.8 million on research, development and design, whereas in 2017 and 2016 were, $130.5 million and $113.2 million , respectively (Logitech Annual Report).
Physical Resources
Logitech operates globally and operates in 5 continents. The company has two factories located in Lausanne, Switzerland and in Sozhou, China and has 16 principal offices around the world. Logitech also contracts with various distribution services throughout the world for additional warehouses in which they store inventory. Logitech also maintain marketing and channel support offices in approximately 62 locations and 40 countries, with lease expiration dates from 2019 to 2028 (Logitech Annual Report, 2018).
Capabilities
The Employees
Our employee development program (“LogiLearner”) offer employees the opportunity to build skills and gain knowledge relevant to their lives as a whole, including their lifestyle. LogiLearner has a dedicated website, which provides a wealth of learning opportunities, so employees can learn in a way that fits with their schedule. From short videos to book summaries, there is something for everyone’s preferred learning style. Logitech also have a dedicated training center at their manufacturing operations to ensure engagement and capability-building of front-line workers.
The Technology
Logitech precedes other competitors in terms of technological advances in the manufacture of computer peripherals, especially the keyboard and mouse. They have manufactured these peripherals with high quality and have unique and sophisticated features. Logitech decades-long expertise in key engineering disciplines such as sensors, acoustics, optics, wireless, and power management is a core competitive advantage. Furthermore, Logitech extend their capabilities into more advanced technologies such as software, apps, cloud, data analytics, machine learning and artificial intelligence. Logitech’s engineering team has expertise in developing products for a broad array of platforms such as PCs, mobile and personal voice assistants (Logitech Annual Report).
2.2 The External Environment
Political/legal factor
Generally, the political environment is linked with economic stability. Political instability can lead to chaos and disruption of supply chain. Political condition can have a deep impact on the operation of an industry. Logitech have a factory and suppliers in China, as well as other country. In the recent years the political environment in China has remained stable which means no disruptions and conducive of doing business. These political changes have both short- and long-term impact on the market conditions. Political stability ensures several things apart from continued supply and good sales. It also ensures that companies can do business without any fear of losing profits and sales.
Sociocultural factors
The social and cultural trends deeply impact the PC popularity and sales. With the rise of social media, people’s taste and preferences has move towards products that provide better mobility. People have started using mobile devices with large screens that can provide both connectivity and options to surf the internet. Smartphones and tablets are more in use as people can updates on social media on the go from anywhere. Nevertheless, in the Asian country where PC was initially seen as a tool for home computing, entertainment and gaming purposes.
Logitech is driven by employees of various citizens, especially offices and factories located outside the headquarters. These workers come from different socio-cultural backgrounds. Society’s culture and way of doing things impact the culture of an organization. Shared values and attitudes of the population play a great role in how marketers at Logitech International S.A. will understand the customers of a given market and how they design the marketing message for Computer Peripherals industry consumers.
Technological factors
Technological factors are very important when it comes to PC peripheral sales. The biggest technological revolution that has impacted the PC market is the increased popularity of the mobile technology. The increased sale of smartphones and tablets has impacted the PC industry deeply. The popularity of mobile technology has proved not favourable for the PC peripherals. It is being predicted that increased use of mobile technology may be killing the PC industry slowly (Pratap, A. 2018).
Economic factors
Logitech exposed to the inflation rate, savings rate, interest rate, foreign exchange rate and economic cycle. These factors determine the aggregate demand and aggregate investment in an economy. While micro environment factors such as competition impact the competitive advantage of the firm. However, there are other factors like production costs, labor costs etc. that affect the profitability. It is the primary reason that most PC makers have shifted production to China where labor and raw material costs are considerably lower. Moreover, with economic revival the situation in Asian markets has grown a lot better.
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