Case Study – Logitech

LOGITECH

Best known as one of the world’s largest producers of computer mice, Logitech was founded in 1982 in Apples, Switzerland, by two Italians, Giacomo Marini and Pierluigi Zappacosta and a Swiss, Daniel Borel. The latter two met while studying at Stanford, and Giacomo Marini joined after a career with IBM and Olivetti. The founders had a global vision from the start. The company did not follow the traditional preference of start-ups to target niche markets. Within five years of inception Logitech had operations in three countries (Switzerland, USA and Taiwan), including research and development and manufacturing. The company now generates annual sales of more than $1.5 billion, mostly from products such as mice, keyboards and low-cost video cams that cost under $100. Logitech made its name as a technological innovator in the highly competitive business of personal 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 its competitors by continuing innovation, high brand recognition and strong retail presence. Less obvious to consumers, but equally important, has been the way the company 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 (primarily 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. There are 450 employees in Fremont and some R&D work (again, primarily software programming) is also carried out there. 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...