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Paper Topic:

LOGITECH

1 . In a world without trade American consumers would have to pay more for Logitech products as it would be more expensive to manufacture locally with high interest rates , scarce and expensive raw materials and most of all high labor cost . Without international trade manufacturing and production is limited and dependent on local demand Excess production could mean the ruin of a company . While with international trade , new markets are opened and can be explored , there is unlimited demand . Production is increased as the surplus from local consumption is exported

2

. In Logitech 's case , moving manufacturing in Asia proved to be beneficial in terms of lowering costs due to abundant cheap labor boosting up production volume . Raw material and suppliers are also based in Asia further decreasing time for production . The end result would be cheap imported finished products available to consumers all over the world

3 . Theory of comparative advantage states that if one country is better at producing one good and another country is better at producing a different good then they should trade

Logitech manufacture in China and Taiwan as both countries have a comparative advantage on cheap labor cost . Undertake basic R D in California and Switzerland as these places have a comparative advantage in R D and home to many high technology enterprises .Ireland has a comparative advantage in design as It has the largest range of art and design degrees in the State , undergraduate and postgraduate level . While marketing and operations are done in California as almost all related industries are based in California

4 . Both create value for Logitech in their own respective specialties Because what matters is how easily the workers in China can produce and how fast the people in Fremont can market and deliver the products to its consumers . Neither can work without the other

5 . The company decided to shift its corporate headquarters from Switzerland to Fremont to be close to American high-technology enterprises also based in Fremont . With this strategy , marketing finance and logistics operations can be easily done as related and supporting industries are within the area

6 . The four attributes for a nation to comprise porter 's diamond of national advantage are

factor conditions (i .e . the nation 's position in factors of production such as skilled labor and infrastructure

demand conditions (i .e . sophisticated customers in home market

related and supporting industries , and

Firm strategy , structure and rivalry (i .e . conditions for organization of companies , and the nature of domestic rivalry

Factor condition- high volume and low cost manufacturing is possible as Taiwan is rich in cheap and skilled labor and with the space provided in its science based industrial park , supplies for parts needed are readily available . Thus giving Logitech a competitive advantage

Demand conditions-Taiwan also has a rapidly expanding and discriminating computer industry to which would become an instant market for Logitech 's products . Satisfying such competitive and discriminating market would ensure Logitech 's high quality and carve a big piece of...

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