Mia Therese U.

Arias
Angelica Ballesteros
Angelica Bernardo
Maria Lou Atioan
Carmelo Alvendia
4-AOM

CASE ANALYSIS: LOGITECH


I. Title of the Case

Logitech
II. Time Context
Monday, January 7, 2014
III. Viewpoint
Logitechs Top Management
IV. Statement of the Problem
How can Logitech expand their production / operations while minimizing their
cost?
V. Objectives
To find a strategic plan on where they will locate their manufacturing plant to
maximize their profit and minimizing their costs.
To be able produce a higher quantity of goods to capture a larger market.
To be able to create a better designed product that will compete with other
computer peripheral producing companies.


VI. Areas of Consideration
Strengths Weaknesses Opportunities Threats
Largest producer of
computer mice.
Known as the
epitome of modern
global corporation.
Technological
innovator in personal
computer
peripherals.
First company to
introduce a mice that
used infrared
tracking.
First to introduce
wireless mice and
keyboards.
Continuous
innovation.
High brand
recognition.
Has low production
Dependence on
the suppliers of
the raw
materials.

Innovate
products and
services.
Opportunities
for Logitech to
expand and
increase
market share.
Opportunities
of producing
new products
and services.
Intense
competition
can lower
Logitechs
profits.
Decreasing
number of
potential
customers
because of
bad economy.
Political Risk
of
governments
can quickly
change
business rules
that
negatively
affect
Logitechs
cost.
Has an effective
R&D facility.
Ergonomics design
of products is being
considered.
China has qualified
people at the
manufacturing plant.
Logitech engages in
location economies
by choosing the best
locations for each of
its operational
actives.
business.


VII. Alternative Course of Action (ACA)
ACA 1 Construct a new manufacturing plant in Mexico
A. Advantages
Easy and fast transport of finished goods (computer peripherals) in the
United States.
Shipping cost is low and fast.
Cheap labor cost.
Skilled workers
Political risk associated with the country is minimal.
B. Disadvantages
Higher labor cost than in other Asian countries.
Mexico has employment laws that impose strong penalties on companies
for laying off employees.
Real estate cost are rising.
ACA 2 Construct a new manufacturing plant in Vietnam
A. Advantages
Cheap labor cost than in China.
Skilled workers.
Cheap transportation cost.
B. Disadvantages
Low labor Productivity.
Struggles in supporting and accommodating large-scale investment
projects.
Low logistics infrastructure (airports, major ports, railroads and railways).
ACA 3 Expand the manufacturing plant in China
A. Advantages
The company will have a lower cost of production due to low labor cost in
China.
Demand of products will be met easily because of the expansion.
Higher production volume.
B. Disadvantages
Transportation cost is high.
Electricity rates are rising.
Increase of corporate income tax rate.
VIII. Recommendation/Conclusion
Categories ACA1
Construct a new
manufacturing
plant in Mexico
ACA 2 Construct a
new manufacturing
plant in Vietnam

ACA3 Expand the
manufacturing plant in
China
Cheap labor cost 4 5 5
Strategic
Location
5 4 4
Skilled workers 4 3 5
Lenient
government
barriers
3 5 4
Transportation
cost
5 4 4
Total: 21 21 22

Legends: 5 being the highest 1 being the lowest
The chosen Alternative course of action is ACA3 Expand the manufacturing plant in
China. ACA 3 got the highest total rate which is 22. The result is based upon the proponents
rating on the criteria in the decision matrix.
Though expansion is costly, the return on investment of the new facilities will increase the
revenue. The expansion does not only focus on the production capacity, but will also expand
product line which is gaming products.
IX. Plan of Action
Person-in-Charge Period Activity
Top management 1 to 2 Years Expand the
manufacturing
plant in China.
R & D,
Production/Operations.
6 months to 1 year Expansion through
innovating gaming
products (such as
mouse for
gamming,
joysticks,
keyboards).

Propose the ACA to the top management.
Once approved, the project will be implemented.
Intensive research and formulation of innovative new gaming products from the R & D
department.
Innovate the features of existing gaming products.
Production of the new and innovated gaming products.
Effective marketing strategies to increase sales.