Question

Logitech became a leader in computer peripherals by developing innovative products and focussing on the consumers’ experience. Between 2007 and 2010 alone, Logitech received 11 different awards for 19 products in 14 categories. In a market that was saturated with deep pocketed competitors such as Microsoft and Phillips, Logitech used innovation as its means of survival.

In 2010, Logitech faced a significant challenge in the changing way people interacted with their devices. The iPhone and iPad used touch-screen technology with built-in accelerometers, eliminating the need for mice and trackpads. Secondly, cameras and high quality speakers become standard equipment built into the iPhone, iPad and Windows computers. Apple introduced the magic pad to replace the mouse altogether. The need for consumers to buy add-on peripherals was slowly evaporating as more of the peripherals become standard equipment designed into the new digital technologies.

Logitech could see its peripherals market someday disintergrate before its very own eyes. Logitech needed to decide if it should invest more in video conferencing and television all-in-one remote controls and/or focus on developing partnership with computer and telecommunication manufacturers and mobile carriers such as AT & T, Verizon, T-Mobile and Sprint. Once again the computer industry was changing and Logitech needed to formulate diversification strategies to ensure its long term survival.

Question :

SWOT ANALYSIS A brief introduction of SWOT that can be perceived from Logitech. Any description will suffice for putting forward the internal and external analysis of Logitech.

(1000 Words)

Answer 1

Logitech is one of the leading companies in its industry.Logitech maintains its renowned position in marketing by imperious analyzing the SWOT analysis.This is a deliberate planning tool that can be used by Logitech to do a situational analysis of the company.Its a very easy technique to evaluate the present Strength(S),Weakness(W),Opportunities(O) and Threats(T) Logitech is facing its current business domain.SWOT analysis is the highly synergistic process and requires effective coordination among various departments within the company.The SWOT analysis enables the managers of the Logitech to develop 4 types of strategies:

1. ST(Strength-Threats) Strategies
2. WT(Weakness-Threats) Strategies
3. SO(Strength-Opportunities) Strategies
4. WO(Weakness-Opportunities) Strategies

The key cause of SWOT analysis is to identify the strategies that a company can utilize to exploit external opportunities ,counter threats,and build on and protect Logitech strengths, and eliminate its weakness.

• Strengths:Strengths not only help to protect the market share in existing markets but also help in suffocating new markets.Logitech has many strengths as one of the leading companies in its industry that help it to succeed in market place.Some of the strengths of Logitech are:

1. Best Performance: Logitech has build expertise at entering new markets and making success of them.The development has helped to build new revenue stream and expand the economic cycle risk in the markets it operates in.
2. Robust Brand Portfolio: Logitech has invested in building a powerful portfolio over the years.Logitech emphasizes this fact. It would be very useful if the organization is ready to develop the new product listing.
3. Strong Free Cash Flow: Logitech has strong free cash flow that provides resources in the hands of the company to expand into new products.
4. Authentic Suppliers:It has a very powerful base of well-grounded suppliers of row materials thus enabling the company to overcome any supply chain.

• Weakness: These are the areas which can be highly improve upon.Using SWOT analysis weaknesses are the areas which can be improved and build on its competitive advantage and strategic situation.Some weaknesses are:

1. There are gaps in the product range sold by the company. This lack of choice can give a new competitor foothold in the market.
2. Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
3. Need more investments in new technologies.Given the scale of expansion and different geographies the company is planning to expand into,Logitech needs to put more money in technology to integrate the processes across the board.
4. Financial planning is not done efficiently and properly.

• Opportunities:Some opportunities are

1. Lower Inflation rate: The low inflation rate bring more stability in the market,enable credit at lower interest rate to the customers of Logitech.
2. Opening up of new markets because of the government:The adoption of new technology standard and government free trade agreement has been provided Logitech an opportunity to enter a new emerging market.
3. Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Logitech products thus providing and opportunity to the company.
4. The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players.

• Threats:

1. Rising row materials can pose a threat to the Logitech profitability.
2. The company can face lawsuits in various markets given- different laws and continuous alteration regarding product standards.
3. Rising pay level especially movements such as $20 an hour and increasing prices in China can lead to serious pressure on profitability.
4. New environment regulations on Paris agreement(2016) could be threat to certain existing product categories.