Logitech’s case study is about how it has configured itself as global corporation and reaping the benefits of doing so. Logitech is known for their innovative computer accessories, the quality of their product offerings and the low prices associated with them. This value is used as a strategy by Logitech. The company has the difference of its cost of production and the value that consumers perceive in it products. Logitech also uses differentiation strategy as well so it can compete and attain a competitive advantage over its rivals. It does this by the design of its products. Logitech outsources components of its businesses in order to add value. Having resources in places where comparative advantage is a factor keeps prices low
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In a world without trade the cost would for products would increase for American consumers because economies of scale could happen so costs from producing would be high. Economic growth would be small as well because markets would be limited which intern would discourage new developments for products and there would be no need for businesses to engage in cost saving processes. Logitech wouldn’t be able to use cheap labor and assembly from China or Taiwan or have the use of the most efficient markets. Value creation would be lose because the best locations for activities of its operations wouldn’t be available causing prices of its products to increase and less able to compete against competitors because there would be no differentiators.
Explain how trade lowers the cost of making computer peripherals such as mice and keyboards.
Trade helps in reducing the cost of producing because it allows the manufacturing process to be done where it is the cheapest and where it can be assembled for the best price as well. This is achieved by finding low labor cost countries. Products and services can be sent to customers by using the most efficient shipping methods and routes. Services can be outsourced to specialists who may be cheaper than employing them full time.
Here in the case study is how it is done by Logitech in order from them to be able to offer their mouse for $40 in America. They have Ireland design their computer mouse because they