Strategic Management in Logitech. Essay Example.

2021-07-05 01:20:18
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University of Richmond
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Essay
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A. Executive summary

The selected case is case 21; Logitech: Finding success through Innovation and Acquisition. Logitech was the worlds leading provider of computer peripherals back in 2010. The case has primarily looked into how Logitech sought for success through innovation and acquisition. The primary stakeholders of the Logitech company include; its employees, investors, customers, partners, and suppliers. I chose Logitech Company mainly because of its reputation and its experience (Jolly & Bechler, 1992). It is a leading corporation that has its highs and lows but has managed to rebound back and good operations. In particular, I am impressed by the manner in which the corporation made successful acquisitions and merges and innovation to remain abreast despite the overwhelming competition in the industry and the changing nature of the market.

B. Statement of the core problems

Logitech despite successful has been hit by certain strategic issues and problems that drew it back and made it loses its glory as a leading corporation in the industry. From the case, I can pinpoint the specific issues facing the company. They include;

Changing nature of the personal computing industry: it is no doubt that technology is changing and advancing at unprecedented pace. Consequently, there are more and more firms that getting into the market and offering similar products at much lesser prices and their products are similar or even better than the current products and thus negatively affecting the industry. This is one main problem that is facing the company.

Increased competition: the three main competitors are the creative technology limited, Royal Philips Electronics and the Microsoft Corporation (Rauterberg, 2003). They share the market and thus reducing the market share for each of the firms and thus a strategic issue.

The recent recession: the recent recession hit the company hard.

C. Recommendations

For every problem, there is always a solution and therefore, even for the above issues that have been noted to be affecting Logitech Company, there are possible solutions that when effectively embraced and implemented can mitigate the issues. The recommended action plan for the above issues includes the following;

Changing nature of the personal computing industry: the company should engage in more and more research and development.

Increased competition: diversification of their products

Recent recession: in times of hard economic times, they need to offer subsidies, reduce prices or engage in calculative pricing that will enable them to attract customers even during the hard times.

D. Analysis

I used the Root Cause Analysis (RCA) and the SOAR (Strengths, Opportunities, Aspirations, and Results) strategic tools analysis techniques. I chose these techniques to help me arrive at my recommendations. I selected them because, in this strategic analysis I needed to deep deeper into the problem to identify and specify the problem correctly, be able to analyze the cause, verify the causes and determine the corrective actions. The Root Cause Analysis tool helped me in the identification of the exact problem, while the SOAR analysis tool helped me identifying the strengths that can be accrued from the problem and the opportunities that can be utilized to attain the aspired results (Hitt, Ireland & Hoskisson, 2003).

Before looking into the problems, I first found out about the company and found out that; the company is headquartered in Romanel-Sur-Morges in Switzerland and is a long standing corporation with an exquisite reputation for quality personal computing products at affordable prices (Jolly & Bechler, 1992). However, despite its enviable position in the industry, the corporation just like any other corporation is coupled with myriad challenges, in particular, the recent recession coupled with the changing face of the personal computing industry (Cole, 1997). The company will have to devise a new mechanism to compete in a world where its products and services have become standard fare on most personal computing devices.

The first problem that I found out from the case was the changing nature of the personal computing industry. I was able to determine with the help of the RCA tool. The main company products are computer periphery materials such as keyboards, joystick, headphone, mouse and digital camera. However, as time elapses the needs and demands of the consumers are increasingly changing. Consumers are now more much aware and need value for money. Most of the current computer devices are inbuilt, and thus the market for peripheral devices is fast reducing. They need something that is convenient, and that is affordable. Therefore, the fast changing face of personal computers is the first strategic issue that it needs to address. I then resorted to using the SOAR tool to determine the possible mitigation for the problem. I found out that through research and development, they will be able to determine the specific needs and wants of the customers and produce products that meet their current needs and wants regarding computer peripheral devices. They should also partner with other technology firms who are producing the personal computers, for them to produce products that will match these computers.

Increased competition was the second problem I identified through RCA tool. The technology industry is growing, allowing new firms into the market. Many similar firms are offering similar products and therefore, to sail out of this challenge I found out through SOAR that they need to diversify their products to offer more products and services to increase their share in the market. For instance, they can get into production of software.

The final issue facing the company was the effects of the 2008-2009 global financial crisis was felt by the company. People were financially unable to make purchases of the products because of their economic situation. The demand for the products offered by Logitech mainly depends on the economic stability of its consumers and the income of its consumers and also the profitability of its business customers. The recommendation that I came up with after using the SOAR tool was that in times of hard economic times, the company need to offer subsidies, reduce prices or engage in calculative pricing that will enable them to attract customers even during the hard times.

 

References

Cole, G. A. (1997). Strategic management: Theory and practice. London: Thomson Learning.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2003). Strategic management: Competitiveness and globalization: cases. Australia: Thomson/South-Western.

Jolly, V. K., & Bechler, K. A. (1992). Logitech: The mouse that roared. Planning Review, 20(6), 20-24.Rauterberg, M., INTERACT, International Federation for Information Processing, IFIP TC.13 International Conference on Human-Computer Interaction, & INTERACT '03. (2003). Human-computer interaction. Amsterdam [u.a.: IOS Press.

 

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