Logitech Essay Example | Topics and Well Written Essays - 1000 words

Logitech - Essay Example The company's retail sales and marketing activities are classified into three geographical divisions namely Americas (including North and South America), Europe-Middle East-Africa, and Asia Pacific. In order to minimize production costs and take advantage of the other benefits of business process outsourcing, it has set up its manufacturing plant in Suzhou, China in 1994. Other productions are outsourced from different countries in Asia. During the fiscal year 2007, it reports revenue of $2.06 million and net income of $.229 million (Logitech Annual Report 2007). The mission statement of Logitech is communicated as follows: "Logitech brings to market tools that enrich the interface between people and information" (Logitech Company Profile 2008) This emphasizes the business organization's commitment in focusing on computer peripherals. However, it should be noted that it did not limit itself to its current lines indicating its openness to changes and willingness to respond to emerging consumer needs. The company' strategic intent can be seen through its growth outlook presented in its 2007 Annual Report. Logitech communicates its major strategy of innovation in order to sustain steady growth and development. The company's goal is to further develop new products and improve existing ones in order to maximize consumers' comfort. Also, the business organization is keen on focusing into growth markets in order to drive revenue. c. Problem Identification The United States is one of the major markets of Logitech. Even though it cannot be possibly identified how much share this market has in the company's revenue, it should be noted that the forecasted economic recession in US will adversely reflect in the company's operation. Logitech thus, needs to take this into in order for it to continue its highly profitable operation. II. Environmental Analysis a. External Environmental Analysis In general, the operation of Logitech is dependent in its ability to introduce innovative products in the market noting that the information technology market is subject to fast product obsolescence. Since the company has global coverage, it is also exposed to the fluctuations in the exchange rates. The weakening of the dollar due to the economic recession makes its income in the United States lower when expressed in Swiss franc. The industry environment of Logitech can be assessed through the use Porter's Five Forces model. Buyers. The evolution of a hypercompetitive business environment heightens the bargaining power of consumers. It should be noted that sales are directly affected by consumer demand. Thus, consumer needs should properly be identified and products should be created to best respond to these needs. Suppliers. Supplier power is also high in the market where Logitech