In a world without trade, what would happen to the costs that the American consumers would have to pay for Logitech’s products? 1. American consumers would pay significantly higher prices in a world without trade, but at the same time they would save their jobs. When production of computers shifts to low cost locations, critics argue that the U. S. economy would suffer. However, as the research later shows, the opposite is true, in principle at least.
As a result from the lower cost productions supporting new investments in the industry, prices of computer hardware decline. Promotion of computers through the U. S. market is fast, which allowed companies to use computers to their operations and increase productivity. In a world without trade production, assembly, resources, and sale of their products would all have to be conducted in the US, where cheap labor and assembly don’t exist (unless you hire illegal immigrants, that is).
Logitech Case Essay Example
On the other hand, due to the globalization in the production of information technology, the prices of several products declined, and reached businesses and households faster. In addition, it caused growth in two related industries: computer software and services. QUESTION 3: Use the theory of comparative advantage to explain the way in which Logitech has configured its global operations? Why … Theoretically, the differences in labor, capital, technology, education, talent, natural resources, etc. , create a comparative advantage that is essential to the cheap manufacturing of some goods.
In this manner components are procured from or manufactured in any part of the world (outsourcing is a key component of economic growth in many developed nations) where they are produced at acceptable prices, and ultimately assembled at specific location abroad at the best cost for the producer. Porter’s diamond of competitive advantage theory suggests that firms like Logitech should lobby governments in order to adopt policies that make their growth easier. QUESTION 4: Who creates more value for Logitech – the 650 people it employs in California and Switzerland, or the 4000 employees in its Chinese factory?
What are the … Clearly, free trade is beneficial to corporations and consumers (in principle). Fee trade is beneficial because labor costs can be substantially lowered. The employees in Fremont, California (450 employees) and Switzerland (200 employees) create more value, while the ergonomic design for Logitech takes place in Ireland. The final products are manufactured in China by 4,000 employees. QUESTION 5: Why do you think the company decided to shift its corporate headquarters from Switzerland to Fremont? The headquarters were moved because of the company’s global marketing, finance, and logistics operations.
Probably, Logitech moved from Switzerland to Fremont because it is a more cost-effective location (closer to technological innovation, skilled, dynamic engineers and programmers) for their production of computer peripherals. Moreover, U. S. specializes in R&D. To what extent can Porter’s diamond help explain the choice of Taiwan as a major manufacturing site for Logitech/ There are four parts to Porter’s diamond in Taiwan: factor of endowments consisted of a science-based Industrial Park in Hsinchu. The demand conditions included the previous training of the Taiwanese in technology.