"Case studies YEARAnswer 2: Using the theory of comparative advantage the following explanation can be given in the way inwhich Logitech has configured its global operations.1. Logitech has reaped the comparative advantage of high technological inputs at low cost byinvesting and setting up its operations in Taiwan. Actually Taiwan had technological high gradedpopulation. Although the labor cost is very low in the country mainly due to the currencydifferentiation. Thus the company took the benefit of comparative advantage and set up itsoperation in Taiwan.2. The Company earned the low cost benefit as compared to western countries by setting up itsoperations in China. China had enormous labor power which is very low cost. This way Logitechtook advantage of such situation and earned high level production output at a very low cost.3. The Company earned the competitive advantage of distributing the products by making itsmarketing head office in Fremont, California in United States of America, even when its headoffice is situated in Switzerland. This way attempts are made to remain close to the buyers of thecompany products in the United States such as Apple and IBM.Various competitive advantages gained by Logitech include the followings.1. The Company manufacture in China helped in gaining low labor cost advantage wherein ahuge amount of output was produced at relatively lower costs.9 Case studies YEAR2. The Company manufacture in Taiwan similarly helped in gaining the advantage of highskilled labor at low costs.3. The Company took the R&D in California (United States) with a view to keep in touch withthe requirements of the customers of the company that is Apple and IBM so that the productimprovement and differentiation can be done at the soonest as per the demand of the byers.4. The Company took the R&D operations in Switzerland so that the requirements of all theglobal customers specifically European customers can be understood and the products can bedeveloped accordingly. 5. The Company took the designing of the product in Ireland with a view to achieve low inputson costs and high results from the attractive and innovative designs produced in the country.6. Finally the Company took the coordination marketing and operations from California to stayin regular contact with its customers that is Apple and IBM. This way the customer demand wasimmediately responded with the appropriate outcome.Answer 3: The 650 people who are employed to Logitech in Fremont (U.S) and Switzerland helps incoordination, controlling and also in Research and Development process. They create businessfor the company. On the other hand the 4000 employees working in the Chinese factory helps inlow cost production process which helps the company sustain in the global competition.Although both tries to create value for Logitech, however the role of Chinese employ who help10 Case studies YEARthe Company sustain in the high competition through low cost labor inputs should be consideredcreating mroe value for Logitech. That is they actually give maximum returns to the Companythan any other employee in any other country. For example, the $40 Wang mouse sold toAmerican customers has only $3 as share of investment in Chinese outlets in the form of wages,power , transportation and other overhead costs. The rest goes to suppliers that is $14,shareholders and distributors that is $15 and profits to Logitech that is $8. Thus only $3 input inChinese outlets gives away $40 product to the company.The implications of this observations for the argument that free trade is beneficial has beenproved correct as the company only has to pay $3 as factor costs to get a product ready to be soldat $40 to the American customers.Answer 4: The company decided to shift its corporate headquarters from Switzerland to Fremont, because itwanted to remain in contact with the customers and buyers of the Company's product andservices. Apple and IBM are the main buyers of the company product and services. Through acorporate headquarter in Switzerland a close contact and review of customer demand at regularinterval was not possible. Due to this reason the company took efforts in opening its marketing corporate office inFremont. Also the customers of United States of America would reap maximum benefit for thesale of the company products and services than any other place. Thus moving its marketingheadquarters to the United States proved beneficial for the company in the long run.11 Case studies YEARAnswer 5:The Porter’s diamond or the five forces model includes the five forces that rules the market andhence brings the competition intensity and attractiveness of a market. Thus, every organizationhas to pass through all these forces and the one, which pass these tests, becomes the ruler of themarket, or maintains its position in the market for a longer period. The Porter’s diamond helpexplain the choice of Taiwan as a major manufacturing site for Logitech which is as follows.1. Factor conditions:The Factor condition includes the human, capital and other physical resources. The factorconditions in Taiwan are supportive to the Logitech's requirements of technologically upgradehuman resource and availability of high class machinery. This way investing in Taiwan resultedin supply of the low cost human resource and physical resource which are actuallytechnologically upgraded.2. Government:The Government of Taiwan has issued such laws and regulations that allows FDI or ForeignDirect Investments. Thus making investment in Taiwan required less paper work and pre- requisites which further facilitated the whole process of investment and business operation in thecountry.12 "