The international trade has been revolutionized by technological advancements, connectivity, liberalization of trade and globalization. Differences in the opportunity costs of production explain the comparative advantage theory. The theory applies where a country is able to produce goods at a small opportunity cost than another country.
The costs American consumers would have to pay for Logitech products would increase significantly Logitech by porter diamond a world without trade. This is due to the face that production, assembly, resources, and sale of their products would all have to be conducted in the US.
Logitech would no longer be able to rely on China for cheap labor and assembly, or Taiwan for efficient and cheap manufacturing. Therefore these increased expenses would require a rise in retail price for the consumer.
Explain how trade lowers the costs of making computer peripherals such as mice and keyboards. Trade helps in reduction of product prices due to following reasons: Motorola plant in Malaysia makes the mouse's chip; Agilent Technologies supplies optical sensors?
The intellectual capital going into any product is created at the place where the right talent is available. Assembling is done in Taiwan and China? The products reach the customers the most efficient way by taking the services of the most efficient logistics company. Marketing and operations from Fremont 3.
Use the theory of comparative advantage to explain the way in which Logitech has configured its global operations. Why does the company manufacture in China and Taiwan, undertake basis R in California and Switzerland, design products in Ireland, and coordinate marketing and operations from California?
Manufacturing takes place China and Taiwan because they have cheap and qualified labor, a well developed supply base, and a rapidly expanding consumer market. These factors of endowments make China more productive at making computer peripherals.
Basic R takes place in California and Switzerland because workers are more skilled and productive at R. Logitech designs products in Switzerland because this is where their most skilled designers are located. Since California also houses many large corporation, it makes perfect business sense for Logitech to have their marketing operations here.
Who creates more value for Logitech, the people it employs in Fremont and Switzerland or the 4, employees at its Chinese factory? What are the implications of this observation for the argument that free trade is beneficial? Hence the value added by R people is greater. Free trade is beneficial because, it is the free trade which is allowing Logitech to take advantage of the low cost manpower available in China.
If free trade w ere not available, Logitech would be forced to manufacture it's mice in U. Why do you think the company decided to shift its corporate headquarters from Switzerland to Fremont? It helps Logitech to stay close to its customers. It can respond to the demands of the customers more promptly.
Fremont is also the place where a lot of technological innovations are happening. Logitech being in the high-tech industry, continuous innovation is a key success factor for its business. Fremont is also an important in terms of managerial talent.
All these reasons make it convenient for Logitech to move to Fremont. Porter's diamond considers four important attributes which will create an environment that helps the domestic industries.
The four tributes can be applied to Taiwan becoming a manufacturing hub for electronics goods as shown below: Taiwan has well qualified people for manufacturing electronic goods. It has good infrastructure and transport facility. There is demand throughout the world for electronic products produced in Taiwan.
All major global companies source their electronic components from Taiwan. Relating and supporting industries:Michael Porter developed Porter’s Diamond, also known as The Diamond Model, in in his book ‘The Competitive Advantage of Nations’. The four determinants of Porter’s diamond must operate as a system rather than individually.
Shop Amazon's Deal of the Day, Lightning Deals, and Best Deals, featuring hand-picked deals with low prices on top products updated daily. Industrial parts shipped the same day you order, so your machines are never down. May 28, · The Porter’s diamond theory can also be used to explain Logitech’s global value chain.
The factors in the theory apply to locations where the company plants are located. The availability of related and supporting industries in Silicon Valley and Taiwan is an advantage to the company. The diamond model of Michael Porter for the Competitive Advantage of Nations offers a model that can help understand the competitive position of a nation in global competition.
It explains the reason to why some areas or more generally, countries are good In particular Industry and what Is the mall reason behind such business being a success. Keiser is revolutionizing fitness with our pneumatic training system and indoor cycles, including the award-winning M3.
Because good enough isn’t.