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Logitech International SA - Case Study Example
Being in the production of computing accessories, the operation of Logitech is highly dependent in its capability to design and manufacture innovative products in the market. This is due to the fact that information technology products are exposed to the risk of fast product obsolescence…
The ability to innovate is a key success factor which determines the performance of a business organization (Logitech Annual Report 2007). Bringing the products in the market at the right time enables a company to outperform its competitors and survive in a very risky market.
Logitech is operating in a global landscape exposing it to the fluctuations of exchange rates (Logitech Annual Report 2007). This exchange rate risk makes the company vulnerable to the changes in value of currencies. For instance, the weakening of the dollar due to the economic recession makes its income in the United States lower when expressed in Swiss franc. This in turn can make investors wary in investing in Logitech noting that exchange rate fluctuations can shrink the company's revenues and profits when expressed in Swiss francs.
Economically speaking, the company is also exposed to the recession in the United States and the food crisis happening in Asia. It should be noted that these are Logitech's major markets. As the disposable income of consumers in these regions is squeezed, IT products become unappealing as they turn to allocating budgets for basic necessities like food and medicine.
The whole IT industry is poised to benefit from the economic development of countries like China and India.