The company is: “Logitech”
Research the firm’s value chain and its diversification strategies. Look for opportunities to improve competitive advantage and ROIC through vertical integration or outsourcing. Research the levels and types (related versus unrelated) of product diversification in their product lines or services. Look for strategic rationale in building the “portfolio” – what capabilities and competencies are being leveraged and how? Also, look for vehicles of diversification –acquisitions and mergers, joint ventures, strategic alliances, and partnerships that are associated with vertical and horizontal integration. This discussion should differ from last week’s vehicles of diversification section, which focused on using vehicles for regional expansion.
Analyze the information in the context of diversification strategy frameworks presented in the readings.
Based on an understanding of the firm’s competitive advantage, what is being leveraged vertically and horizontally, and how is diversification of the firm shaping its competitive advantage? How is it shaping the firm’s ROIC in the short run versus the long run (i.e., over time)? Again, attempt to find changes to this metric in correspondence with these types of decisions being made within the company.
NOTE: Horizontal integration basically means acquiring or merging with competitors at the core competency level of the organization or in completely unrelated industries. Vertical integration means taking on the activities of suppliers or buyers in the industry’s value-added chain.
Report your findings as a description of the firm’s Value Chain and Diversification strategy. Include critical analysis of the observed strategy, including the rationale for outsourcing business functions. Can strategy alternatives be used, in related or unrelated industries, that better fit the company’s environment? Is there diversification opportunities that require capabilities investments not yet considered?
UTILIZE THIS FORMATTING
Value chain analysis (i.e. the core level of the organization) both primary and support activities required
Value-Added chain (i.e., Vertical integration or how they have diversified out from their core activities)
Upstream
-Vehicles for diversification
Downstream
-Vehicles for diversification
Evolution of their Horizontal integration practices
-Vehicles for diversification
Related and unrelated diversification – explain which strategy they use
Outsourcing activities – what business functions do they outsource? what should they outsource?
ROIC and other metrics (over time how has their integration strategies impacted their accounting and financial metrics)
Impact on their competitive advantage
