assignment

Case.pdf

Home >Business & Finance homework help >Management homework help >assignment

Bentley University and Rotterdam School of Management, Erasmus University

Logitech is a long-standing company with a reputation for quality personal computing products offered at a reason- able price. Additionally, Logitech's reputation for being on the cutting edge of technology in the computer peripher- als industry is second to none. This offers the company the enviable position of being at the top of its industry. However, the recent recession accompanied by the chang- ing face of the personal computing industry offer sig- nificant challenges for the future. Logitech may have to find new ways to compete in a world where its products have become standard fare on most personal computing devices. With a reputation for leading the industry; will Logitech find new technologies to conquer, or will it find itself struggling to survive?

Company Background

Apples, Switzerland. Shortly after establishing its quality software development company; Logited{ new hardware product opportunity that was em in the mid-1980s: the computer mouse. The mou~ standard equipment on the original Macintosh com launched in January 1984. Logitech viewed the mou growth opportunity, and this became a turning p~~" the company's future. Logitech introduced its first, ware device, the P4 mouse, for users of graphics so An OEM sales contract with HP followed, and · it entered the retail market, selling 800 units in tt1 month. ln July 1988, Logitech's executives decidedt the company public to help finance its rapid gro

In the early 1990s, while facing increasingly s competition in the mouse business, Logitech iden a larger market opportunity for computer perl als and began growing its business beyond the Ill'

Logitech, headquartered in Romanel-Sur-Morges, Throughout the next few years, Logitech introq " ,-Switzerland,·was-,the-,world!s,-leading-provider-of-com'"'--,,·-products·such-as:-(1}-computerkeyboards;,-(Z)~a--

puter peripherals in 2010. Personal computer peripher- still camera, (3) a headphone/microphone, ( 4) a jh als were input and interface devices that were used for gaming peripheral, and (5) a web camera on a fl navigation, internet communications, digital music, arm. While these new products were introduced home-entertainment control, gaming, and wireless the Logitech name, the company also continued · devices. Derived from the French word logiciel, meaning tion in its core mouse business. New and revoluti6 "software;' Logitech was originally formally established technologies developed by Logitech allowed it tC>J'. in 1981 as a software development and hardware archi- tinue as an industry leader in the mouse and keyb tecture company by two Stanford graduate students in business.

The author would like to thank Tyler Thompson, Heather Wooten, Meagan Foy, Samantha Louras, and Will Hoffman for their research and contributions to this cas , Reprinted by permission of Dr. Alan N. Hoffman, Dept. of Management, Bentley University, 175 Forest St, Waltham, MA 02452. RSM Case Development Centre prepa,r teaching case to provide material for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The author has dis identifying information to protect confidentiality.

Copyright© 2011, RSM Case Development Centre, Erasmus University. No part of this publication may be copied, stored, transmitted, reproduced or distributed in form or medium whatsoever without the permission of the copyright owner.

272

tion, i lio of

B signn It ace webc Tech C'l:- vlll.L.L

tions posit worli

I strat vate innc It aJ de vi th er pro< con1

whi its l ti on per: mec

ue{

grc tai; Lo

Case 21: Logitech: Finding Success through Innovation and Acquisition

In the mid 1990s, the PC market exploded due to the popularity of the Internet and new home/ office soft- ware applications. The growth of the PC industry cre- ated increasing demand for the peripheral products that Logitech produced. The Internet allowed computer users to access new areas, such as music, video, communica- tions, and gaming. From that point forward, Logitech continued to grow both organically and through acquisi- tion, as new opportunities arose to expand their portfo- lio of products.

Between 1998 and 2006, Logitech made a number of significant acquisitions to expand its product portfolio. It acquired companies such as Connectix for its line of webcams, Labtec for its audio business presence, Intrigue Technologies for its ''Harmony,, remote controls, and S!Lrn Devices for its music systems. }JI of these acquisi- tions were accomplished strategically to help Logitech position itself in all aspects of the personal peripherals world.

In addition to achieving significant growth through strategic acquisitions, Logitech also continued to inno- vate and grow its core business. Logitech made significant innovations in the area of cordless mice and keyboards. It also introduced the industry's first retail pointing device with Bluetooth wireless technology. Logitech then expanded its Bluetooth technology to many other products in the digital world, including cordless gaming controllers and a personal digital pen.

Logitech provided consumers cutting-edge innovation while maintaining its product quality. Logitech maintained its product leadership by combining continued innova- tion, award-winning industrial design, and excellent price performance with core technologies, such as wireless, media-rich communications, and entertainment.

Strategic Direction Logitech is in the business of designing and selling the world's best personal peripherals. The company contin- ues to expand both internally and through acquisition to grow their portfolio of peripheral products while main- taining the strength and quality of its core technologies. Logitech is "driving innovation in PC navigation, inter- net communications, digital music, home-entertainment control, and gaming and wireless devices,, (Logitech, 2007).

Logitech strives to continually "deliver landscape changing technology, while keeping a focus on even the subtlest of design details that makes its products personal and its brand cherished by millions of customers world- wide. Logitech will continue to help make interaction

273

with the digital world more personal and rewarding for entertainment in the living room, communications on the go, and personal computing in the office,, (Logitech, 2007).

As a publicly traded company on both the Swiss Exchange and the NASDAQ Exchange, the organization's overall corporate objectives are growth and earnings. Throughout its entire existence, Logitech has continu- ously grown through both innovation and acquisition, while maintaining positive earnings. To date, the com- pany has done well at accomplishing its key objectives. Growing out of these main objectives, Logitech has set several additional objectives, including:

IJ Product leadership B Continued innovation

Award-winning industrial design Ill Strong price performance

Logitech is extremely proactive when it comes to inno- vation. Along with incremental improvement of its core technologies and products, Logitech is also continuously, radically innovating new technologies in the peripherals industry. When Logitech sees a business or electronics industry that is growing rapidly or quickly gaining rec- ognition, it finds ways to design and create innovative peripheral products to complement the products that make up the specific industry. For example; when the gaming industry began to experience recognition and rapid growth, Logitech designed and introduced its first gaming console controller in 2000 (the Logitech GT Force racing wheel for Playstation 2).

Another ofLogitech's significant innovations was the Logitech io Personal Digital Pen. This invention "merges the use of a traditional

a significant amount of information and documentation is stored and archived electronically. This new platform - the digital pen - will "enable the automated transformation of handwritten data into archived information for both consumers and professionals" (Logitech, 2007).

Through new product developments such as these, it is clear that Logitech is very proactive when it comes to innovation. The company wants to be the number one provider of all personal peripheral products in the world, and it strives to be the first to introduce any new and exciting peripheral technologies.

Competitors As a specialized company; Logitech is exclusively in the industry of personal peripherals, which it sells to retailers

274

as well as major computer manufacturers. The demand Trends of such an industry often depends strongly on the eco- nomic stability and income of its consumers, as well as Logitech implemented a strategy of innovation· the profitability of its business customers. This is because with strategic acquisitions to enhance its products technology products like the ones offered by Logitech the technologies and software of other compan~· are often expensive, and individuals and companies are order to create the most advanced, innovative, an reluctant to buy them unless they have the income to do laborative experience for their customers. As Lo so. Within this industry, there are a number of factors has always been on the forefront of mouse and key: that affect Logitech's competitiveness and price structure. technology; it has also been a leader in video confe With respect to market competition, Logitech has three ing technology since the early stages of its moull. major competitors: Creative Technology Ltd., Microsoft computer camera development. Instead of folio Corporation, and Royal Philips Electronics N.V. market trends, Logitech has often created them.

Creative Technology Ltd. is one of the worldwide lead- From 1998 to 2004, Logitech made many impo, ers in digital entertainment products for the personai strategic acquisitions in order to enhance future computer (PC) and the Internet. Creative Technology folios and expand the depth of its peripheral pre) was founded in Singapore in 1981, with the vision that lines. Its first acquisition was the video camera divi~ multimedia would revolutionize the way people interact QuickCam PC, of Connectix Corporation. This led t with their PCs (Creative Technologies Ltd., 2010). The influx of peripherals, such as cameras and wireless c: Creative Technology product line includes MP3 players, eras, and served as a very early introduction to Logit; portable media centers, multimedia speakers and head- current video conferencing division. The second. phones, digital and web cameras, graphics solutions, cessful acquisition was the 2001 purchase of Labtec,, revolutionary music keyboards, and PC peripherals. an audio peripheral maker. . . Creative had a net profit margin of-29.58% in FY 2009 Following the Labtec acquisition, the com~ and -32.82% in the first quarter of 2010. developed a hunger to expand its product focus:

Microsoft Corporation provides software/hardware 2004: Logiti:ch acquired Intrigue Teclrnologies, Inc. products and solutions worldwide. Founded in 1975 by acquisition positioned Logitech as a leader in advan Bill Gates and Paul Allen, Microsoft's core business is to remote-control production. With this, peripherals l create operating systems and computer software applica- denly were able to accommodate more than just co tions (Daily Finance, 2010; Rovi Corp., 2010). Microsoft puter and video game uses. This positioned them for; ,· has since expanded into markets such as mice, key- next acquisition, Slim Devices in 2006, a manufactur ' boards, videogame consoles, customer relationship man- music systems. Logitech used these two acquisitio~,, agement applications, .. server an.~~~~E~g~~Q.~are,~r:isl.~ .. ~~~~s!Jl~!!!!ili:J::JJqs.in~.ss~unit-corporation-irlto .. a-cliYi

--digitarmusicplayers~1nFY 2009, Microsoft Corporation and specialized company appealing to a large gro0: had annual sales of $58.4 billion and a net income of technology users. Finally, with its acquisition of Para $14.5 billion. AS, Logitech was able to combine their peripheral p~

Royal Philips Electronics is a Netherlands-based ucts with the software, video effects, and securityfea ·: company that focuses on improving people's lives Paradial offered (Logitech Acquires Paradial, 2010). T through innovation. Philips is a well-diversified allowed Logitech to deliver a complete and intuitive ... company with products in many different ind us- video conferencing experience for companies of any¥ tries. Products offered by Philips include consumer Future industry trends revolve around content electronics, televisions, VCRs, DVD players, and fax egy and consumer expectations regarding mobile . machines, as wdl as light bulbs, electric shavers and and Smartphone applications. Content strategy invo.l other personal care appliances, medical systems, and decisions about what information and features to ind. silicon systems solutions (Philips, 2010). With this in a product, including those that provide the mostb, diversified portfolio of products, Royal Philips had FY efit or fulfill the most needs; for Logitech, anything.~ 2009 revenues of $30.76 billion and a gross profit of is just noise and dilutes the product. In terms of mo~ $11.59 billion (Yahoo! Inc., 2010). web and smartphone application trends, Logitech. ~

Logitechistheonlycompanyofthisgroupexclusively three options: (1) develop closed partnerships with 1~' focused on personal peripheral products, whereas all of cific platforms (iPhone or Blackberry); (2) produce C.E its competitors have products and resources invested in for each platform; or (3) produce "platform-neut a wide variety of other industries. apps by using the mobile web. ···

Glc As tl ante de sir ers, ~ has< isfy1 FY 2 peril ers, stan< ford ing,< ti on: COmJ contl and ont< in du gro¥. has c

f glob: and· Face and: catic

sell 2 appU

-~fi.illY··~

life < ate I the J ers 1 Logi uses cap a

ence Logi the! regi< Bye: lea di ad di also: 67% pr~CI acco

Case 21: Logitech: Finding Success through Innovation and Acquisition

Global Presence As the global economy expands and becomes more reli- ant on technology, Logitech has seen an increase in the desire for ease of use when it comes to portable comput-

275

booming sales, and in the end, Logitech's good financial health as a company.

Finance ers, games, and video conferencing technology. Logitech The recession in 2008/2009 hit Logitech hard. For the has consistently expanded its product offerings to sat- full fiscal year 2010, sales dropped to $2.0 billion, down isfy this growing demand for computer peripherals. In from $2.2 billion in fiscal 2009. Operating income was FY 2009, 85% of its revenue came from retail sales of $78 million, down from $110 million, and net income peripheral products, such as mice, keyboards, speak- was $65 million ($0.36 per share), compared to $107 mil- ers, webcams, headsets, headphones, and notebook lion ($0.59 per share) in the prior year. Gross margin stands. Logitech has also seen global demand sharpen for fiscal 2010 was 31.9 percent compared to 31.3 percent for devices designed for specific purposes, such as gam- in fiscal 2009. As a result of the economic downturn, ing, digital music, multimedia, audio/visual communica- Logitech found it necessary to restructure its workforce. tion over the Internet, and PC-based video security. The In early 2009, Logitech reduced its salaried workforce company's products combine essential core technologies, globally by 15%. continued innovation, award-winning industrial design, Logitech's stock price spiked to $40 in late 2007 as and excellent value that are all necessary to come out a result of record sales and profits from its successful on top of a rapidly changing and evolving technological launch of iPod-capable peripherals. The iPod peripher- industry. Since its inception in 1981, Logitech has been a als (speakers, docks, and headphones) made the increas- growing player in the technological product market and ingly popular iPod easier to use. But by 2009, Logitech's has distributed products to over 100 different countries. operating margin was 5.15%, far below its 2007 high of

For Logitech, opportunities arose as the desire for 12%, due to increasing price competition. Logitech did global communication increased. The trend of wireless not issue dividends to shareholders; it needed to reinvest and portable communication, such as Skype and Apple's its net income back into R&D and product advertising, Facetime, has opened a window of opportunity for new and also have available capital for strategic acquisitions. and more advanced products to enabie video communi- Logitech has outlined very specific financial objec- cation and conferencing. tives that it seeks to achieve. It aims to realize sales

As computers have aged, Logitech has been able to growth between 13-19% with a gross margin between sell add-on peripherals for users who want to add newer 32-34%. Logitech also intends to invest 5% of its sales applications to their older computers. Logitech success- revenue to R&D and 12-14% to marketing. By continu- fully continues to sell products at the end of the product ously investing resources in research and development, life cycle, such as mice and keyboards, and to gener- Logitech has taken a strategic approach to maintaining

~,,~,ate-profits-to~,fund,-newprodurr·develupment;-,suclrar--lorrg=term-growth-amit'rofitabili-ry.-~~-,~·---,---,-

the new Logitech Revue with Google TV: As consum- ers become more globally conscious and connected, Logitech is able to tailor its products toward the many uses of video communication and high speed Internet capabilities.

Since its founding, Logitech has created a global pres- ence and reputation for its brand and products. In 2009, Logitech's sales were distributed globally; with 45.3% in the Eastern European, Middle Eastern and North African regions; 35.6% in the Americas; and 19.1% in Asia Pacific. By expanding its presence globally; Logitech became the leading provider of personal peripherals in the world. In addition to being an innovator in its industry, Logitech also has maintained reasonably priced products. In 2009, 67% of their sales stemmed from products that were priced under sixty dollars. This innovative mindset, accompanied by reasonable prices, has contributed to

Marketing Logitech began manufacturing mice for Apollo Computers, and later, for HP. These relationships were built at industry trade shows and became particularly important for Logitech's growth and expansion because such clients were not buying just one or two mice at a time - they purchased 25,000. This gave Logitech strong sales right out of the gate. Logitech also developed a logo for its brand that became well known among both corporate customers and the general public as a symbol of innova- tion and quality within the personal peripherals industry.

In 2004, Logitech also signed an agreement with Global Internet Telephone Company and Skype to co- market and promote their products in the United States, Canada and Europe (Logitech and Skype Announce

276

Marketing Agreement, 2004). Pursuant to this agree- which was once widely dispersed throughout . ment, a Logitech headset and 120 Skype minutes were This helped the company maintain lower prices> bundled together into one package and offered to custom- products, increasing its competitiveness. In addit( ers. In addition, the two companies also cross-promoted its China manufacturing facilities, Logitech establis one another on their respective websites. This was a wise second center for R&D in Cork, Ireland - a prime: marketing decision for Logitech because it expanded the tion for innovation in the technology and IT se, brand name and promoted its product to more users, as Second, Logitech also knew the industry was ch Skype was also a booming and expanding company. rapidly and that it would no longer be able to co ·

Logitech has also made very strategic decisions simply by manufacturing computer mice. Logitecfi. regarding the marketing of specific products. Logitech made a strategic operational decision to expand its · recognized that women were a segment typically not tar- uct line beyond the mouse and introduced a varie geted by technology fields in general, and it saw this as a products, including a handheld scanner, Fotom prime opportunity for the Logitech Quick Cam product digital camera), Audioman (a speaker/microphone (Buchanan, 2005). In 2005, Logitech launched commer- Wingman (the first gan1L.1g peripheral). cials for the Quick Cam that targeted businesswomen, These operational decisions not only helped Lo showing a traveling mother using the Logitech Quick remain innovative and competitive within the indu Cam product in her hotel room to say goodnight to her but they also positioned the company for success d·.· children and husband. Logitech recognized that women the personal computing industry boom in the mi do, in fact, embrace technology when it fits their needs, late-1990s, when the Internet and online industries' and demonstrated in its commercials how its product off. Even by that time, Logitech was known as a lea could fit those needs. personal peripheral provider. Logitech was both inn

On a smaller scale, Logitech also made a wise mar- tive, with more than 130 personal computer perip keting decision by giving products a recognizable and products, and reasonably priced. When the PC ind memorable logo. The Logitech logo and branding is vis- took off, Logitech was already established as an irnf · ible on all of its products and has become a recognizable leader, and its sales soared along with the industry. symboi oi quaiity and innovation in the peripherals and Logitech also has become a leader in the wir. technology industries. peripherals sector. By closely following consumer tr~

Logitech initially had a limited marketing budget Logitech saw early on that the personal peripherals se when it first introduced its mouse in the early 1980s. This was moving into a new digital era, where wireless pe · small budget limited promotional activities available to erals were becoming a new trend. Logitech create· Logitech. However, the company made a few key mar- entirely new product category with the Logitech Cord, keting decisions early on that allowed it to wisely imple- Desktop, a wireless mouse and keyboard bundle~~

·-ment-the-budgeti:tfrm:l:-:togitec:hcnose-fcrpos1nonTtSe1r- mg' on top ofilnaieaamg consurrl.er trendS, Logitech at industry trade shows, particularly at Comdex in Las over 100 million cordless mice and keyboards. · ·· Vegas. This allowed Logitech not only to get the Logitech name out within the industry, but gained it several key clients that allowed it to expand and grow.

Operations One of the initial weaknesses Logitech faced regarding operations was that it had numerous manufacturing locations dispersed throughout the world. The prob- lem with having so many locations was that these facili- ties were not cost effective. Many of the facilities were located in countries where it was expensive to operate, and the labor costs for qualified employees were high. Logitech realized in the early 1990s that the personal computer industry was becoming increasingly com- petitive. Logitech thus made two primary operations decisions that allowed it to significantly increase its com- petitiveness. First, Logitech consolidated manufacturing,

The Changing Landscape Ahead~;: Logitech became a leader in computer peripheral~ developing innovative products and focusing on) consumer's experience. Between 2007 and 2010 afo Logitech received eleven different awards for ninet products a..1d fourteen categories (see App. 1\1). market satu.rated with deep-pocketed competitors Microsoft and Philips, Logitech has used innovation its means of survival.

In 2010, however, Logitech faced significant c lenge: The way people interacted with their devices begun to change. The iPhone and iPad used touch sc technology with built-in accelerometers, eliminating'. need for mice and Trackpads. Additionally, camera·~' higher quality speakers had become standard eql! ment built into the iPhone. iPad. and Windows l::intt1

c r b

f r

Case 21: Logitech: Finding Success through Innovation and Acquisition 277

computers; Apple had introduced the «magic pad" to replace the mouse altogether. The need for consumers to buy add-on peripherals was slowly evaporating, as more peripherals became standard· equipment designed into new mobile technologies.

As a consequence, Logitech could someday see its peripherals market disintegrate completely. Logitech must

decide if it should invest more in video conferencing and television all-in-one remote controls, and/or focus on developing partnerships with computer and telecom manufacturers and mobile carriers such as ATT, Verizon, T-Mobile, and Sprint. Once again, the computer indus- try is changing, and Logitech will have to formulate new diversification strategies to ensure its long-term survival.

Appendix I- HistoryTimeline

1981 Daniel Borel and Pierluigi Zappacosta incorporate in Switzerland the company that will eventually be called Logitech.

1982 The company introduces its first mouse, the P-4.

1985 The company enters the retail market with the introduction of the C7 mouse.

1988 Logitech International S.A. is taken public on the Bourse de Zurich; a handheld scanner, the firm's first non-mouse product, is introduced.

1991 Logitech introduces the first radio-based cordless mouse.

1994 The company opens its manufacturing facility in Suzhou, China.

1997 Logitech gains a listing on the NASDAQ and divests its scanner business.

1998 Guerrino De Luca takes over the CEO position from Borel, who remains chairman; the QuickCim PC video camera division of Connectix Corporation is acquired.

2001 Logitech acquires audio peripheral maker Labtec Inc.

2003 Logitech ships its 500 millionth mouse.

2004 Intrigue Technologies, Inc., maker of advanced remote controls, is acquired.

Source: Logitech, 2007

Appendix H - Market Segments

Source: Logitech estimate based on available market data.

Appendix m - Global Economic Trend Analysis Household Debt Service Payments as a Percent of Disposable Personal Income (TDSP)

Source: Board of Governors of the Federal Reserve System

14.0

13.5 -_·,

'+;" 13.0 s:: Cl> u 12.5 -Q;

'1 E::. 12.0

'':,:.

11.5

11.0

10.5 1980

Source: Yahoo! Finance, 201 O

.l <~~i ·------- ----------11------r"

,'·l :

~ . ·'2 H

,;~ _. "' 1\ /Mc=/ '1.,.-,:·i

,·J,:r:

'2:~ ''··{/~

---,--+-, \ -;'-----·--

-+------ v~r

1985 1990 1995 2000

Shaded areas indicate U.S. recessions 2009 research.stiouisfed.org

2005

~· :-"i

,:;i

2010

278

Appendix IV - List of Innovation Awards

• CES Innovations 2010 Honoree (7 categories)

• iF Product Design Award 2010 (1 product)

• CES 2009 Best of Innovations Category Winner (2 categories)

• CES Innovations 2009 Honoree (5 categories)

• 2009 red dot Design Award (1 product)

• Good Design Awards 2008 (4 products)

• CES 2008 Best of Innovations Honoree (1 product)

• CES Innovations 2008-Design and Engineering Showcase Honors" (6 products)

• iF Product Design Award 2008 (2 products)

• 2007 red dot Design Award (2 products)

• Good Design Award 2007 (2 products)

.AppendixV-lnternet Usage in China

Internet users People with access to the Internet.

300Mj

250 M

; l

200M I /

I j I

·-~L---1~~50~M~~·-~-~-~------~---~--------~-~------~--~~~7--~~~--~~-~1-~~ /

100 M

SOM / _,,/'

,../

// ,/

,/"/ / ,,,,,,,

,/''"" //

#'"' ...... ·"

01, --~ ,I 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Data Source: World Bank, World Development Indicators. Last updated July 26, 2010

Source: ADV!

Appendh

[

Source: Ya

Case 21: Logitech: Finding Success through Innovation and Acquisition

Appendix VI- Logitech Price Performance

Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10

Source: ADVFN

Appendix VJI - Logitech Six-Quarter Price Graph

Logitech International S.A.

11 LOG!

Sep 09 Nov09

II Vo!ume

Source: Yahoo, http://finance.yahoo.com/q/bc?s=LOGl+Basic+Chart

Jan 10 Mar 10 May 10

279

Jul23,2010

12 Jul 10

6.0

4.0 ~ g

2.0~

0.0 T Splits

280

Appendix Vm - Operating Margin

Ill Revenue Operating income • Operating margin (%) 3000~~~~~~~~~~~~~~~~~~--.-100%

2250 ----------------

1500 --- 50%

750 --- 25%

0 0% 2006 2007 2008 2009 2010

Appendix JX- Profit Margin

Net income • Profit margin (%) 3000~~~~~~~~~~~~~~~~~~~-.-100%

2250 I________________ _ ___ " ______________ I 75%

i - t -- - 50%

--- 25%

2006 2007 2008 2009 2010

Appendix X- Debt-to-Assets

Tota I assets • Debt to assets (%)

2000 100%

"lr:nf'\ 75% J;.>UU

1000 50%

500 25%

0 0% 2009 2009 2009 2009 2010

01 02 03 04 01

Case 21: Logitech: Finding Success through Innovation and Acquisition

Appendix XI - Cash Position

Year-ending net cash balances Dollars in millions

04 05 06 07

Appendix XU - Logitech Solvency in 2010

486

I SOLVENCY RATIOS

C:L.lnDT.TCDllJI c:n1 \ICll.lrV DATlnC fl 1n1 nnlTV\ -· ·-•&. • -••••• ---· -··-I •••'Ill,.._,_,, \-1"<."1 ..... I I I J Net Working Capital Ratio

Current Ratio

494

22.09

1.8

Quick Ratio (Acid Test) 1.2

Liquidity Ratio (Cash) 0.73

Receivables Turnover 9.6

~----------------I-Average Collection Pe,,,_ri=o=d _________ ,__3_,,,__ ____ _

Working Capital/Equity 35.3

Working Capital pS 2.02

Cash-Flow pS 0.78

Free Cash-Flow pS -0.36

FINANCIAL STRUCTURE RATIOS

Altman's Z-Score Ratio

Financial Leverage Ratio (Assets/Equity)

Debt Ratio

Total Debt/Equity (Gearing Ratio)

LT Debt/Equity

LT Debt/Capital Invested

LT Debt/Total Liabilities

Interest Cover

Interest/Capital Invested

4.35

1.6

37.5

0.00

16.0

0.0

281

ADVFN. (2010). Logitech International S.A. Google Finance. (2010). Logitech International S.A. Logitech. (2010). Key Ratios and Statistics~ Retrieved from http://www.advfn.com/p. Retrieved from http://www.google.com/fin Retrieved from http://ir.logitech.com/: php?pid=financials&symbol=NASDAQ% ance?q=NASDAQ:LOGl&fstype=ii financials-keyratios.cfm 3ALOGI Higginbotham, S. (2010, July 23). China has 420m Logitech. (2010). A Leader in Innovation and

Bardman, E. R. (2010). Logitech. [Slideshow Internet Users and a Need for Speed. Design. Retrieved from http://www. ~ Presentation]. Retrieved from http://www. GigaOm. Retrieved from http://gigaom. logitech.com/en-us/175/482. bloobble.com/broadbandpresentations/ com/2010/07/23/china-has-420m-internet- Logitech. (2010). The Logitech Story. Retrie presentations?itemid=3377 users-and-a-need-for-speed/ from http://www.logitech.com/enu

Buchanan, H. (2005, December 11). Hollister, S. (2010, May 20). Logitech's Google about/logitech-story Logitech - Marketing Technology TV Companion Box Includes Smartphone Logitech. (2010). Logitech's Swiss Origins. to Women. Retrieved from http:// Apps, We Go Eyes-On. Retrieved from Retrieved from http://www. marketingtowomenonline.typepad.com/ http://www.engadget.com/2010/05/20/ logitech.com/en-in/176/3708?WT. blog/2005/12/logitech_market.html logitechs-google-tv-companion- ac=pi%70814%7C%7Chp

Business Wire. (2010, July 7). Logitech Acquires boxincludes-smartphone-apps-we/ Logitech and Skype Announce Marketing Paradlat. Retrieved from http://·;.;·.;.;·.;.;. Kirk, j, (2009, january 6j. Mouse-Maker Logitech Agreement. (2004, November 17). Retri businesswire.com/portal/site/home/ to Cut 525 Salaried Employees. PC World. from http://irJogitech.com/releasedeta permalink/?ndmViewld=news_view&newsl Retrieved from http://www.pcworld.com/ cfm?ReleaselD=174109 d=20100707006829&newsLang=en article/156397/mousemaker_logitech_to_ MISH. (2009, May 5). MISH's Global Economic

China Internet Watch. (2010, May 3). cut_525_salaried_employees.html Trend Analysis. [Graph image]. China Internet Users Reached 404 Labrousse, J. (2009, November 11). Growth Retrieved from http://1.bp.blogspot. · Million. Retrieved from http://www. Opportunities Drive Product com/_nSTOvZpSgc/Sf1XZcpoJxl/ chinainternetwatch.com/634/china- Strategy. Slideshow Presentation. AAAAAAAAGCk/Y38fyMUWmVM/s160 internet-usersreached-404-million/ Retrieved from http://www.bloobble. debt+service+payments.png

Creative Technologies Ltd. (2010). Corporate com/broadbandpresentations/ Operating Margin. (2010). lnvestopedia ULC} Profile. Retrieved from http://www.creative. presentations?itemid=3135 Philips. (2010). Company Profile. Retrieved com/corporate/about/ Logitech. (2004, November17). Logitech and from http://www.usa.philips.com/abou

Daily Finance. (2010, July 19). Microsoft Corp. Skype Announce Marketing Agreement. company/index.page - Company Description. Retrieved from Retrieved from http://ir.logitech.com/ Profit Margin. (2010). lnvestopedia ULC http://www.dailyfinance.com/company/ releasedetail.cfm?ReleaselD=174109 Quindlen, G. P. (2009, November 11). Getting Microsoftcorporation/msft/n;:ic;/.::nmp<iny- !..cgitech. {2007). iPcd Capability. Retrieved from Back to Growth: Logitech. [Slideshow description http://logitechviva.navisite.net/web/ Presentation]. Retrieved from http://

Eddy, N. (2009, November 11). Logitech ftp/pub/pdf/speakers/ipod_custom_fit_ bloobble.com/broadbandpresentation Acquires LifeSize Communications. adapors_enu.pdf presentations?itemid=3134 eWeek.com. Retrieved from http://www. Logitech. (2007). Logitech History. Retrieved Rovi Corp. (2010). Microsoft Corporation. eweek.com/c/a/Midmarket/Logitech- from http://www.rogitech.com/lang/pdf/ Retrieved from http://www.allgame.co • Announces-Acquisition-of-LifeSize- logitech_history_200703.pdf company.php?id=915 Communications-271671/ Logitech. (2009). 2009 Annual Report. Smith, G. (2010, January 12). Five User

Fu, R. (2009, November 19). China Mobile Retrieved from http://files. Experience Trends I'll be Watching in Internet User Behavior Study 2009. shareholder.com/downloads/ 2010. nForm. Retrieye_d_frQm.h:tt ·

----Eh;na-fntemetWatctr.R-etri-ev~d-from--------c<JG17974346673xOx308649/2E8292EO::--___ . nform.ca/blog/2010/01/five-user- http://www.chinainternetwatch. ASEF-4804-97A6-2273EFBA14D7/ experiencetrends-il com/390/china-mobile-internet-user- Logitech_2009_AR_lnv_Proxy_ Wikinvest. (2010). Logitech International behaviorstudy-2009/ Webready_072309.pdf SA (LOGO. Retrieved from http://

FundingUniverse. (n.d.). Logitech Company Logitech. (2009). Logitech Advanced 2.4 GHz www.wikinvest.com/stock/Logitech_ , History. Retrieved 20 July 2010 from http:// Technology with Unifying Technology. lnternational_SA._(LOGI) www.fundinguniverse.com/company- Retrieved from http://wwwJogitech.com/ Yahoo! Finance. (2010). Logitech International histories/Logitech-lnternational-SA- images/pdf/roem/Advanced_24_Unifying_ (NMS). Retrieved from http://finance.yah Company-History.html FINAL070709.pdf com/q/bc?s=LOGl+Basic+Chart

Google Finance. (2010). Creative Technology Ltd. Logitech. (2010). Company Backgrounder. Yahoo! Inc. (2010). Royal Philips Electronics Retrieved from http://www.google.com/ Retrieved from http://ir.logitech.com/ Company Profile. Retrieved from http:/. finance?q=SIN:06 overview.cfm?/&cl=us,en yahoo.com/ic/41/41823.html

Texas

l.ov Rach~

high: full n healtl Rach; sessio classe frienc from class: sad or lulule

Levis: into 11 emplc guesti woulc

Choi Based vi des price. pants and$

i. Them