Logitech (B) Redefining the Business Model

Logitech acquired Quickcam in 1998 for the rights to an established brand (see Logitech A). After the acquisition, the main challenges the new CEO had faced were to bring together the various groups to form one company and to explicitly shift strategy from an OEM focus to a retail focus. The challenge now in 2001 was to manage the growth in this new channel, maintain a pipeline of product innovation, preserve local responsiveness, and achieve global efficiency. The CEO had to create an organization model to make this happen. But by focusing on the retail channel, the company had to cope with new challenges. In the retail business, key success factors were no longer price, quality, and reliability; but innovation, style, time-to-market, pricing, and brand development. The case details the strategies and organizational changes (in R&D, production, sales, marketing, reporting, profit planning, compensation) that the CEO thought crucial to the development of a successful retail strategy.