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Hire Writer These factors are further examined and following factors are derived that can best explain the diamond model of Porter. Factor conditions Porter argues that key factors of production or specialized factors are created, not inherited.
Specialized factors of production are skilled labor, capital and infrastructure. Because of availability of these factors in Taiwan in abundant, it is selected as a major manufacturing site of Logistic.
As Porter has argued that advanced factors give companies competitive edge availability of these factors elementally in Taiwan has caused Logitech by porter diamond be a rewarding destination. Related and supporting industry Porter argues that the presence of upstream or downstream industries facilitates the exchange of Information and promotes a continuous exchange of idea and innovation.
Taiwan has a well developed supply base for the parts required to nutcracker ten mall advantageous products AT Logistic n. Nine available TTY AT raw materials or the upstream products required for manufacturing process of products of Logistic is fully supportive in Taiwan.
This validates the argument of Porter and he production of Logistic products in Taiwan. Demand condition Porter forwards an assumption that, the more demanding the customers in an economy, the greater the pressure the firms face to constantly improve their competitiveness through innovative products, high quality etc.
With growing computer and information technology in Taiwan along with in the whole world, the local demand of the products of Logistic in Taiwan has also been an influential factor in the choice of the place.
This is also the reason why Logistic started its production in Taiwan. To gain the advantage over its competitors, Logistic has adopted the strategy of producing high volume and low cost products. This was only possible if they could grasp a production site which has abundant labor, raw materials and other resources and at the same time produce at very high volume.
Taiwan probably was the best alternative Logistic could come up with so they shifted their production center to Taiwan. This gives overall advantage by creating trade and reducing the cost of production. The main motive behind Logistic configuring its global operations such that it manufactures in china and Taiwan, undertake basic R in California and Switzerland, design products in Ireland, and coordinate marketing and operations from California is because of the competitive advantage.
It is comparatively advantageous to undertake those certain activities in certain places. This is why Logistic does so. Logistic and manufacturing activities in Taiwan and China High volume of production ensuring quality is required by Logistic to face the fierce competition from its competitors.
This high volume of production would give economic advantage if the labor wage can be maintained low. China and Taiwan are best known for their high population and thus low labor cost. This drives Logistic to install a manufacturing plant there. For the same volume of work in America, Logistic old probably have to pay twice than what it really pays in china or Taiwan.
Lectern Ana research Ana development R actively In clamatorial Ana saltcellars Well qualified labor is required for constant innovation of new ideas.
This helps the firms gain a competitive edge.
California and Switzerland have proximity to modern technologies and high technology enterprises. Furthermore, they have the availability of the highly qualified labor in abundance.
This is the reason why Logistic has placed it R activities in California and Switzerland. Logistic and designing products in Ireland Ireland is known for its new and attractive designs. An attractive design can be a factor that creates an advantage. A design that is better than that of competitors obviously creates a differentiation of the product.
It is for this reason that Logistic has to focus on design and for this purpose; Ireland seems to be the best alternative.
Logistic and coordinating marketing and operations from California There are numerous companies in California which has gained competitive advantage by good marketing and operation management. Additionally, the presence of skilled employees in these fields in California attracts Logistic to have a corporate headquarter in Fremont, California.
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To what extent can Porter's diamond help explain the choice of Taiwan as a ma jor manufacturing site for Logitech? Porter's diamond considers four important attributes which will create an enviro nment that helps the domestic industries.
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