In this competitive world there are too many companies that are generating a constant development of the process or their ways in how to do better business by obtaining differentiations oftheir products from competitors and creating unceasing new products than goes according with news technologies. Logitech is one of best examples of a modern global corporation. In 2010 Logitechgenerated annual sales of $2.5 billon. Logitech's products include mice, trackballs, keyboards, interactive gaming controllers, multimedia speakers, headsets, webcams, 3D control devices, lapdesks,webcams, headsets, video communications services, and digital video security systems and more; Most of Logitech's revenue comes from its original business of computer mice and keyboards. Approximately halfof Logitech's revenue has come from Europe, while the North American and Asia/Pacific regions account for 35% and 15% of revenue, respectively. The company has found the way to incur in a global valuechain to lower production cost while continuing the value of those resources that lead to differentiation. "Worldwide PC Sales Could Still Grow by Double-Digits", NY Times Bits,
QUESTION 1: In aworld without trade, what would happen to the costs that American consumers would have to pay for Logitech’s products?
ANSWER 1: Without trade the cost of fabric a Logitech’s products will raise andconsequently American consumers would have to pay more dollars for their products on top of the high labor cost, material and overhead. American consumers could enjoy competition between companieswhich means low cost, high quality and excellent costumer services.
QUESTION 2: Explain how trade lowers the costs of making computer peripherals such as mice and keyboards?
ANSWER 2: What Logitechdid in order to reduce cost maintaining high standards of quality was to do the manufacturing and the assembling in Taiwan and China where the wages of labor were lower, the designing in Ireland...