Logitech 2005 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2005 Logitech annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 143

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143

Manufacturing
To effectively respond to rapidly changing demand and to leverage economies of scale, the Company will
continue to target a 50/50 mix of in-house manufacturing and third-party contract manufacturers to supply its
products. Through its high-volume ISO 9000-certified manufacturing operations located in Suzhou, China,
Logitech believes it has been able to maintain strong quality process controls and has realized significant cost
efficiencies. The expansion of its Suzhou operations, which is scheduled to be completed in the summer of 2005,
will provide for increased production capacity and greater flexibility in managing product demand. Further, by
outsourcing the manufacturing of certain products, the Company aims to reduce the volatility in production
volumes and to reduce time to market.
Information Technology
Logitech is making investments to upgrade its business applications and information technology systems.
Logitech’s investments in information technology are focused on positioning the Company for future growth by
improving its operational and financial processes to realize cost structure improvements and to effectively
manage the increased complexity of its business through standardization and integration of its IT environments.
Geographic Expansion
Logitech believes that the market penetration for its products is particularly low in developing markets such
as Latin America, Eastern Europe and China. The Company is committing substantial resources to capitalize on
the growth opportunities in these regions, including securing new channel partners, strengthening relationships
with existing partners, expanding its sales force and investing in product and marketing initiatives.
Product Strategy
To capitalize on the many opportunities in the growing digital marketplace, Logitech’s product strategy
focuses on personal peripherals surrounding three digital environments:
• The Office Environment – Desktops
• The Living Room Environment – Game Consoles and Home Entertainment Systems
• The Mobile Environment – Notebook Computers, Mobile Phones, Mobile Entertainment Platforms, and
Digital Writing
The Office Environment
Logitech has successfully broadened its desktop presence by introducing new, more innovative, high-
performance pointing devices that have gained market acceptance. In addition, Logitech has expanded beyond its
traditional role as a provider of pointing devices for the desktop into a leading brand for video imaging products,
keyboards, PC audio products and control devices for 3D CAD/CAM users. The Company has the ability to
introduce an even greater number of essential personal peripherals that people touch and use every day.
The Living Room Environment
Logitech offers a broad spectrum of products for gaming consoles and PCs, including driving wheels,
cordless gamepads, speakers, audio headsets, keyboards, mice and cameras. With its expertise in force and
vibration feedback, cordless connectivity, voice input and video input, Logitech is enabling a broad range of new
gaming experiences for all three of the top console platforms (Playstation®2, Xbox™® and GameCube™). With
many of its products, Logitech can efficiently leverage its investments for one platform – desktop PC – into other
platforms – game consoles.
20