Strategies to ‘revive’ Logitech in the era of remote work

Start and succeed with computers

In 1976, two Stanford computer scientists, Daniel Borel and Pierluigi Zappacosta, met and became friends. At the end of the course, the two developed a word processing system and spent four years raising capital. Not long after, they had the help of Giacomo Marini, Zappacosta’s best friend.

Thanks to receiving a 4-month contract from Ricoh electronics (Japan), the three had money to found Logitech (originally Softech) on October 2, 1981. Logitech handles most of the software development for Ricoh. During this time, the computer mouse appeared and attracted the attention of the whole group.

Knowing that the Swiss Federal Institute of Technology was developing a computer mouse, Logitech teamed up and brought the mouse out of the lab. In 1982, the company introduced its first hardware, the P4 mouse.

The three Logitech founders (from left): Pierluigi Zappacosta, Daniel Borel and Giacomo Marini

That fall, the P4 mouse was marketed at the Comdex trade show. In the second half of 1983, Logitech began selling mice to a larger number of customers, including HP with an annual production of 25,000 units. To continue its growth and increase profit margin, Logitech decided to open a factory in Taiwan in 1986.

Besides OEM activities, Logitech also has eyes on the potential retail market of computer mice. Due to lack of retail experience, the company wanted to work with Microsoft to sell mice with software but was unsuccessful. Therefore, the company itself mobilized with the Logitech C7 mouse model. Despite limited marketing resources, the C7 managed to sell 800 units in its first month, December 1985.

In July 1988, Logitech went public. Thanks to the balance between OEM and retail activities and global presence, the company successfully listed on the Swiss exchange.

On the journey of its decades of existence, Logitech also faces many risks and competitors in the computer mouse market. The company made two important changes: consolidating production in China and identifying a larger opportunity in the peripherals market, not just in mice.

Since 1988, Logitech introduced a number of new hardware such as handheld scanner, digital camera, microphone/speaker, joystick… The company also constantly innovates computer mouse with new technologies and designs, convenient to use. more useful as a wireless mouse. Thanks to that, in April 1996, Logitech officially became the world’s largest computer mouse manufacturer. Brand awareness exploded, users were used to Logitech products.

The turning point came to Logitech in February 1998, when Mr. Borel – the founder who has held the position of Chairman and CEO since 1992 – invited Guerino De Luca to be the CEO. With his seniority at Apple, he brings a product philosophy with a modern design at its core. Under his leadership, Logitech’s business results grew steadily and often exceeded market forecasts. At one point, Logitech reported profits for eight consecutive years. During this time, the company’s product portfolio continued to expand, and its scale also grew thanks to its internal strength and through acquisitions.

Finding new vitality in the post-PC era

The computer market is in a period of decline, however, the Covid-19 epidemic occurred, resulting in a wave of remote work, study and entertainment that “saved” this industry. Before the epidemic appeared, Logitech itself also implemented strategies to adapt to a world that was increasingly dependent on computers. One of them is digging into games – a field that is constantly growing and not losing its charm. More importantly, the gaming world has a great passion for peripheral devices, whether it is a mouse, keyboard, speaker or headset.

Logitech CEO Bracken Darrell

Since the first joystick, Logitech has completely opened a separate product line for games, bringing a style specifically for this audience and quickly becoming popular. In early 2018, the company released a product that combines gaming and high-quality audio, the Logitech Gaming Speakers G560. To do so, they had to talk to many gamers around the world, learn how they use speakers in the room. “That’s when we realized we could create a beautiful ecosystem around the table, between the mouse, the keyboard, and the speakers,” said Philippe Depallens, former Vice President of Logitech Audio.

The strategist behind Logitech’s attempt to reinvent itself is President and CEO Bracken Darrell. Since taking over the top position in 2013, he has dedicated his time to promoting the company into new areas such as portable speakers, games, wearables, and smart home controls. In 2012, Logitech experienced a period of 4 consecutive years of no growth, but, not because of that, Mr. Darrell was discouraged. He was excited about the opportunity to “design a new product portfolio and not be as constrained as previous roles.”

When he first started, he said, his main product category (mouse and keyboard) resembled a piece of black plastic to him. Logitech has always been good at innovation, but there were no designers inside, so he invested in design. One of his first directions was to invite Alastair Curtis as Design Director. Logitech “makeovers” and regularly receives prestigious design awards, great merit belongs to Mr. Curtis.

Logitech recorded a spike in demand during the Covid-19 epidemic, for example, in the first quarter of 2020, computer webcam sales increased 121% to $ 61 million, the highest level in 10 years. Other divisions such as games and keyboards also grew impressively. Mr. Darrell calls the trends of telecommuting, video calling, and e-sports the “democratization of content,” where anyone can create content, helping to improve business for Logitech. It once again affirms that the mouse and keyboard are still important tools for creativity and analysis, for anyone, engineer, scientist, student, teacher… “PC, monitor or anything else. Whatever is in front of you will not disappear. You will always use them, that helps us maintain a presence.”

However, like any other electronics company, Logitech is having a headache with supply chain disruptions. Mr. Darrell predicts the logistics problems will last until early next year. Parts delivery time by air has increased from 4-5 days to 2 weeks, while freight rates have also increased. Logitech has added suppliers and stockpiled components to meet strong demand due to the wave of work and play from home.

From a manufacturer of computer accessories, Logitech went through ups and downs to become a major force in the era of remote work with a market capitalization of $13 billion. Logitech’s success comes from innovation and strategic acquisitions. The combination of innovative products and reasonable prices, constantly changing to meet customer tastes, while maintaining quality and design has helped Logitech become a pioneer in the device market. Peripheral.

According to Du Lam