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Theory of Comparative Advantage in Logitech

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Use the theory of comparative advantage to explain the way in which Logitech has configured its global operations. Why does the company manufacture in China and Taiwan, undertake basic R & D in California and Switzerland, design products in Ireland, and coordinate marketing and operations from California?

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This solution of 231 words explains the theory of comparative advantage and examines how Logitech achieves this by manufacturing overseas and coordinate marketing and operations from California.

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The theory of comparative advantage says that by specializing in production or manufacturing of goods or services in which a particular country has a comparative advantage, and then trading it internationally with other countries which have specialized in a similar fashion, each country can reach a point outside its PPF (Production Possibility Frontier). A ...

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