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?

Comparative advantage is defined as the quality of a firm or country to produce something at a lower economic oportunity cost than other firm.

These operations can be easily explained by defining the comparative advantages of each country.

Manufacturing in China and Taiwan - This two countries have a comparative advantage in manufacturing because of low labor costs, and great infraestructure (ports, trains, airports, facilities).

Basic R$D in California and Switzerland - Both regions have a comparative advantage in human capital. They have prestigious universities, and are at the forefront of scientific and technological research.

Design products in Ireland - Ireland also has good human capital, but perhaps not as good as California or Switzerland. Therefore, product design, which usually comes after basic research, is undertaken there.

Coordinates marketing and operations in California - California is a huge market, and being close to potential customers is always a comparative advantage for marketing and managerial operations.