It made sense for Logitech to move beyond just making PC peripheral products because they have almost hit the ceiling within that niche. As one of, if not the, biggest brands in mouse and keyboard manufacturing distribution, Logitech needs to prepare themselves for a time where PC and laptop use may fade away in dominance. The commerce, business, and gaming landscapes are all shifting towards a higher utilization of mobile platforms and Logitech will lose out if they wait too late to diversify their offerings. Along with not wanting to be left behind after the mobile and smart home sector shifts into the forefront of tech business, Logitech also does not want to be bought by a larger company anytime soon (Hardawar, 2017). One of the best ways to ensure that does not have to happen is if Logitech can make arrangements to where they can fill in any spaces in revenue that are created because people lost the need to buy keyboards and computer mouses as much as they used to. Diversifying to the point where they can always ensure that they can keep their heads above water without needing outside funding should not alarm their partners Apple and Google at all. In fact, there are many ways that Logitech can accomplish this.
It is possible for Logitech to find niches within the smart home market without them upsetting any of their allies and partners. The overall logic of this process happening is that Logitech has always been in the same industries as the larger brands and companies, but the bigger brands never have tried to be present in every single nook and cranny of every field that they are present in (Ricadela, 2017). Because of this, Logitech will be able to float under the radar in the smart home market somewhat because they will primarily be using money from their mouse and keyboard business to fund the making of keyboards for smart TVs and other smart home objects. If anything, Logitech may become a go to vendor for larger companies because Logitech is one of the most trusted names in the mouse and keyboard industry and would save larger brands much more time and money by partnering with Logitech instead of trying to develop their own keyboards that could compete.
Also, Logitech does not dedicate as much funding to research and development to creating more high end products like their larger partners and competitors do (Ricadela, 2017), so it would not benefit them in the long run to compete with their partners because most of their new products would be subpar. This is most likely a result of Logitech’s history of being more focused on designing than making any prominent advances in technology. Considering all of these things, Logitech will never ruin their Apple and Google partnerships because Logitech will always aim to go into the niches that brands like Apple and Google simply do not have the time to go to. Logitech is often the biggest brand in the arenas that they venture into because more prominent brands usually neglect to consider certain niches.
As mentioned before, Logitech would prefer not to compete with the giants of the tech industry and would not have to do so with their current business plans. When it comes to clouds, Logitech would rather assist cloud companies rather than create their own models. In doing so, Logitech would achieve one of their main goals which is to be knowledgeable about the vast majority of happenings and trends in their industries of business and have the resources to be disruptive, but not necessarily have to do so.
2. PayPal needed to get into the physical and mainstream payment markets because their smaller competitors were beginning to offer the same amount of digital services as PayPal was and more, with a lower business overhead. PayPal was in a very heated negotiation period with Visa. Visa even went as far to make public statements about competing with PayPal if the need arose (Demos, 2017). Luckily for PayPal, they were able to reach an agreement that saw them become a part of Visa’s digital wallet options and get a locked payment fee that will not rise up in the future. They were also able to negotiate partnerships with MasterCard and Facebook to become a regular payment option within their apps. MasterCard’s partnership will allow PayPal to become a regular option of payment in their digital wallet for no fee at all (Demos, 2017). Facebook’s partnership with PayPal will allow PayPal using merchants to sell products and collect payments through the Facebook and Facebook Messenger apps from now on (Addady, 2016). This increases the use of both Facebook and PayPal’s apps and brands and gives merchants another avenue in promoting and building their brands and businesses. One must also notice the trend of major business brands and vendors making the switch to allowing digital payments through apps and tablet kiosks. In this arena, PayPal actually has a lot to offer companies because they are an industry pioneer in online payments and business. While it may be a stretch to say that brands like Burger King, BMW, and Dick’s Sporting Goods have business PayPal accounts, it would not be a stretch to say that their support and online shopping departments might have a secret PayPal email handy.
PayPal’s use of a “borrow” strategy instead of a “build” or “buy” is beneficial to the company because it allows PayPal to piggyback off of the name values and technical work of Visa, MasterCard, and Facebook without having to design a digital wallet or new subsidiary themselves. The overall goal of these partnerships is to put PayPal is a position that allows them to remain the leader in digital merchant and payment options while also giving the company the opportunity to branch out into the physical business and commerce marketplace. PayPal offers their own debit cards, but they still are classified as MasterCard products and not solely PayPal’s. That being considered, it makes sense that MasterCard decided to let PayPal be in its digital wallet for free while Visa will still require PayPal to pay a fee (Demos, 2017). PayPal would have to spend hundreds of millions of dollars to become their own individual credit and debit company. By the time that they would be able to, their competitors in the digital merchant market and in the physical credit and debit market would both be miles ahead of them in product quality. Keeping this problem in mind, PayPal’s approach to infiltrating the physical market is a sound strategy that no other digital commerce company will be able to copy effectively. By the time smaller digital payment brands can negotiate such a partnership with different credit and debit companies, PayPal’s already established brand would have already been thrown that much further into the mainstream. Combining all of this with the fact that PayPal is already a trusted name when it comes to security and fraud prevention within the online shopping and business arenas, it is easy to see why PayPal was able to go into the boardrooms of huge brands like Visa, MasterCard, and Facebook. This is a very wise long-term strategy by PayPal that will build the brand even while temporarily “borrowing” some key services.
- Addady, M. (2016). You Can Now Use PayPal to Order Pizza on Facebook. Fortune.
- Demos, T. (2016). PayPal Strikes Deal with MasterCard to Allow Payments in Stores. WSJ.
- Demos, T. (2016). Paypal Strikes Partnership with Visa. WSJ
- Hardawar, D. (2017). Logitech’s CEO Says You Can Innovate and be Humble. Engadget.
- Ricadela, A. (2017). Mousemaker Logitech Gets Ready to Roar at Tech Industry Giants. Bloomberg.
