Question

List GoPro's five porter forces and its value proposition. Explain each of them.

Answer 1

GoPro, Inc. is one of Photographic Equipment & Supplies ' leading companies. The methods of doing company in Consumer Goods have been redefined by GoPro, Inc. over the years.

Porter Five (5) Forces are

• Threat of New Entrants
• Bargaining Power of Suppliers
• Bargaining Power of Buyers
• Threat from Substitute Products
• Rivalry among the existing players.

Porter Five Forces is a holistic structure of policy that has taken a strategic choice away from evaluating the current competition. The focus of Porter Five Forces is - how GoPro, Inc. can create a sustainable competitive advantage in the photographic equipment and supply sector. Not only can managers at GoPro, Inc. use Porter Five Forces to create a strategic stance in the Photographic Equipment & Supplies industry, they can also explore lucrative possibilities in the entire consumer goods industry.

1. Threats of New Entrants- New entrants in Photographic Equipment & Supplies are bringing innovation, fresh methods of doing stuff, and putting pressure on GoPro, Inc. through reduced pricing approach, cost reduction, and offering clients with fresh value proposals. To safeguard its competitive edge, GoPro, Inc. must handle all these difficulties and create efficient obstacles.

GoPro, Inc. can tackle the Threats of New Entrants

By innovating fresh services and products. Not only do fresh products bring fresh clients to the fold, but they also offer ancient clients a reason to purchase products from GoPro, Inc.
By constructing economies of scale so the fixed cost per unit can be lowered.
Capacity building and research and development expenditure. New entrants are less likely to join a vibrant sector where established players like GoPro, Inc. continue to frequently define the norms

2. Bargaining Power of Suppliers-Most of all businesses purchase their raw material from various providers in the Photographic Equipment & Supplies sector. The margins that GoPro, Inc. can earn on the market can be reduced by suppliers in the dominant position. In the field of Photographic Equipment & Supplies, powerful distributors in the consumer goods industry use their bargaining authority to obtain greater prices from companies.

GoPro, Inc. can tackle Bargaining Power of the Suppliers

By constructing various supply chain efficiently.
By experimenting with product models using various materials in such a way that if prices rise from one raw material then the business can move to another.
Developing committed vendors that are dependent on the company. One of the lessons GoPro, Inc. can learn from Wal-Mart and Nike is how these businesses created third-party producers whose company relies exclusively on them, creating a situation where these third-party manufacturers have much less bargaining power compared to Wal-Mart and Nike.

3. Bargaining Power of Buyers- Buyers are often a lot of demand. They want to purchase the best accessible offers by paying as much as possible the minimum cost. This puts long-term pressure on the profitability of GoPro, Inc. The lower and stronger the client base is GoPro, Inc., the greater the customers ' negotiating power and the greater their capacity to seek growing discounts and offers.

GoPro, Inc. can tackle the Bargaining Power of Buyers

By constructing a big customer base. In two respects, this will be useful. It will decrease the buyers ' negotiating authority and provide the company with an chance to streamline its process of sales and manufacturing.
By innovative fresh products quickly. Customers frequently seek discounts and offers on existing products, so if GoPro, Inc. continues to develop fresh products, then buyers ' negotiating power may be limited.

Threats of Substitute Products or Services- If a fresh product or service meets the requirements of a comparable client in distinct ways, the profitability of the sector will suffer. Services such as Dropbox and Google Drive, for instance, replace hardware disks for storage. A replacement product or service is highly threatened if it provides a value proposition that is distinctly distinct from the industry's current products.

GoPro, Inc. can tackle the Treat of Substitute Products / Services

By being more service-oriented than simply product-oriented. By knowing the customer's core need instead of what the client purchases. By raising the expense to the clients of switching.

Rivalry among the Existing Competitors- If the competition among an industry's current players is intense, it will drive down rates and diminish the industry's general profitability. GoPro, Inc. works in a highly competitive sector of photographic equipment and supplies. This rivalry is taking toll on the organization's general long-term profitability.

GoPro, Inc. can tackle Intense Rivalry among the Existing Competitors in Photographic Equipment & Supplies industry

By constructing a sustainable differentiation By constructing scale so that it can compete better Working with rivals to boost the size of the market rather than compete for the small market.

GoPro, Inc. strategists can obtain a full image of what affects the organization's profitability in the Photographic Equipment & Supplies sector by evaluating all five competitive forces. Early on, they can recognize game-changing trends and can react quickly to exploit the emerging chance. GoPro, Inc.'s executives can shape these forces in their favor by knowing the Porter Five Forces in excellent detail.