Question

In Case 15, GoPro’s Struggle for Survival in 2016, the following is mention:

As GoPro moved into 2015, it appeared to be the poster child for American entrepreneurial success, going from a humble beginning as a homemade camera tether and plastic case vendor in 2004, to an action camera vendor with $350,000 in sales in 2005 (its first full year of operation), to revenue of $1.6 billion in 2015. The company had gone public in June, 2014, and at its peak in October, 2014, GoPro stock traded at over $98.00. In 2014, GoPro was ranked #1 most popular brand on YouTube with more than 640 million views, and an average of 845 thousand views daily. In 2015, the average daily views were up to 1.01 million. Abruptly, in the third quarter of 2015, GoPro’s magic disappeared. Fourth quarter, 2015 revenue dropped by 31 percent from the prior year, and net income (loss) fell by 128 percent to a net loss of $34.5 million. By the end of December, 2015, the stock traded at less than $20.00. GoPro’s sales continued to slip in 2016. The newly introduced HERO4 camera performed poorly, and the company cut its price by half and reduced its product line to three cameras. The Karma camera drone, set for release in the first half of 2016, was inexplicably pushed back to winter, and there was no date for release of the HERO5 action camera. After the first quarter 2016 results were released, GoPro’s stock dropped below $9.00. According to Investor Place (28 March, 2016), GoPro had “essentially erased its once coveted title of Wall Street’s darling and is now loathed by Wall Street.”

What is your assessment of GoPro’s business model and competitive strategy? Does its approach to deliver customer value contribute to a sustainable competitive advantage?

One of the competitive strategies to consider is whether to be a “first-mover,” “first-follower,” or “slow-mover.” Which strategy do you believe Go-Pro has embraced? Is your chosen strategy the right course of action for Go-pro all of the time? Please explain

Answer 1

GoPro Marketing Strategy

GoPro was previously recognized as Woodman Labs, Inc. and transformed its name to GoPro, Inc. in February 2014. GoPro, Inc. have its headquarters in San Mateo, California and was originated in 2004 (GoPro Yahoo Finance, 2015). Consumer agony points linked with the managing, distributing, capturing and relishing attractive content are alleviated by GoPro’s software and hardware solutions. A HERO line of capture instruments including top accessories and cameras are offered by the company. Mounts are also offered by the company that empower the customer to attire that mount on their bodies such as wrist covers, head fastenings and chest binds. Furthermore, it also provides a video editing tool known as GoPro Studio that permits the users to generate expert and professional quality videos from the content of their GoPro. It permits users to easily and wirelessly manage, store and share content from cameras to mobile devices through GoPro App (GoPro Annual Report, 2014). The products of GoPro are marketed and sold through the retailers and wholesalers along with their official Website in United States and globally. The perfect entry-level GoPro cameras are Hero Cameras which they have introduced recently. The series of HERO 4 that allows live streaming, professional videography and premium quality photography and many other innovative features to capture and share (GoPro Annual Report, 2014).

GoPro Competitor Analysis

The competitors of the GoPro are Samsung Electronics, VIEVU, Eyesee360º, and Contour Adventure Every day (Rivalfox, 2015). Contour Cameras produces cameras that empowers contemporary time explorers, sportsmen and women, voyagers, specialists and amateurs to record their video story of adventure, travel and action (Contour Yahoo Finance, 2015). Single shot panoramic imaging front-runner is EyeSee360 for both the videography and still images (Bloomberg Business, 2015). VIEVU Cameras are manufactured for the Roughest Circumstances that are tremendously rocky, water-resistant, and easy to use (VIEVU, 2015). HD videos and audios can easily be made with these cameras with improved lowlight system and with Wi-Fi live streaming is also a function of these cameras. Samsung Electronics also manufacture cameras to stream live like Smart Camera with Wi-Fi connectivity (Samsung Yahoo Finance, 2015). Though GoPro, Inc. is one of the leading brands in the manufacturing of Action Cameras and it offers cameras with high innovation and technology.

Market Characteristics

The market for the GoPro is Action Cameras that allow to take the footage of high energy physical happenings including swimming, rock climbing, running and hunting. The GoPro channel on Pinterest has been introduced and viewers of its videos on social websites like YouTube etc. have been increasing (GoPro, 2015). The market size for the action cameras is likely to increase from 31 billion that was in 2013 to 51 billion till 2015 due to enhanced interest of consumers in these cameras. The market size of action cameras would increase because of attenuation in the market for traditional cameras. The increased market share of mobile phones is also attracting customers towards action cameras (Mani, 2014). The consumers of the action camera market are physically active people because they are users of smartphones and action cameras are subset of smartphones. The consumers are more interested in innovative technology and unique characteristics of devices. The competitors as discussed above are not operating as strongly as the GoPro that’s why the level of competitiveness is low (Mani, 2014). The entry barrier is high due to responsiveness and sensitivity of technological advancement and it is not easy for any of the company to attain the level of competitiveness at which GoPro has been operating. However, the large companies can enter in the market introducing similar products with innovations. A company operating in this market can easily exit from the market that’s why exit barrier is low. Though, the companies holding the major market share would find it difficult to exit from the market (Rose, 2015).

GoPro Business Strategy

GoPro uses the content management strategy and it strives to eradicate the critical point of dealing with content by allowing the customers to share and transfer material from the cameras to a system that competently systematizes the material and enables suitable sharing and editing. The early stages of the content management platform strategy are GoPro Studio and GoPro App. Moreover, GoPro is intended towards the expansion of current business of capturing and broadening of the assortment with content management. Therefore, the specific strategy GoPro uses to deliver improved worth to the consumers and distinguish from opponents is the content management and it is the key to their accomplishment.

Advantage over Competitors

Particular advantage got by GoPro over its competitors is its groundbreaking, exclusive and hero line of capture devices. It offers other equipment too that include standby series of batteries, charging accessories and data cables to attach its GoPro cameras to monitors and televisions to manage and transfer data. This advantage can stay as long as the company continues to provide innovative and unique capturing devices. Moreover, the new products launched must be in accordance with the market preferences so the significant market share held by the company could be maintained and further enhanced. GoPro (GPRO) is the front runner in the case of market share of i.e. 47.50%. The share of the company in the market is also likely to enhance. It is reported that 54% of the action camera owners own the cameras of GoPro, Inc. The share of the future purchase purposes of GoPro has also increased to 73%.