Introduction and Brief Description of Businesses
GoPro is a technology company. It was founded in 2002 in the United States. The company specialises in manufacturing action cameras and consumer drones, developing a mobile app, and producing accessories. At the same time, it offers software for editing videos. As for now, GoPro is an international company with revenues over $1,5 billion and almost $55 million of income.
Vision and Mission Statements
According to the company’s vision, GoPro is driven by dreams and strives for creating products, which would inspire people to become involved in adventures and create experiences. As for the mission, the company’s objective is to offer cameras and video-editing software, which would be helpful for catching the most astonishing moments and adventures and sharing them with the world. These mission and vision statements correspond with company’s product design and a variety of cameras offered by it. So, they are positively connected to its performance.
External Assessment
Porter Five Forces Analysis
- Industry rivalry – high due to quick development and large size of the industry and a number of substitutes offered by rivals. Primary competitors – Sony, Apple, iON, Garmin, Xiaomi, etc. Three types of rivals – brand, product, and generic competitors;
- Bargaining power of buyers – moderate because cameras are pricey and there are numerous affordable substitutes, i.e. customers choose manufacturers of action cameras based on their financial status and budget;
- Bargaining power of suppliers – low, as the company has an opportunity to switch to other manufacturers in case of necessity;
- Threat of new entrants – moderate, as the industry is developing quickly and competitors are becoming involved in offering substitutes. Still, GoPro is a recognizable brand, which is synonymous with a particular image.
- Threat of substitutes – high. Even though substitutes are of lower quality, they are as well cheaper.
PESTEL
- P – political factors: GoPro experiences no governmental intervention and environments in all countries of cooperation are politically stable;
- E – economic factors: constant growth of population, which contributes to potential expansion of consumer base; detrimental influence in case of economic recession due to dependence upon consumers;
- S – social factors: a promotion of GoPro lifestyle – a specific mix of amateur and professional sports. It is promoted via social networks, thus creating a unique GoPro culture;
- T – technological factors: exceptional quality of offered cameras, advanced technologies, mobile app, Instagram account, and YouTube channel;
- E – environmental factors: GoPro launched an educative initiative aimed at increasing awareness of environmental issues;
- L – legal factors: international corporation, which operates based on customs and trade agreements.
Success Factors
- Overall brand recognition;
- Advanced technology;
- Developed system of distribution channels.
Opportunities
- Offering both affordable and luxury segment products;
- Further expansion of distribution channels around the globe.
Internal Assessment
Financial Position and Performance
GoPro operates at the international scope. Its revenues are constantly growing and reached around $1.62 billion in 2015. More than 5 million devices were sold. Nevertheless, the company experiences particular financial hardships because operating income and profit decreased in 2015 to $54.75 and $36.13, respectively. More than that, GoPro announced the strategy aimed at cutting costs. According to it, around 200 employees out of 1,500 were fired. In addition, the company is constantly involved in developing its business operations and acquired two start-ups for expanding opportunities for editing videos. Finally, its ratios are stable, which points to the liquidity of company’s shares.
Core Competencies
- Technology and innovations: GoPro offers the most advanced technologies in its segment – sphere of action camera. Therefore, focus on the further innovation and introduction of the newest technologies is one of core competencies;
- Branding, advertising, and marketing: social networks are used as a tool for marketing and promoting a unique GoPro culture. In this way, its followers are interested in becoming a part of the culture, which is the best option for advertisements. More than that, the company motivates athletes, professional sportsmen, and celebrities to use its products, thus increasing its popularity.
Value Creation
Value is created by both unique advertisement strategies and consumer loyalty and company’s activities. As for company’s activities, it incorporates several steps:
- Inbound logistics, i.e. cooperating with suppliers, which offer materials and details of exceptional quality;
- Operations: manufacturing of high-quality products and development of software and a mobile app;
- Outbound logistics: shipping and distribution of manufactured products;
- Marketing, promotion, and customer support.
SWOT
- Strengths: brand name and overall recognition of high-quality products, a unique GoPro culture, popularity in social networks and real life;
- Weaknesses: high prices, risks of being outperformed by competitors, which offer substitutes, and imitable product;
- Opportunities: developing an affordable series of action cameras, winning new markets, and offering new services for editing videos;
- Threats: substitutions and operations of competitors.
Management Issues
- Easily replicable and imitable product – it is a challenge due to company’s recent success. As more competitors are entering the market, GoPro should develop comprehensive strategies for outperforming rivals instead of relying on benefits deriving from brand name and image;
- Governance and lack of diversified sources of income, as the company is dependent upon sales.
Existing Strategies
- Uniqueness – Industry wide: differentiation strategy – the company offers a wide range of cameras and aims at satisfying different need of customers from price to technical specification of offered products.
Choice of Strategies
Ansoff Matrix
Differentiation-narrow target – focused differentiation strategy, which is currently deployed.
SWOT
- Maxi-Maxi: expand a GoPro culture to region-specific social networks;
- Maxi-mini: differentiate products to outperform competitors;
- Mini-maxi and mini-mini: make a focus on introducing affordable cameras in order to avoid decrease of the customer base.
McKinsey-GE Matrix
- Avoid further outsourcing of resources;
- Introduce new services to avoid overdependence on sales as the only source of income due to potentially negative influence on the company in the long run.
Alternative Future Strategies
Nowadays, GoPro deploys a focused differentiation strategy. Nevertheless, there are other options for becoming more successful. For instance, expanding a GoPro culture internationally and introducing new services are the tow recommendations for the company. It is advisable to make effort to win followers in new social networks such as the Chinese Renren, Russian Vkontakte, and Latin American Badoo. It should become a number-one priority because it would potentially increase customer base. At the same time, it is essential to introduce new services in order to guarantee financial health of the company in the future. However, because implementing this strategy requires additional investment and vast effort, it could be rated as a second-rated strategy.
Conclusion
Nowadays, GoPro is the dominant company in the action cameras segment. Nevertheless, there is a high risk of being outperformed by competitors due to attractiveness and size of the segment. That is why it is critical to focus on upgrading deployed marketing and management strategies in order to guarantee the further success of the company. That said, it is recommended to supplement a focused differentiation strategy with the introduction of new services and making the GoPro culture popular around the globe by means of creating and promoting accounts in local and regional social networks.