GoPro's market cap is of 1.74B with a price-to-sales (P/S) ratio of 1.928, which is more than double its digital-camera competitors' (Sony, Canon and Nikon) average of 0.885 (, ). The new technology provides an opportunity to GoPro, Inc. to practices differentiated pricing strategy in the new market. Moreover, it uses the technique based on the nature of their associations with customers through promotions that influenced clients to feel like they were a member of a group. Lastly, going direct-to-consumer also gives GoPro full control of the purchase experience. 49-61. This is because the methods of production lead to greater costs than that of competition, which affects the overall profits of the firm. As such, I believe that the main appeal of the subscription service should be frictionless integration with cloud infrastructure, computers, editing software and social media. Shifts are available throughout the week and . Downloads: 130. As shares of GoPro Inc (NASDAQ: GPRO) have sunk since its IPO, investors have been concerned about the company's product strategy and ultimately what the company's competitive advantage is.. In the VRIO analysis we can include the disruption risk under imitation risk. Having highly efficient teams with the know-how not only within their field of expertise, but also of the specific sector in which the business operates, is key to gaining a significant advantage over your competitors. What are GoPro's resources? It provided an evaluation window but not an implementation plan based on strategic competitiveness of GoPro, Inc. SWOT is a static assessment - analysis of status quo with few prospective changes. Outsmart the market with Smart Portfolio analytical tools powered by TipRanks. If GoPro wants to grow, it needs to focus on high-margin, recurring revenue, i.e., GoPro needs to pivot to a subscription business. But they've been held back from a larger market share by brand awareness and loyalty, something investors can't overlook. All rights reserved. High attrition rate in work force compare to other organizations in the industry GoPro, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees. Fool Steve Symington highlighted a few months ago, Do Not Sell My Personal Information (CA Residents Only). While GoPro has started to pivot to a D2C business model, I'd like to see a more aggressive stance on shifting to a direct-to-consumer model. However, the real competition comes from the cell-phone manufacturers such as Apple, Samsung and Google, which have squeezed GoPro's TAM and made have rendered GoPro's cameras obsolete for the masses (more on that later). We make the greatest data maps. Do they led to a sustainable competitive advantage (VRIO analysis)? Compex is the nation's leading record retrieval provider. GoPro is clearly spending a lot more money to promote their website across the internet. In 2020, GoPro's sales coming from, One of the ways GoPro has been engineering the shift to direct-to-consumer is by promoting their e-commerce site. GoPro's U.S has 21.5% piece of the overall industry in advanced cameras/camcorders was 80 basis points above from its competitors (BicLabs, 2018). Like GoPro, Garmin switched to the specialty market. As fellow Fool Steve Symington highlighted a few months ago , GoPro's U.S. market share of 21.5% in digital cameras/camcorders was up 80 basis points from a year ago and included three of the five best-selling products in the category. However, such talk involves traders buying to cover short positions, rather than improvements related to GoPro's core business. This sustainable competitive advantage can help Gopro Confidence to enjoy above average profits in the industry and thwart competitive pressures. I like the GoPro brand a lot, but a brand alone doesn't guarantee success, and GoPro has found that out the hard way in the past couple of years. Competitive advantage refers to the ways that a company can produce goods or deliver services better than its competitors. 2. For greater details connect with us. As mentioned before, the editing software market is extremely crowded and saturated with a number of players. GoPro likewise observed the chance to secure clients by building individual associations with its objective market. It's time for GoPro to pivot to become a software-first camera company rather than hardware-first camera company. Making the world smarter, happier, and richer. The first competitive advantage GoPro enjoys is its niche expertise. This article covers a past game! Kotler & Armstrong (2017) "Principles of Marketing Management Management", Published by Pearson Publications. With this in mind, let us turn to valuation & earnings. Rare "Gopro Confidence" needs to ask is whether the resources that are valuable to the Gopro Confidence are rare or costly to attain. The biggest challenge for GoPro is that it doesn't seem to have much of an advantage in technology. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. What's challenging for GoPro is that its only real competitive advantage is a stronger and more identifiable brand in the action camera market than competitors. Nonetheless, smartphones remain a competitive threat as their cameras continue to improve. By leveraging user-generated content (UGC), GoPro has been able to solicit and repurpose content showing real people using its products. Successful track record of integrating complimentary firms through mergers & acquisition. The pandemic worsened the effect of GoPro's challenges, and the financials reflected that outcome. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off. As mentioned earlier even though GoPro, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture. If they are not rare than both present competitors and new entrants will easily able to get access to them and enter the competitive landscape. ***It is a broad analysis and not all factors are relevant to the company specific. Quotes displayed in real-time or delayed by at least 15 minutes. When the symbol you want to add appears, add it to Watchlist by selecting it and pressing Enter/Return. As it stands, GoPro does not have many competitive advantages. Customer service Our list of competitive advantage examples continues with customer support & service. Instructor: Bill Gardner. GoPro turned to debt during the pandemic, which rose by nearly $70 million to $218 million. Posted: April 14, 2023. Also, its financials do not point to any immediate dangers. Feel free to connect with us if you need business research. The Motley Fool owns shares of and recommends AMBA and GoPro. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Another extension of VRIO analysis is VRIN where N stands non substitutable. The geography and location of GoPro Inc provide it with a cost advantage in serving its customers, when compared to that with the competition. They are just awesome. In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Technology isn't a competitive advantage, but if GoPro's technology is at least on par with competitors', it makes the brand advantage more tangible. Costly to Imitate At present most industries are facing increasing threats of disruption. The company has adopted a combination of cost leadership, differentiation and focus strategies to handle the competitive pressure. GoPro has multiple competitive advantages that make them this successful. Go Pro's macro-environment : The strategically relevant factors in GoPro's macro-environment include economic, social, technological, environmental, legal, and political factors. As shares of GoPro Inc (NASDAQ: GPRO) have sunk since its IPO, investors have been concerned about the company's product strategy and ultimately what the company's competitive advantage is. Again, the size of the video-editing software market is difficult to estimate, and GoPro is a tiny-player in the market. This brand portfolio can be extremely useful if the organization wants to expand into new product categories. In my opinion, GoPro needs to go back to its roots: viral UGC marketing. With that out of the way, let us dive into the current state of GoPro. Beyond niche expertise however, we also find that GoPro enjoys tremendous brand recognition. GAAP losses nearly quadrupled to about $67 million during the same period. The cameras are now powerful and indestructible, and are capable of 360 degree video, 5K resolution, 20MP photos, slow-motion and more (GoPro). Learn More. The Motley Fool owns shares of and recommends AMBA and GoPro. The VIRB line from Garmin arguably has equal features to the Hero 5 line from GoPro, and Kodak is doing some interesting work with 360 video that could compete with GoPro's advanced products. Our immersive learning methodology from case study discussions to simulations tools help MBA and EMBA professionals to - gain new insight, deepen their knowledge of the Sales & Marketing field, VRIO Analysis, case solution, VRIN Solution, Resource based Strategic Management- Value, Rare, Imitation Risk, Organization Competence, and more. Source: GoPro. Combined, all these organisations have employed approximately 689,000 people. This method is called Weighted SWOT analysis. GoPro also financed an online networking stage where everybody could share their encounters through recordings or web journals, making a much more profound feeling of group (Rutgers, 2017). Furthermore, GoPro have the capacity to be such an awesome item, to the point that people would wouldnt fret paying more for it in view of the abilities that it offers. The evolution of cell-phone camera quality has pushed GoPro to have to focus purely on its niche of active lifestyle cameras rather than expand into more general, every-day film cameras. It continued its innovative spree for more than a decade and was the market leader in the industry. GoPro's 10 most popular videos are all at least 3 years old. If its technology doesn't fall behind others entering the market, it could maintain a strong position in action cameras with a good brand alone, but that may not be enough for investors. Valuable Is the resource valuable to Gopro Confidence. The improved resolution gives GoPro a competitive advantage for professionals and enthusiasts who want to shoot photos or videos under such conditions. The VIRB line from Garmin arguably has equal features to the Hero 5 line from GoPro, and Kodak is doing some interesting work with 360 video that could compete with GoPro's advanced products. So, what is the company's competitive advantage, and how will it leverage that in the future? Citi's technology team supports business operations in 100 . Prediction, Preview, and Odds#969 Tampa Bay Rays vs.#970 Cincinnati RedsMonday, April 17, 2023 at 6:40pm EDTWritten by The Tower. You can email us to get an example document of Weighted SWOT analysis. Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of GoPro, Inc. Graphic Packaging Holding Company SWOT Analysis, The Goodyear Tire & Rubber Company SWOT Analysis, Foxconn Technology Group (B) case study solution, SkillsForTomorrow: A Management Team in Crisis case study solution, Taiwan's United Microelectronics Corp. (UMC) case study solution. GoPro's quarterly P/E ratio calculated from Q4 2020 data is 27.6 (, ). However, that isn't to say that GoPro didn't try to expand beyond their traditional camera. In addition, going D2C would make the company leaner, which combined with lower inventory and average days holding inventory, may drive the GoPro stock price up. From a certain point of view, it looks like a high-growth business.. Distribution and Logistics Costs Competitiveness, Yes, as it helps in delivering lower costs, Can be imitated by competitors but it is difficult, Medium to Long Term Competitive Advantage, Position among Retailers and Wholesalers companyname retail strategy, Yes, firm has strong relationship with retailers and wholesalers, Difficult to imitate though not impossible, Yes, over the years company has used it successfully, GoPro: The Disruptive Innovator Faces Challenges. . When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. Within the digital camera market as a whole, GoPro's competitors include Nikon, Sony, and Canon. What Is GoPro Incs Competitive Advantage? Oct. 22, 2014. GoPro, Inc. was an American action camera and software manufacturer founded in 2002 by a young entrepreneur. That being said, I do not think that doubling-down on D2C can be their main source of growth. came from advertising and 5.98% of visits came from paid search, for a total of 7.62% of visits coming from pay-per-click (PPC). : MIT Press, 1962). Copy and paste multiple symbols separated by spaces. 4. Price as of April 17, 2023, 10:00 a.m. This compares to the 12MP on Apple's latest release, the iPhone 12. This comes as a result of GoPro's shift away from traditional retailers and the D2C space (more on that later). Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. 2. Logo Trend Report 2022-2023. The biggest challenge for GoPro is that it doesn't seem to have much of an advantage in technology. Management did not explain why these changes occurred. What does the PEST analysis reveal about the action camera in 2017? However, receivables -- amounts that customers owe to the business -- fell by $93 million during 2020. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*. GoPro is known for its high-quality action cameras and accessories, but also for its amazing UGC. Since falling into penny-stock status one year ago, the maker of compact cameras for extreme adventurers has rallied. That is brought loyalty among consumers in spite of tough competition. Travis Hoium owns shares of GoPro. That's resulted in a loyal following, despite the competition. It is a brand that implies something. The marketing of the products left a lot to be desired. ). N, 2017. Ambarella is really the brains behind GoPro cameras and the app technology GoPro builds trails competitors'. However, that industry it not very large. Total institutional ownership represents 48% of outstanding shares, Vanguard and BlackRock hold 7% and 5%, respectively (, ). Right now the investment in technologies is not at par with the vision of the company. From a technology standpoint, GoPro doesn't really do anything that another company can't copy, which is why its brand advantage is so important. While Polaroid had lost the competitive advantage that it had thanks to its protected technology, GoPro didn't have this advantage to start with. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix. Citi's technology team is growing at lightning speed, and we're looking for talented technologists to help build the future of global banking. Also, with the company worth just $216 million after subtracting liabilities from assets, the liability of a $218 million long-term debt load constitutes a significant burden. Despite the low sales multiple, this ongoing concern makes GoPro stock too dangerous to touch. For industry specific report please feel free to email us or buy a custom report on - "How VRIO is Reshaping Business Strategies", M. E. Porter, Competitive Strategy(New York: Free Press, 1980) What are GoPro's resources? The global digital camera market was valued at only $13.1B in 2020, a small fraction of which is the active-lifestyle camera industry (iMarc). GoPro (GPRO 1.29%) stock benefited significantly from the 2020 stock rally. O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975); L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970), R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986). Cost Advantage of GoPro Inc [Online], Available at: https://www.fool.com/investing/2017/03/27/what-is-gopro-incs-competitive-advantage.aspx, [Accessed on: 16th January, 2018]. We serve thousands of law firms and the largest insurance carriers to provide record retrieval, record summarization, IME interface, and . Founded by Nick Woodman in 2002 after a surfing trip in Australia, GoPro pioneered the active camera industry. It is only by focusing on increasing the customer lifetime value with high-margin, recurring sources of revenue that GoPro is going to grow. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Liability laws in different countries are different and GoPro, Inc. may be exposed to various liability claims given change in policies in those markets. Their perfect season may have ended over the weekend, but the Tampa Bay Rays (14-2) will bring their stellar start into Ohio when they take on the Cincinnati Reds . We make beautiful, dynamic charts, heatmaps, co-relation plots, 3D plots & more. Can provide sustainable competitive advantage. This comes as a result of GoPro's shift away from traditional retailers and the D2C space (more on that later). Expert Answer. GoPro's bread and butter remains its active lifestyle cameras. But they've been held back from a larger market share by brand awareness and loyalty, something investors can't overlook. 10 stocks we like better than GoProWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. As fellow Fool Steve Symington highlighted a few months ago, GoPro's U.S. market share of 21.5% in digital cameras/camcorders was up 80 basis points from a year ago and included three of the five best-selling products in the category. The convertible debt has a $10 strike price, meaning that there is likely to be 10-15% stock dilution. VRIO Framework was first developed by Jay B Barney to evaluate the relative importance of resources to the firm. Taking inspiration from Apple, I think GoPro can build subscription service offering unlimited cloud storage, automatic backups, easy-upload to social media, the Quik video-editing tool and seamless integration into the top video-editing softwares. Over the years, GoPro has been able to build a reputation for its brand as the go-to for small, high-quality yet indestructible camera. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies. Check out- GoPro, Inc. PESTEL / PEST & Environment Analysis, Read - GoPro, Inc. Porter 5 Forces Analysis & Industry Analysis. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance. Competitive advantage is at the core of an organization's performance in markets where there is heavy competition. ). This marketing strategy combined authenticity, visualization and peer-to-peer recommendation all in one, creating tremendous brand recognition from backcountry skiers to new parents. This should open a window of opportunity for GoPro, Inc. in other product categories. This investment has opened new sales channel for GoPro, Inc.. This forced focus has tremendously limited growth at GoPro since they cannot leverage their know-how in any aspect other than by continuing to develop increasingly better iterations of the same product. One of the ways GoPro has been engineering the shift to direct-to-consumer is by promoting their e-commerce site. Technology isn't a competitive advantage, but if GoPro's technology is at least on par with competitors', it makes the brand advantage more tangible. Invest better with The Motley Fool. This site requires JavaScript to run correctly. Send your data or let us do the research. 3 Reasons Investors Should Zoom In on GoPro Stock, The IRS Is Urging Millions of Early Filers to Amend Their Tax Return, 1 Warren Buffett Index Fund Could Turn $100 Per Week into $1 Million, 2 Stocks That Could Join Apple, Microsoft, Amazon, and Alphabet in the $1 Trillion Club, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Copyright, Trademark and Patent Information. This technique included picking particular circumstances, dates, and areas to center their promotions that would create the ideal brand mindfulness. However, I believe that GoPro needs to do a lot more than offer basic editing tools. FAQ - New Privacy Policy. Invest better with The Motley Fool. For the average user, having one GoPro is enough to last a number of years. He holds 19% of the shares outstanding but has 69% of voting rights (CCM). GoPro (NASDAQ: GPRO) stock benefited significantly from the 2020 stock rally. How could it do this? Heres His New Pick, Fool Steve Symington highlighted a few months ago. Government green drive also opens an opportunity for procurement of GoPro, Inc. products by the state as well as federal government contractors. (adsbygoogle = window.adsbygoogle || []).push({}); According to the VRIO Analysis of GoPro Inc, its cost structure is not a valuable resource. While I think that creating an editing system is a nice thing-to-have, I do not think that Quik is the solution to GoPro's growth. Beyond their traditional cameras however, the company also sells a 360 degree camera, the GoPro Max, as well as a digital subscription, a mobile app, camera accessories and apparel. At EMBA PRO, we provide corporate level professional Marketing Mix and Marketing Strategy solutions. [Online], Available at: https://www.quora.com/What-is-a-GoPro-What-are-the-advantages-and-disadvantages-of-this-camera, [Accessed on: 16th January, 2018]. Please, Founded in 2002, GoPro (NASDAQ: GPRO) is the pioneer in active lifestyle cameras, practically inventing the market segment (. For real growth, GoPro needs to build an ecosystem. The Motley Fool->. It also released its quadcopter drone, KARMA in 2016 (GoPro, 2018). GoPro Inc has a well-established IT system that ensures efficiency in its internal and external operations. The VIRB line from Garmin arguably has equal features to the Hero 5 line from GoPro, and Kodak is doing some interesting work with 360 video that could compete with GoPro's advanced products. The subscription, which costs $49.99/yr, offers unlimited cloud storage, access to their video editing app Quik, livestream capabilities, free "no-questions-asked" camera replacement and discounts on all accessories and products (, GoPro is undeniably the market-leader within the active lifestyle camera industry. Technology isn't a competitive advantage, but if GoPro's technology is at least on par with competitors', it makes the brand advantage more tangible. When you think of action sports, whether on TV or in your own life, brands like GoPro and Red Bull seem to always be around the action. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Moreover, thanks to the Apple Watch, Apple now builds a product that can function under unstable conditions. Automation of activities brought consistency of quality to GoPro, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market. Cost basis and return based on previous market day close. GoPro's bread and butter remains its active lifestyle cameras. Since its 2014 peak of $86.97, the stock has dropped by 87.6% to $10.83 as of publication. This increase in market share came despite improving offerings from competitors. This occurred as research and development (R&D) costs fell by less than 10%, and general and administrative expenses (G&A) rose by more than 2% from 2019 levels. As fellow Fool Steve Symington highlighted a few months ago, GoPro's U.S. market share of 21.5% in digital cameras/camcorders was up 80 basis points from a year ago and included three of the five best-selling products in the category. What could it do to be more innovative and successful, and in doing so, fend off the low-cost competition? (1995) "Looking Inside for Competitive Advantage". ET, 3 Reasons Investors Should Zoom In on GoPro Stock, The IRS Is Urging Millions of Early Filers to Amend Their Tax Return, 1 Warren Buffett Index Fund Could Turn $100 Per Week into $1 Million, 2 Stocks That Could Join Apple, Microsoft, Amazon, and Alphabet in the $1 Trillion Club, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Fool Steve Symington highlighted a few months ago, Copyright, Trademark and Patent Information. Even though GoPro, Inc. is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. GoPro: The Disruptive Innovator Faces Challenges case study is a Harvard Business School (HBR) case study written by Rishi Dwesar, Geeta Singh. ***It is a broad analysis and not all factors are relevant to the company specific. Days inventory is high compare to the competitors making the company raise more capital to invest in the channel. GoPro has the exact opposite problem that Netflix and Disney have: it has the hardware but does not have the software. It's not clear that GoPro can leverage its brand to gain a significant share in drones without making a better product than the Karma of today. When they repeated some of GoPros highlights, and even at times brought down the retail estimating for the duplicated items, GoPro had just established itself as the predominant brand in contrast with its substitutes that would be advised to HD video determination and bigger GB memory (BicLabs, 2018). In addition to this, days holding inventory spiked in the first half of 2020 as the company was negatively impacted by COVID, however, total inventory and days holding inventory have both significantly dropped in the second half of 2020 (CCRM). For one, going D2C would enable GoPro to control their inventory and reduce their average days holding inventory. Do they led to a sustainable competitive advantage (VRIO analysis)? *Stock Advisor returns as of February 6, 2017. Conduct an external environment analysis choosing either (a) a macro-environment analysis or (b) a Porter's 5 forces model: 3. If its technology doesn't fall behind others entering the market, it could maintain a strong position in action cameras with a good brand alone, but that may not be enough for investors. The Motley Fool has the following options: short January 2019 $12 calls on GoPro and long January 2019 $12 puts on GoPro. Mutual Fund and ETF data provided byRefinitiv Lipper. Nonetheless, GoPro enjoys and maintains tremendous brand recognition within the market. There's no question Karma is well behind industry leader DJI's products from a technology standpoint, and the Karma's recall didn't help. Download Print. In addition to this, days holding inventory spiked in the first half of 2020 as the company was negatively impacted by COVID, however, total inventory and days holding inventory have both significantly dropped in the second half of 2020 (. Will Healy has no position in any of the stocks mentioned. For comparison, Canon has 1.09% of visits coming from advertising and 3.35% coming from paid search, for a total of 4.42% of visits coming from PPC. Beyond their traditional cameras however, the company also sells a 360 degree camera, the GoPro Max, as well as a digital subscription, a mobile app, camera accessories and apparel. Grand View Research forecasts a compound annual growth rate (CAGR) of 17% through 2025. Next parts of the article present in detail how GoPro Inc can configure primary and/or secondary value chain activities to achieve the desired cost and differentiation objectives. GoPro uses Product/Service Differentiation Competitive Advantage, which according to Lamb et al is, "the provision of something that is unique and valuable to buyers beyond smiley offering a lower price than that of the competition" (Lamb, 25, 2015). GoPro practically invented the active lifestyle camera and created the market for it. It was founded as Woodman Labs, inc. GoPro eventually focused towards sports genre.