Strategic Management

Instructor: Dr Tony Gibeily

Student: Rabih Darwiche
ID: 201910617
Fall 2020 – 2021
About GoPro:
• GoPro, Inc. is an American technology company founded in 2002 by Nick
Woodman. It manufactures action cameras and develops its own mobile apps
and video-editing software
• Stock price: GPRO (NASDAQ) $7.16 +0.31 (+4.53%)
• Founded: 2002, California, United States
• Headquarters: San Mateo, California, United States
• Annual Revenue: 1.18 billion USD (2017)
• Net income: 96 million $
• CEO: Nick Woodman
• Type: public
• Number of employees (2019): 964

An overview of GoPro:
GoPro is a leading company when it comes to sports camera. It was founded in 2002 by
Nick Woodman when he was on a surfing trip and searched for a better way to film
himself and his friends surfing. From cameras to apps and accessories, Gopro created a
very special experience for her users and community. Few weeks ago they launched the
newest version Hero 9 available now in the stores for 450$ a very good price comparing
it with the specifications of the camera. Gopro is now an international company that has
sold over 26 million cameras in more than 100 countries.

GoPro’s Strengths – Internal Factors

1. GoPro is the dominated in her field (portable sports cam) leading the market
since 2002
2. Have added value and carry a strong name that allows them to charge higher
prices
3. GoPro is an easy to make product (low cost / more profits)
4. GoPro have a strong supply chain and have employees who fit the team culture
and managers who help them grow
 5. Superb performance in new markets: GoPro built expertise at entering new
markets and making success of them
6. GoPro can scale up and scale down based on the demand conditions of the
market

GoPro’s Weaknesses – Internal Factors

1. Due to the lack of market, costs are expensive (few competitors allows market to
drive price)
2. Must always innovate to stay the leaders that always offers something new to
the market
3. Need huge amount of money for researches in new technologies and
development
4. The target market of gopro is not large enough (athletes and sports persons)
5. The shape of the camera is small and they can’t make it bigger to add a better
battery or make a good LCD display

GoPro’s Opportunities– External Factors

1. The new technology provides an opportunity for Gopro to use the pricing
strategy as they want
2. GoPro is able to market itself because it’s an essential use for Athletes and
outdoor persons, what I mean here is that Gopro solved a problem for these
category
3. They offer each year a new product or an updated version of the old one so that
they reach new costumers and new markets (they did for example the GoPro
fusion specified for the sky divers)
4. GoPro also is now a community not only a trend is the action cameras. You can’t
be a professional diver, skier, racer, soldier… without having a GoPro to be one of
this community who know well what they want to film and post for others to see
GoPro’s Threats – External Factors
1. The market is full of fake gopro’s or other copied cameras with another
name much cheaper (50 to 90 $)
2. New entrants or substitutes offer similar products like DJI, SONY and 4K
3. DJI made a Flying cam that could film much better than Karma (flying Cam
made by GoPro)
4. Gopro is being sold in Camera and accessories stores, so the sales will try
to sell what they want to sell (other brands with lower price) and will not
make any efforts to sell GoPro that is considered expensive for customers
who don’t really know that they are getting what they are paying for

5 forces of porter
Bargaining Power of Suppliers:
The bargaining of suppliers is MODERATE as the suppliers for digital camera require
technology and skills. Suppliers might change if the company decided to change in the
product (part, model...) and also if the supplier of any essential part have decided to
stop producing for GoPro, they have to change the whole scenario of their operations
and this makes the supplier in the dominant position.

Bargaining Power of Buyers:

The bargaining Power of buyers is also MODERATE because the number of sellers is
limited and the number of buyers exceed them but we should not forget that the buyers
have options to choose from. So here we can say that we have a win-win situation for
both sides, buyers can’t buy a digital camera from anywhere but they are also looking
for the high level companies to get what they are paying for.

Threat of new entrants:

The threat of new entrants is LOW because of the capital and expertise required to
enter the digital cameras field. Different and complex types of equipment is required to
manufactory high quality cameras especially action cameras that need many researches
and technical complicated stuff to have good results. Not to forget the strong name and
distribution network that GoPro have.

Threat of substitutes:
The threats of substitutes for GoPro and for the digital camera industry in general is
HIGH, this market is down by 22% due to the cameras in the mobile phones that can
replace portable cameras especially that they already have them built in their mobile
phones with zero $ as extra cost and also some mobiles have multiple cameras and
water proof.

Competitive rivalry:
The industry rivalry is HIGH because competition could threaten GoPro’s market share
especially in front of competitors like Canon (grabbing 43.4 percent of the market share)
and Nikon (19.1 percent market share) not to forget Fujifilm and other class A brands.
All the competitors are strong in technology, financing and developing new products.
7’s of McKinsey

1. Shared value: GoPro core values comprise “Trustworthiness, curiosity, creativity,

and future-mindedness’’

2. Structure: GoPro structure type is LLC: a blend of partnership and corporation

(have less regulation)

3. Systems: GoPro use a combination between marketing, sales and operations

system

4. Strategy: Make customers feel that they are part of a great community

5. Skills: GoPro is able to upgrade to new versions every year they have a new
product, they are problem solvers and have perfect marketing plan

6. Staff: GoPro staff are well trained and have experience in the field (sports +
cameras)
 7. Style: GoPro use a Consultative leadership style. They do a discussion between
team members, team leaders and the CEO and the high management take the
final decisions after the meetings

PESTEL

GoPro PESTEL analysis is an important tool to analyze the macro environment of the
organization. Changes can have a direct impact on GoPro and other players in the
photographic equipment and suppliers. PESTEL analysis also provide great detail about
operating challenges GoPro will face.

Political:
GoPro is operating in photography and supplies in more than 100 countries and expose
itself to different types of political environment and political system risks. To achieve
success, GoPro have to analyze closely many factors before entering or investing in new
markets:
 Level of corruption
 Political stability
 Importance of photography sector in the country’s economy
 Pricing regulations in this market
  Taxation (tax rates)
 Industrial safety regulations in photographic equipment and supplies

Economic:
Gopro can use country’s economic factor such as growth rate, inflation and industry
economic indicators such as photography industry growth rate, consumer spending,
savings rate, interest rate and foreign exchange rate. Gopro should consider the
following factors:
 Efficiency of financial markets (does GoPro needs to raise capital in this market?)
 Labor productivity and cost in the economy
 Inflation rate
 Unemployment rate
 Economic growth rate
 Education level in the economy Exchange rates & stability of currency
 Interest rate
 Business cycle stage

Social:
Each country has a different culture and way of doing things, this difference impacts the
culture of an organization. GoPro must understand the customers of a given market and
make a different marketing design for each culture (example: people living in the united
states have different lifestyle for others in Africa). Social factors that should be analyzed
by GoPro:
 Culture and gender roles
 Attitudes of costumers in the new market
 Education and skill level of the population
 Entrepreneurial spirit and if they encourage entrepreneurship or regret any new
ideas or if they don’t take risks

Technology:
We all Know that technology is fast disrupting industries across the world (in all fields
like transportation, electronics and many others). In any firm they should not only do
technological analysis of the industry, but they also should analyze the speed at which
technology disrupts that industry to know well how much time they have to invest and if
the firm is going to be profitable or not. GoPro should understand the following:
  What competitors are doing recently in this field (technology)
 How much time and money we should spend on researches and studies in
technology
 Do GoPro have what it takes to lead in the sports cameras and keep innovating
and creating new stuff that will be disruptive for the competitors?
 How to keep the balance between time and technology

Environment:
Environmental standards are different from market to market which can impact the
profitability of the organization in those markets.
Before entering new markets, GoPro should carefully evaluate the environmental
standards that are required to operate in those markets:
 Climate change (USA/KSA)
 Weather (Canada/Africa)
 Air and water pollution regulation in GoPro industry
 Recycling

Legal:
For sure, laws and legal framework are different between countries. They should be
good enough to protect the intellectual property rights of an organization and not lead
to theft of the organization secrets and rights. Not to forget that law help the
organization in some fields and doesn’t in the same filed in another market. Some of the
legal factors that GoPro leadership should consider while entering a new market are:
 Copyright and discrimination law
 Employment law
 Data protection
 Consumer protection
Not to forget that GoPro is a huge organization with many employees, suppliers and
customers around the world, they should know very well what they own and what they
owe.

Core Purchasing Criteria, Core Success Factors and Core

Competencies
 CSF(a) CPC(b)

CC(c)

CSF: Core Success Factors

CPC: Core purchasing criteria
CC: Core Competencies

Core Competencies:
Core competencies are the capabilities and recourses that gives the organization
competitive and strategic advantages.
GoPro is offering a very unique experience. They innovated a product very stylish
that solved a problem, also they made a mobile application (GoPro + Quick) to make the
experience using GoPro more pleasant. GoPro have multiple unique products offered in
different prices and packages and they are the organization leading in sports cam.

Core Purchasing Criteria:

 GoPro implement purchasing strategies in order to be cost killers and
deliver products in perfect quality and fair price. This method attracts customers
to buy GoPro items and upgrade to new versions.
GoPro is affordable compared to the quality and resolution you are
obtaining, items are available all over the world and easy to obtain or ship (small
box and light weight). GoPro is also guaranteed for one year after purchasing and
customers can but the accessories that they need or just go for the full package
bag.

Core Success Factors:

Many factors made GoPro succeed and become a multinational company
available in more than 100 countries with more than 50 famous products from GoPro to
Gopro session and Gopro fusion. The following are the main reason of GoPro success:

Community
Gopro made a special community for all the users how share what they have as
data on social media and GoPro application with more than 17 million subscribers
(Instagram, Facebook, quick…) they also make competitions for users like the one-
million-dollar challenge: each time they launch a new product, all you have to do is
capture a short video using the product and share it on the web and then they select up
to 20 videos and give the winners one million $ as a price.

Price
Gopro items are affordable for everyone, you are getting what you are paying for
and you sell back your GoPro or upgrade to new versions without paying much. They
also offer a variety of accessories you can buy in full package or separately (approximate
cost is between 20 and 30$ for the piece).

Resolution
4K resolution with 120 frames per second is not a joke! Video captured by a
GoPro can make the viewer feel like it currently happening, you can notice all the details
clearly in normal mode, slow-mode or fast forward mode. Not to forget the timelapse
option and the night mode in hero 9 launched in 2020

Durability
 GoPro is a durable product because they made it unbreakable, water and dust
proof so you don’t have to worry about anything when you mount the camera on your
car, bicycle or even beside the wheels of a motor cross! It works well also in high
temperature and low temperature conditions and resist water up to 10 meters without
a cover (30 m with the diving cover)

Conclusion
GoPro, The American technology company founded by Nick Woodman in
2002 is considered a disruptive technology who lead the market of action and
sports cameras since 2002 till now obtaining a huge amount of profits worldwide.
But the new financial reports unfortunately show that the company is not
performing well and will face many problems in the future for many reasons I
would like to mention two of them:
1- They are not innovating something really new especially from hero 5 till
hero 9 they just did some updates that are not that essential
2- The competitors that started offering similar products in lower prices

References:
https://gopro.com/en/us/
https://en.wikipedia.org/wiki/GoPro#:~:text=GoPro%2C
%20Inc.,apps%20and%20video%2Dediting%20software.