INTRODUCTION
Company History
GoPro Inc. is an American producer of action cameras and accessories. The GoPro camera is a
highly specialized device that enables users to capture high-quality photo and video content during
extreme-action sports and outdoor activities. Nick Woodman founded the company in 2002, after
going on a surfing trip and realizing the lack of high-quality sports cameras. He created the first
GoPro HERO 35mm camera system in 2004. This camera garnered $150,000 in sales. Two versions
of the camera and three years later, GoPro’s revenues skyrocketed to $3.4 million. Since 2004, 12
versions of the camera have been launched, along with different accessories. Revenue has still been
growing exponentially from $64 million in 2010 to $1.394 billion in 2014, making GoPro
America’s fastest growing digital imaging company (Forbes, 2013). In 2014, the company decided
to go public. GoPro’s shares sold for $24, at which price the company was valued at $2.95 billion,
“making GoPro the biggest initial public offering of a consumer electronics company in more than
20 years” (Lapowski, 2014).
The Company Today
The GoPro cameras today are known for their small size, portability, ease-of-use, and versatility;
the latest version comes in waterproof housing and can withstand extreme temperatures and
pressure. Also, it can be wearable or mounted on ski helmets, surf boards, bikes, etc. Mounts and
other accessories are sold for almost any activity. The built-in Wi-Fi allows users to activate the
camera using a remote, and the GoPro app allows users to playback and share their content on
smartphones and tablets. The products can be bought on their website, in major retailer stores, and
e-commerce websites. The company has also created GoPro Studio, which is a simple video editing
software that enables amateur users to edit their content. Woodman, the CEO, expressed interest in
transforming GoPro into a media company. In this direction, the GoPro Channel was created to
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broadcast the “best-of” content in several categories from users around the world, which can be
found on their website and on YouTube. Active sports and outdoors enthusiasts are able to share
their stories, passions, and adventures that were captured by the GoPro, for the world to see.
GENERAL ENVIRONMENT
Political/Legal
As a front-runner in a high-technology industry, GoPro’s success relies heavily on its ability to obtain
patents and other intellectual property rights. It is also critical to maintain adequate legal protection to
these patents and intellectual properties in both the United States and internationally. Countries that have
little to no degrees of legal protection for patents and intellectual properties may have negative impacts
on GoPro’s international business expansion and its overall financial performance (GoPro, 2014).
Economic
Many electronics manufacturers generate a big portion of their total revenues internationally. Their
profitability is often subjected to foreign exchange rates, trade restrictions, and other impacts from
global economic stability or instability. The world economy has improved since the market
meltdown in 2008. Economists have observed a moderate and balanced growth trend in recent two
years (UNDESA, 2015). Better economic performance allows people to have more disposable
income to purchase recreational devices like action cameras. This, in turn, will encourage
manufacturers to invest in more research and development.
Social/Cultural
The rise of social media has transformed the way people communicate, engage, and live. There are
nearly 1.4 billion Facebook users, 500 million tweets per day, 70 million photos and videos sent on
Instagram (Bullas, 2015). A massive number of photos and videos are shared through various social
media channels everyday, which enables electronics companies to reach their targeted consumers by
encouraging fans-for-fans sharing (Kohler, 2015). Social media has also affected the way people shop.
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A survey done by the Consumer Electronics Association showed that about 24% of the consumers will
refer to social media before they make purchases of electronics; while 65% of people who are highly
engaged in social media will reply on these networks regarding their consumption (Kohler, 2015).
Therefore, it is important for GoPro to utilize this trend to stand out from competitors.
Technological
Sales in the photographic equipment market are expected to experience a declining trend over the
next few years. Total revenue is expected to drop from $35.7 billion in 2013 to $28.1 billion in 2018
(MarketLine, 2015). On the other hand, smartphone cameras have become very popular because of
the carry-everywhere and easy-to-upload features. Traditional camera producers are now exploring
new markets and experimenting new products to keep up with the market trend. Wearable
electronics such as the iWatch, Google Glass, and Galaxy Gear have been introduced and gained
popularity. Wearable camera market has also been discovered.
Demographic
A number of demographic variables are playing key roles in deciding the success of camera
manufacturers. Based on different income categories, age groups, occupations, technological savvy,
as well as lifestyles, companies should launch models that address the needs and features of that
particular segment (Shankar and Jagannath, 2013). Researchers have found that young and middleage consumer groups usually demonstrate higher interests in acquiring the latest technologies and
innovations. However, Shankar and Jagannath (2013) also suggested that income level does not
play a critical role in digital camera purchases. Action cameras, like GoPro, are usually targeting on
athletes, surfers, and people who are fond of outdoor activities regardless of age and occupations.
INDUSTRY ENVIRONMENT
Table 1 below summarizes GoPro’s industry environment.
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TABLE 1: The Industry Environment
Threat of new
entrants
High
• Besides companies that are specializing in action sports cameras like Contour and Drift Innovation,
big technology companies like Sony and Apple are also entering into this field.
• Sony launched its first action camera in 2012 and it has four main action camera products now.
Apple was awarded a patent for action camera that addressed some specific weaknesses of GoPro
early in 2015.
Rivalry
High
• GoPro is facing three types of competitors: brand competitors, product competitors and generic
competitors (Cuevas et al., 2014).
• Companies like iON and Drift Innovation are known as action camera providers, which offer
products that can be direct substitutes to GoPro cameras.
• Traditional camera companies have added action camera product lines to keep up with the market
trend. The Sony Action Cam product line is targeting the same premium action camera market as
GoPro. Polaroid offers action cameras to these who are on a budget.
• Generic competitors are mainly smartphone producers like Apple and HTC. Apple’s interest in this
market is shown by their obtaining a patent that targets some weaknesses in GoPro’s camera
(Maan, 2015). HTC launched HTC Re, which targets lower budget consumers that look for less
sporty but still mobile action cameras. Bargaining
power of buyers Threat of
substitutes
High
• GoPro products are pricey because they provide professional mounts and high quality videos to
professional athletes and people who are fond of extreme sports and adventures.
• Cheaper alternatives are threatening GoPro’s market share. The Chinese smartphone maker,
Xiaomi, launched Yicamera, which is lighter and half the price of the entry-level GoPro camera
(Millward, 2015). The Sony HDR AS30V offers enhanced connectivity features, post-shooting
facilities, and a more affordable price.
• Apple launched iPhone 6s, which has a built-in 4K camera. With more mountable accessories,
people may choose to not carry an extra action camera but their phone. Low
• Several key vendors are dominating the market. Consumers with different price expectations and
needs can switch between high-end products such as GoPro cameras to lower-budget alternatives
like Polaroid.
• An analyst from Sterne Agee said that GoPro’s name is “synonymous with the market” (Seitz,
2015). In other words, the selection becomes very limited when a consumer is looking for a
premium quality action camera. Bargaining power
of suppliers
Medium to high
• Ambarella Inc. is the sole-sources supplier of image-processing chips of GoPro. There is a high
risk of disruption in operation if Ameralla delay or stop the supply.
• GoPro sources all its products’ components to third party suppliers. The chance of suppliers
evolving into competitors is high as well. Sony, as an experienced supplier of high quality image
processing chips, has already become a key competitor today.
• GoPro’s situation in assembling contracts is easier. Two Taiwanese contract-manufacturers, named
Chicony Electronics and Sky Light, assemble GoPro cameras. Alternatives, such as Foxconn, have
shown a big interest in GoPro’s business (Chou, 2014).
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CURRENT SITUATION / CORE COMPETENCIES
Innovation and technology
GoPro designs its hardware and components, which include image silicon processors, new image
sensors, and lenses. Throughout its existence, the company has obtained 77 patents in the United States
and internationally, which cover physical structures, image processing, firmware, software, accessory
structures, as well as ornamental aspects of the devices (GoPro, 2015). In its niche market, GoPro has
been developing the most advanced technologies. For example, in the latest camera HERO4, GoPro
added the 30/6 burst photo features that allowed users to capture 30 photos in 6 second with only one
click (Duggan, 2015). The HERO4 product line is also regarded as the best pick for action cameras in
the market today, which proves that the brand is a quality leader in the industry (Rose, 2015).
Unique advertising and branding
One of GoPro’s core competencies is its marketing strategies. The company encourages and rewards
GoPro camera users for sharing their compelling content on social media such as Facebook and
Instagram (GoPro, 2015). GoPro has gained great success on YouTube as well. Its official channel
has attracted over 3 million subscribers and more than 850 million views by featuring videos that are
uploaded by its customers (Kohler, 2015). GoPro also collaborates with influential athletes, celebrities,
and brand names that use GoPro cameras to share stories and events with their fans and customers
(GoPro, 2015). Those strategies attract public awareness and build a positive brand image that GoPro
is not only a company making cameras but represents a lifestyle. This creates value for the company.
CURRENT STRATEGIES
Business Level Strategy: Focused Differentiation
GoPro sells highly specialized action cameras to a niche market segment of active, extreme sports,
and outdoors enthusiasts, such as surfers, skiers, skydivers, scuba divers, and others. When the
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company initially launched, it was the first of wearable camera technology. This cutting edge
technology gave athletes and other extreme-action enthusiasts the ability to capture their own
activities and adventures close-up and in high quality. This was something professional photographers
could not do with the available camera technology at the time (Heater, 2014). The initial success of
the GoPro camera has prompted it to become the leading name in the market of action and wearable
cameras (Wyndham, 2015). Since the company’s founding, it has continuously integrated innovative
features and increased quality to their action cameras to keep up with, if not surpass, the advancing
camera and video technologies of modern times. These innovations have allowed the company to
flourish, selling $30 GoPro 35mm cameras (the first version) back in 2004 to $500 GoPro Hero4
Black camcorders today (the latest and most expensive version). With innovation at the heart of the
company, they design their own hardware, such as custom sensors, to differentiate their products from
others in the industry. The company also uses unique marketing techniques, such as video-enabled
point of purchase to showcase the product in retail stores, which has been used only by very few
companies. Although wearable camera technology is hastily moving forward and other companies are
taking notice, GoPro is still currently the leading brand name and consumer choice in this narrow
market (Heater, 2014).
Corporate Level Strategy: Transforming into a Media Company
Moving forward, Woodman, the CEO, has expressed his strategy of transforming the company from a
camera-maker to a lifestyle and media brand (Burns, 2015). The company has developed the perfect
connection among content management, editing and sharing by including features in the devices and
apps which allow user-generated content to be easily shared on users’ social networks, which in turn
serves as a branding tool. Further, the company created the GoPro Studio editing software and GoPro
Channel platform for broadcasting content. The company is also seeking for opportunities to partner
with other technology companies to create more platforms for viewing and sharing user-generated
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content and marketing. GoPro is launching their Channel on the Xbox One so that Xbox Live
members can stream content and purchase more items. This move towards becoming a media
company is a value-creating strategy. This is because more uses and features are being offered to
consumers to differentiate from competitors and will allow GoPro to continue to dominate the
market. Further, using these various platforms for sharing content serves as user-generated
advertisements for GoPro. This also allows users who share their stories and adventures of using the
camera gain popularity and visibility on the web, which also creates awareness for the brand.
STRATEGIC CHALLENGES
Easily replicable products and features
Although GoPro has had impressive revenue growth over the past couple years, it is highly probable
that competitors within the technology industry will fight back by creating products that have
similar, if not better, capabilities. Further, as more high quality camera and video functions are
being built into smartphones and tablets, single-function camera devices are losing their share of the
market. GoPro has to face competition not only in producers of cameras, such as Canon, Nikon, and
Olympus, but those of smartphones as well, such as Apple and Samsung. These companies are
much larger and more established than GoPro, boasting substantial market share, strong branding,
high customer loyalty, diversified product lines, and significant resources in marketing, research
and development. These advantages may allow them to compete more effectively than GoPro can,
potentially causing price wars, reduced profit margins, and ultimately cessation of the business.
Reliance on a single revenue source, product sales
As of the present, GoPro lacks a diversified portfolio of products or services to collect revenues
from. Sales from the camera devices and accessories make up essentially all of the revenue on their
Income Statement. Therefore, macroeconomic factors or even competitor reactions that
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significantly decrease the revenues from these devices and their accessories can drastically harm the
foreseeable future of the business. Although GoPro has the ability to add new devices or accessory
lines to its product mix and expand, there is the risk that these new offerings may not capture the
market or compete with rival offerings.
Reliance on third-party, sole-source suppliers for components
Currently, GoPro does not manufacture any of the components of its camera devices and accessories,
and instead sources them from third-party suppliers. Some of these suppliers can become competitors,
which is the risk in sourcing some components from single suppliers. Further disruptions in the supply
chain can adversely affect inventory and operations. Consumer demand increases, capacity constraints,
component price increases, component quality, delays in distribution, and even natural disasters can
inhibit a smooth flow of components to be made into GoPro’s finished products. Should any of these
situations occur, the company must seek alternative suppliers.
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