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. GoPros U.S has 21.5% piece of the overall industry in advanced cameras/camcorders was 80 basis points above from its competitors (BicLabs, 2018). $13 Hourly. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. 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. Grand View Research forecasts a compound annual growth rate (CAGR) of 17% through 2025. Value of the Resources Going direct-to-consumer would be beneficial to the company for a number of reasons. This comes as a result of GoPro's shift away from traditional retailers and the D2C space (more on that later). It leads to a 2X2 matrix also known as SWOT Matrix. SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the company such as marketing, finance, operations, management information systems and strategic planning. 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). GoPro has multiple competitive advantages that make them this successful. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. 2023, Nasdaq, Inc. All Rights Reserved. Nonetheless, while GoPro could survive as a company, an eroding competitive advantage likely dooms this consumer discretionary stock. David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now and GoPro wasn't one of them! 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. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Given the scale of expansion and different geographies the company is planning to expand into, GoPro, Inc. needs to put more money in technology to integrate the processes across the board. The company's digital-camera competitors have trailing P/E ratios of 32.83 for. Strong Brand Portfolio Over the years GoPro, Inc. has invested in building a strong brand portfolio. 2023 FOX News Network, LLC. Moreover, with Apple and Samsung producing more products that are better designed for extreme activities, GoPro's competitive advantage faces a constant threat. Words: 2326. GoPro took advantage of its competitors by breaking the ground, an exclusive line of the capture device. While GoPro's total addressable market (TAM) is rather difficult to calculate, it's a fair assumption to make that the company's TAM is small. Intangible resources of Gopro Confidence are skill and administrative level of managers, brand names and goodwill of the company, intellectual property rights, copyrights, trademarks, and special relationship with supply chain partners. From a certain point of view, it looks like a high-growth business.. GoPro (NASDAQ: GPRO) stock benefited significantly from the 2020 stock rally. Written by Yes, company has organizational skills to extract the maximum out of it. While institutional ownership may appear low, I expect institutional ownership to increase if GoPro gives signs of a promising turnaround effort. I'd like to see a GoPro marketing campaign focused on the achievements/incredible moments of everyday people, not just elite athletes. Liability laws in different countries are different and GoPro, Inc. may be exposed to various liability claims given change in policies in those markets. : MIT Press, 1962). In addition to this, GoPro has also been made irrelevant by the incredible advancement in cell-phone camera technology. In addition, GoPro's Price/Book ratio (mrq) is of 7.98, which is far higher than its digital-camera competitors' average of 1.52 (. The company's digital-camera competitors have trailing P/E ratios of 32.83 forCanon, 38.69 forNikonand 14.02 forSony. FAQ - New Privacy Policy. GoPro's 12-month trailing P/E ratio isundefined. Recent technological developments by GoPro, Inc. competitors Technology's impact on product offering Impact on cost structure in Photographic Equipment & Supplies industry Impact on value chain structure in Consumer Goods sector Rate of technological diffusion Article continues after ad Environmental Factors that Impact GoPro, Inc. However, some of the hype has faded: GoPro's most recent Youtube uploads only average about 70K views compared to its older videos. In addition, GoPro's Price/Book ratio (mrq) is of 7.98, which is far higher than its digital-camera competitors' average of 1.52 (Yahoo Finance). When the symbol you want to add appears, add it to My Quotes by selecting it and pressing Enter/Return. GoPro Inc's competitive advantage strategies can be understood in light of Michael Porter's generic and intensive growth model. 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. Within the digital camera market as a whole, GoPro's competitors include Nikon, Sony, and Canon. To date, it has sold over 26 million action cameras. The Motley Fool->. But they've been held back from a larger market share by brand awareness and loyalty, something investors can't overlook. If investors did not believe GoPro had any possibility to grow, they'd have jumped ship. And given competitors like Garmin (GRMN 0.68%) and Eastman Kodakentering the digital action-camera market, the concern is justified. Conduct an external environment analysis choosing either (a) a macro-environment analysis or (b) a Porter's 5 forces model: 3. SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself. A resource is non substitutable if the competitors cant find alternative ways to gain the advantages that a resource provides. The nature of GoPro's competitive advantage GoPro manufactures action cameras, mobile apps, and video editing software. According to the VRIO Analysis of GoPro Inc, its cost structure is not a valuable resource. Since its 2014 peak of $86.97, the stock has dropped by 87.6% to $10.83 as of publication. 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. The marketing of the products left a lot to be desired. 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. Although not perfect competitors, the comparison is still worth noting as GoPro seems to be in-line with its competitors (at least when using GoPro's quarterly P/E ratio). The GoPro brand is synonymous with action cameras as the Nick Woodman-led company essentially created this market by launching the first commercially available action camera back in 2002. 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. How do you measure and communicate your competitive advantage in your social media ad messages? 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. One of the ways GoPro has been engineering the shift to direct-to-consumer is by promoting their e-commerce site. The Motley Fool has a disclosure policy. This sustainable competitive advantage can help Gopro Confidence to enjoy above average profits in the industry and thwart competitive pressures. GoPro is changing the ways athletes do sports, pilots fly planes, travelers discover, and entertainers attract. Starting just $19. Hardware isn't driving profitability or growth. Another extension of VRIO analysis is VRIN where N stands non substitutable. 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). If you enjoy talking and engaging with people, our Part Time Product Demonstrator role may be exactly what you're looking for! As shares of GoPro Inc ( GPRO -0.83%) have sunk since its IPO, investors have been concerned about the company's product strategy and ultimately what the company's competitive advantage is.. 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 . The Motley Fool has the following options: short January 2019 $12 calls on GoPro and long January 2019 $12 puts on GoPro. Industry Transformation and Competitive advantages. Targeting the outdoors and the extreme-sports community, GoPro has made a name for itself by offering high-quality yet little, impact-resistant cameras that can be attached on the body, on helmets, or just-about anywhere else. The geography and location of GoPro Inc provide it with a cost advantage in serving its customers, when compared to that with the competition. So, what is the company's competitive advantage, and how will it leverage that in the future? The cameras are now powerful and indestructible, and are capable of 360 degree video, 5K resolution, 20MP photos, slow-motion and more (. As it stands, GoPro does not have many competitive advantages. 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. Cost basis and return based on previous market day close. The cameras are now powerful and indestructible, and are capable of 360 degree video, 5K resolution, 20MP photos, slow-motion and more (GoPro). Published: 27 August 2019. To GoPro's credit, the company has already been focusing on shifting to a D2C business model. That's right -- they think these 10 stocks are even better buys. The launch of the Karma drone really highlights this technology challenge. Competitive advantage is at the core of an organization's performance in markets where there is heavy competition. Expert Answer. 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. Since its 2014 peak of $86.97, the stock has dropped by 87.6% to $10.83 as of publication. Adobe Premiere, iMovie and Sony Vegas are just a couple of the hundreds of movie-editing software packages that exist. There are many ways to achieve a . For real growth, GoPro needs to build an ecosystem. GoPro turned to debt during the pandemic, which rose by nearly $70 million to $218 million. GoPro's bread and butter remains its active lifestyle cameras. 9, Issue 4, pp. GoPro (GPRO 1.29%) stock benefited significantly from the 2020 stock rally. Citi's technology team supports business operations in 100 . Decreasing cost of transportation because of lower shipping prices can also bring down the cost of GoPro, Inc.s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share. 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. Designed by Elegant Themes | Powered by WordPress, Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), https://biclabs.com/insights/change-of-competitive-advantages/foreseeing-change-polaroid-gopro/, https://www.fool.com/investing/2017/03/27/what-is-gopro-incs-competitive-advantage.aspx, https://www.quora.com/What-is-a-GoPro-What-are-the-advantages-and-disadvantages-of-this-camera. GoPro is clearly spending a lot more money to promote their website across the internet. This investment has opened new sales channel for GoPro, Inc.. Leaders at Gopro Confidence can use VRIO to build sustainable competitive advantage by better understanding the role of resources in Gopro Confidences overall business model. 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. If GoPro wants to grow, it needs to focus on high-margin, recurring revenue, i.e., GoPro needs to pivot to a subscription business. View the full answer. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in. VRIO stands for Value of the resource, Rareness of the resource, Imitation Risk, and Organizational Competence. He holds 19% of the shares outstanding but has 69% of voting rights (CCM). Travis Hoium owns shares of GoPro. This advantage will continue as long as Gopro will provide innovative capturing devices. *Average returns of all recommendations since inception. Therefore, its cost structure is a competitive disadvantage that needs to be worked on. That is, GoPro has an ecosystem of hardware products but has done little to connect them all together. This site requires JavaScript to run correctly. Academy of Management Executive, Vol. New customers from online channel Over the past few years the company has invested vast sum of money into the online platform. Job Details. View the full answer. This is explained by the fact that the pandemic seriously affected GoPro, since retail stores were closed and individuals could not go outside and use their GoPro. Article continues after advertisement This brand portfolio can be extremely useful if the organization wants to expand into new product categories. 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). The biggest challenge for GoPro is that it doesn't seem to have much of an advantage in technology. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain. Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations. 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. 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