The company has adopted a combination of cost leadership, differentiation and focus strategies to handle the competitive pressure. GoPro has $326M in cash with debt of $280M, some of which stems from leases, however, most of the debt comes from convertibles (CCRM). [Online], Available at: https://biclabs.com/insights/change-of-competitive-advantages/foreseeing-change-polaroid-gopro/, [Accessed on: 16th January, 2018]. M. E. Porter, Competitive Strategy(New York: Free Press, 1980), A. D. Chandler, Strategy and Structure (Cambridge, Mass. 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 (, ). If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template. This material may not be published, broadcast, rewritten, or redistributed. So, what is the company's competitive advantage, and how will it leverage that in the future? Published: 27 August 2019. While their brand may be a household name, GoPro is struggling: ever since its 2014 IPO, the company has seen very-little to zero growth. The characteristics of resources that can lead to sustained competitive advantage as per the resource based theory of the firm are 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. Until phones and laptops adopt the latest resolution (which always takes a considerable amount of time), the average consumer will not feel the need to upgrade to the latest GoPro camera. As the world of logo design continues to evolve, it brings unexpected changes with it. It sounds opaque, but GoPro's biggest asset is really its brand. From a certain point of view, it looks like a high-growth business. The GoPro universe is also vast: GoPro has over 10M subscribers on Youtube, nearly 18M followers on Instagram and 10M likes on Facebook, putting it at a total of over 38M followers across social media. However, that industry it not very large. GoPro, Inc. managers can use Porter Five Forces to understand how the five competitive forces influence profitability and develop a strategy for enhancing GoPro, Inc. competitive advantage and long term profitability in Photographic Equipment & Supplies industry. GoPro likewise observed the chance to secure clients by building individual associations with its objective market. 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. 2023 FOX News Network, LLC. Organizational Competence to exploit the maximum out of those resources. This investment has opened new sales channel for GoPro, Inc.. Cost basis and return based on previous market day close. Since its 2014 peak of $86.97, the stock has dropped by 87.6% to $10.83 as of publication. The biggest challenge for GoPro is that it doesn't seem to have much of an advantage in technology. I am not a financial advisor and do not have $GPRO stock. The biggest challenge for GoPro is that it doesn't seem to have much of an advantage in technology. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*. GoPro's stock price dropped as a result of a loss of confidence by both consumers and investors. 49-61. The marketing of the products left a lot to be desired. Words: 2326. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain. And in 360 and virtual reality cameras, the company is up against well-funded competitors like Samsung that don't want to miss out on the market. What does the PESTEL analysis reveal about the action camera industry in 2020? Because GoPro was the first company to specialize in small action cameras it had a competitive advantage from the start. The SWOT analysis of GoPro, Inc. just underlines this fact. 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. Answer: 1. Competitive advantage refers to the ways that a company can produce goods or deliver services better than its competitors. Do they led to a sustainable competitive advantage (VRIO analysis)? ). As it stands, GoPro does not have many competitive advantages. 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. Often the exploitation level is highly dependent upon execution team and execution strategy of the firm. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. SWOT analysis is a vital strategic planning tool that can be used by GoPro, Inc. managers to do a situational analysis of the firm . And in 360 and virtual reality cameras, the company is up against well-funded competitors like Samsung that don't want to miss out on the market. GoPro took advantage of its competitors by breaking the ground, an exclusive line of the capture device. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present. Invest better with The Motley Fool. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. Send your data or let us do the research. 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. By leveraging user-generated content (UGC), GoPro has been able to solicit and repurpose content showing real people using its products. 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. The Motley Fool has the following options: short January 2019 $12 calls on GoPro and long January 2019 $12 puts on GoPro. Nonetheless, GoPro enjoys and maintains tremendous brand recognition within the market. Beyond hardware, GoPro only offers some software products such as its video-editing software Quik. 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. Posted: April 14, 2023. This should open a window of opportunity for GoPro, Inc. in other product categories. Need more investment in new technologies. 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). 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. 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. Making the world smarter, happier, and richer. GoPro has the exact opposite problem that Netflix and Disney have: it has the hardware but does not have the software. When the customer consider activity sports, regardless of whether on TV or in particular life, brands like GoPro appear to dependably be around the activity. Between its cash position and its $89 million in free cash flow during 2020, GoPro easily covered its $20 million interest expense. To this day (for better or worse) GoPro remains largely focused around their hardware. 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. Legal Statement. GoPro manufactures action cameras, mobile apps, and video editing software. Compex is the nation's leading record retrieval provider. 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. Again, the size of the video-editing software market is difficult to estimate, and GoPro is a tiny-player in the market. 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). This is one of the. Highly skilled workforce through successful training and learning programs. 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. GoPro currently faces a 9.67% short percentage of shares outstanding as of March 31st, 2021 (, Let's dive into the numbers (if you aren't a big numbers person, I suggest you skip to the "Why GoPro Has Struggled to Grow" section). Travis Hoium owns shares of GoPro. To GoPro's credit, the company has already been focusing on shifting to a D2C business model. This method is called Weighted SWOT analysis. Customer service Our list of competitive advantage examples continues with customer support & service. To this day (for better or worse) GoPro remains largely focused around their hardware. Imitation and Substitution Risks associated with the resources. Despite the competition, GoPro has maintained strong market share. Job Details. The company introduced innovative action cameras and became a successful brand with the help of content marketing. About us. The nature of GoPro's competitive advantage GoPro manufactures action cameras, mobile apps, and video editing software. 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. And given competitors like Garmin (NASDAQ: GRMN) and Eastman Kodakentering the digital action-camera market, the concern is justified. GoPro: The Disruptive Innovator Faces Challenges case study is a Harvard Business School (HBR) case study written by Rishi Dwesar, Geeta Singh. GoPro Inc owns a number of intellectual property rights that include trademarks and patents. Downloads: 130. Yes, it is valuable in the industry given the various segmentations & consumer preferences. Powered and implemented byFactSet Digital Solutions. Despite the competition, GoPro has maintained strong market share. Can provide sustainable competitive advantage. Does its approach to delivering customer value contribute to a sustainable competitive advantage? The CEO of the organization has chosen to obtain particular workers that have the capacity to look into changed techniques and methodologies to improve the GoPro, speedier, and all the more effective, so that it will be able to capture more market share or at least maintain its market positions as compare to rivals. This type of speculation tends to make a stock unpredictable instead of investable. Potential is certainly there. GoPro likewise observed the chance to secure clients by building individual associations with its objective market. 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. 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. Combined, all these organisations have employed approximately 689,000 people. The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the GoPro, Inc. to develop four types of strategies: The central purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect GoPro, Inc. strengths, and eradicate its weaknesses. 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). Admittedly, the projected growth in the action camera market bodes well for GoPro stock. It also released its quadcopter drone, KARMA in 2016 (GoPro, 2018). He holds 19% of the shares outstanding but has 69% of voting rights (, ). As shares of GoPro Inc (GPRO 1.29%) have sunk since its IPO, investors have been concerned about the company's product strategy and ultimately what the company's competitive advantage is. 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