GoPro's Business Model & Competitive Strategy: Delivering Sustainable Advantage? - Essay Sample

What is your assessment of GoPro's business model and competitive strategy? Does its approach to delivering customer value contribute to a sustainable competitive advantage?

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GoPro's was earlier known as woodman labs. It transformed its name to GoPro's in February 2014. It has its headquarters in California. GoPro's software and hardware solutions link customer points with capturing and relishing attractive content. GoPro also provides a videos editing tool known as GoPro's studio.

The competitors of the GoPro's are Samsung and contour adventure. GoPro delivering customer value as it is one of the leading brands in the action cameras, and it offers a camera with high technology. The market size of GoPro's action camera is increased from 31 billion to 51 billion. The customers are interested in the innovation and uniqueness of devices, and the competitors of GoPro's are not performing as strong as GoPro's; that's why the level of competitiveness is low between them. The specific strategy of Gopro is to deliver the worth of the product and different from opponents. It is the key to success.

GoPro took advantage of its competitors by breaking the ground, an exclusive line of the capture device. This advantage will continue as long as Gopro will provide innovative capturing devices.

What are the strategically relevant factors in GoPro's macro-environment? What does the PEST analysis reveal about the action camera in 2017? Does the external environment of the drone industry present attractive opportunities to GoPro?

The macro-environment has a lot of impact on GoPro's activities. Factors that are considered in the macro-environment include those of PEST analysis which provides for the political, economic, social as well as technological factors in the environment which has a direct impact on the affairs of the company. PEST analysis shows that the action camera in 2017 had again as the elements worked in its favor. Political, economic, social, and technological factors have both been seen as critical factors that impact son the way that the company operates, as well as which measures it should undertake so that it can reduce the risk that may occur. In the present, there are a lot of opportunities that have been presented by the external environment in the drone industry. This is due to the fact that time is moving fast, and people are ordering more drones as technology is rapidly improving daily. Therefore, raGoPro is at a level that it can benefit a lot due to the advancements in technology that are happening band people are more likely to order more drones as time goes on.

What are the chief elements of GoPro's strategy? How good is the strategy?

GoPro's strategy starts with and hinges on the development of new capture devices, with specific innovations in mind for technologies such as sensor and digital signal processing and custom lens, audio, battery, and accessory design. Put, GoPro relies on providing small, versatile, and powerful cameras that can capture video in high definition. However, GoPro not only designs superb versatile cameras that allow people to capture special moments in high resolution, but the company also provides a platform for users that enables quick and easy content management, editing, and sharing capabilities.

The second component of GoPro's strategy is developing and simplifying its content management, editing, and sharing solutions for users through GoPro studio and the GoPro app. GoPro acquired General Things, a web and software development firm, in October 2013, bringing new insights into the software to assist these developments.

The third and most recent strategic development is the creation of GoPro Network, a media platform to share both original content and the best content uploaded and shared by GoPro users. In early 2014, GoPro agreed with Microsoft to develop and launch the GoPro Channel on Xbox Live, and it also became a platform partner with Virgin American.

GoPro priced its initial public offering at $24 per share in June 2014. It surged above $90 later that year. This is proof of how good a strategy it is.

What is your assessment of GoPro's financial performance for the past three years? Defend your conclusions.

For the past three years, the financial performance of GoPro has been at high risk. This is because when the debt to equity ratio is compared, it has been at an n upward trend, which means that the risk at the organization is increasing as days go by. However, when the current ratios are compared, hope is regained for GoPro Company. This is because the current ratio is growing daily, and when the current ratio is high, the liquidity position of the organization is strong. Therefore, it can be noted that GoPro has a stronger liquidity position in the market.

What is your assessment of the strength of competitive pressures stemming from industry rivals?

The strength of competitive pressures stemming from industry rivals is high.

The number of competitors in the industry in which GoPro operates is very few, but most of these are also large, they all have a significant market share. This means that these will engage in competitive action to gain position and become market leaders. It makes industry rivals a stronger force within the industry.

The fixed cost is high within the industry, this makes the companies push to full capacity, and it means these companies to reduce their prices when demand slackens.

The production of products within the industry requires an increase in capacity by large increments. This makes the industry prone to disruptions in the supply-demand balance, often leading to overproduction. Overproduction means that companies have to cut down prices to ensure that their products sell.

The exit barriers within the industry are particularly high due to the high investment required in capital and assets to operate. Exit barriers are also high due to government regulations and restrictions. This makes firms within the industry reluctant to leave the business, and these continue to produce even at low profits.

In GoPro's situation, GoPro needs to focus on differentiating its products so that the actions of competitors will have less effect on its customers that seek its unique products; focus on new customers rather than winning the ones from existing companies. It also can conduct market research to understand the supply-demand situation within the industry and prevent overproduction.

What is your assessment of the strength of competitive pressures stemming from the threat of entry of new competitors into the action camera industry?

The strength of competitive pressures stemming from the threat of entry of new competitors into the action camera industry is moderate to high.

The economies of scale if fairly difficult to achieve in the industry in which GoPro operates. The product differentiation is strong within the industry, where firms in the industry sell differentiated products rather a standardized products. Customers also look for differentiated products, a strong emphasis on advertising and customer services as well.

The capital requirements within the industry are high; capital expenditure is also high because of high research and development costs.

The government policies within the industry require strict licensing and legal requirements to be fulfilled before a company can start selling. All of these factors make the threat of new entrants a weaker force within this industry.

Some factors might make the threat of new entrants a strong force within this industry, for example, the access to distribution networks is easy for new entrants, which can easily set up their distribution channels and come into the business. With only a few retail outlets selling the product type, it is easy for any new entrant to get its product on the shelves.

In GoPro's situation, they can take advantage of economies of scale it has within the industry, fighting off new entrants through its cost advantage. They also can focus on innovation to differentiate its products from that of new entrants. It can spend on marketing to build strong brand identification. This will help it retain its customers rather than losing them to new entrants.

What is your assessment of the strength of competitive pressures stemming from substitutes for the action camera industry?

The strength of competitive pressures stemming from substitutes for the action camera industry is moderate. There has been an increasingly diversified line of products that are being released or about to be released soon that can suit particular needs better, such as wearable camera classes that can be used to block out the sun as well. Faced with new competition at a lower price, GoPro has to be conscious and ask the question if they are too "pro" for the average consumer. Moreover, companies in this industry also need to be wary of the increasingly technological advances in the camera phone industry. If phones can offer the same quality and value in their cameras, then extreme sports enthusiast's market segment customers might feel obliged to stick with their camera on their phone if they can provide similar mountable accessories since they take their phone everywhere anyways.

In GoPro's situation, they can focus on providing greater quality and differentiating in its products. This will ensure that buyers see their products as unique and do not shift easily to substitute products that do not provide these unique benefits. It can provide such unique benefits to its customers by better understanding their needs through market research, and providing what the customer wants.

What is your assessment of the strength of competitive pressures stemming from suppliers to the action camera industry?

The strength of competitive pressures stemming from suppliers to the action camera industry is medium to low.

The number of suppliers in this industry in which GoPro operates is a lot compared to the buyers; this means that the suppliers have less control over prices, and this makes the bargaining power of suppliers a weak force.

The products that these suppliers provide are fairly standardized, less differentiated, and have low switching costs. This makes it easier for buyers like GoPro to switch suppliers. This makes the bargaining power of suppliers a weaker force within the industry.

The industry in which GoPro operates is an important customer for its suppliers. This means that the industry's profits are closely tied to that of the suppliers. These suppliers, therefore, have to provide reasonable pricing. This makes the bargaining power of suppliers a weaker force within the industry.

The suppliers do not contend with other products within this industry. This means that there are no other substitutes for the product other than the ones that the suppliers provide. This makes the bargaining power of suppliers a stronger force within the industry.

In GoPro's situation, GoPro can purchase raw materials from its suppliers at a low cost. If the costs of products are not suitable for GoPro, it can switch its suppliers because switching costs are low. It also can have multiple suppliers within its supply chain. For example, GoPro can have different suppliers for different geographic locations. This way, it can ensure efficiency within its supply chain. Finally, as the industry is an important customer for its supplier, GoPro can benefit from developing a close relationship with its suppliers, where both of them benefit.

What is your assessment of the strength of competitive pressures stemming from the customers to the action camera...