Gopro notities case PDF

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LECTURE: GOPRO — action camera- first mover: it was the first mover in the action camera, GORPO — high end segment: gopro is situated in the higher end segment although even having some cheaper products in de middle segment. — brand reputation and loyalty (key resource): very important key resources In competition. — large community-content & entertainment (key resource) — threat of competition is very important  on the other hand: more competition = more general acceptance by a broader group of user and this is good news, this is also why investors believe the market is still growing — threat of smartphone substitute  interview with CEO nick woodman (CNBC, Aug 4, 2017) he sees  the smartphone as a huge opportunity thanks to the smartphone market  powerful extension of the smartphone: untethered lens for the smartphone, seamlessly connecting with the smartphone  the Gopro is an extension of the smartphone Annual report 2015: we intend to continue building our existing capture device business while also launching complementary new device categories including drones and devices categories to enable virtual reality content capturing. In addition we expect to release new content management, editing and sharing solutions that will provide increased value to our consumers, introduce new revenue streams and further differentiate us from competitors. TO CONTINUE BUIL DING ITS ALREADY EXISTING CAPTURE DEVICE — growth of the professional demand for action cameras in TV production (e.g. to record closer details of sport)  first of all was the growth of the professional segment of the action camera, for instance — geographical market expansion (Asia Pacific): market expansion to other regions in the world mainly towards consumers — distribution strategy : very important element to continue building to existing business.  direct sales: large and small retailers, gopro is selling directly to the retailers  independent speciality retailers: they mainly sell high end products and their customers are believed to be early adopters of new technology. Always very interesting for companies like GOPRO  big-box retailers: such as amazon, Walmart, target, best buy  mid-market retailers: are large regional or national presence, large regional/ national players in the US  Other specific retailers: hunting, fishing, motor sports POP-marketing: point of purchase marketing, it’s a very effective way of building consumer awareness and influence the purchase decision. This term is explained in the case  indirect sales: wholesalers and importers who resell to retailers  is used for international market expansion  conversion of distributor sales into direct sales: and some of the importers/ wholesalers are converted in direct sales. Gopro is doing efforts to reach foreign retailers/ retail groups directly, without any intermediary party in-between (wholesaler/importer). The only condition to have the direct link with GOPRO is that you are an important retail chain with large volumes.  sales support: is for both direct and indirect sales, the sales staff of GOPRO advices for:  product mix, in-store merchandising, development of marketing materials, order assistance, product training, they offer product training,..  celebrities who use GOPro to create and share content.  Celebrities are very important just as they are in the business game. They created content from GOPRO with the fans

COMPLEMENTARY NEW DEVICE CATEGORIES — Karma drone offers more value for the current customer base: it is not the ambition of GOPRO to be the market leader, they will never be and they have never been the market leader. But at least they will offer more value for their existing customers, besides the fact that they will earn and gain new customers. — Augmented brand awareness and loyalty: by offering those new device categories, this is the same for VR NE W CON TENT MANAGEMENT, EDITING AND SHARING SOLUTION — Content & lifestyle marketing: the marketing strategy is content and lifestyle oriented — User-generated content and GoPro originally produced content: content is very important today both usergenerated and GOPRO content management platform today.  Integrated into advertising campaigns: both groups of content are integrated into advertising campaigns. And we also have the  Billboards, print, television commercials, online, trade show — Content management platform NE W REVENUE STREAMS — New revenue streams?  It is still unclear what kind of revenue streams they mean, of course you have the new revenue streams of drones, but this is something else. — Complementarity and lock-in value driver  They built a huge platform with a huge number of community users.  So the complementarity and lock in value drivers are more important.  The drones are complementary to action cameras and  the content management is complementary to both the action cameras and the drones.  Building complementarity value drivers will finally lead to more lock in value drivers THEY WOULD LIKE TO DIFFERENTIATE FURTHER I don’t believe they can further differentiate from the intense competition. It is more like a stability strategy. — Stability strategy  Stable market share in a still growing market  because if you can keep your stable market share you can still grow, GOPRO can build on its key resources to do this.  Build on key resources (brand reputation, community)  Build complementarities  Lock-in: and finally build lock-ins  Focus on operational excellence (shareholder value) : they explained in the text that cost per unit have risen both for shareholder value reasons. So they really have to focus on operational excellence, so the cost per unit has to drop, just as it has in the business game. There can’t be any other competitive advantage. — No significant technological advantage: or they could catch up with the technology advantage of another player, of their own technologic advantage, but making a big difference through differentiation is probably not going to happen. — Strategic alliance? Last possible option is to have more strategic alliances, or GoPro could be taken over by another company because of the low stock price. This is of course a possibility but not a necessity.

TRYING TO SOLVE THE CASE BY MY OWN Question 1 A. Compare the drone and acting camera industry: what are the threats, how do they compete, …? Drone industry

Camera industry

Threats

— Increasing intensity of competition among industry rivals—may squeeze profit margins: competitors like DJI using scale economies to reduce prices while still offering a superior product is a threat to other competitors who offer at a higher price. — Loss of sales to substitute products: again competitors like DJI having a lower price will cause loss of sales for other companies.

— Rising use of smartphone instead of camera to film. — Market growth is slowing down: ‘although the action camera market was expected to enjoy continued sales growth several factors were expected to slow down the rate” — Loss of sales to substitute products: “the saturated action camera market”, there are too much substitutes, the market is saturated.

competitio n

Through focusing on different product specifications: 4K camera, price, GPS ,

Through focusing on different product specifications of the camera: price, best audio quality, temperature resistant , waterproof, 360 degree filming, GPS-tracking,…

B.

Which of both markets is most interesting at the moment? Explain why. Drones, the market is less saturated than the camera industry as in less competition which means there is more potential to grow. Drones can even replace the action camera as there are now ways to use your drone to film yourself, using your smartphone to control it.

Question 2

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A. Delineate the biggest competitors of GoPro and identify how they can pose a threat. Propose in each case a strategic action as precautionary measure. Tomtom: better in build GPS activeON: smaller and cheaper 360 fly: better video quality, can be used with an app Garmin international: waterproof and can be used without an additional accessory Sony: high quality, better resolution with low-light Kodak: can be dropped from 6 feet , automobile dash camera’s Nikon: resistant to heavy conditions. Polaroid: top rated, is suing GOPRO for patent infringement.

Question 3 A. Describe GoPro’s marketing strategy and identify its strengths and weaknesses. — Focus: to develop product solutions that enabled consumers to capture, manage, share and enjoy some of the most important moment in their life. — Diversification and differentiation strategy: Their main business is action cameras. They are also diversified into related business, including software and drones. — Strengths:  First mover advantage: GOPRO was the first to commercialize the action camera.  Using social media and social media influencers: this was the core of GoPro’s consumer marketing. The company’s customers captured and shared personal Gopro content on social media = free advertising.  innovative: they aim to launch new complementary devices for their existing products.

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Large distribution network and many direct sale points: Mid-market retailers, Retailers focusing on sporting goods, Amazon, Best Buy, online store: gopro.com. Gopro sold to over 50 distributors. — Weaknesses: 

No well-developed or proven core competencies: ‘too’ diversified, they don’t focus enough on their core and it is unclear what their core business exactly is they have action cameras but also drones, accessories and they wanted to go in software as well, VR..

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No clear strategic direction: when announcing to introduce a product and then not introducing it at all seems like a sign towards insufficient planning and thinking ahead of their strategy.

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A product/service with ho-hum attributes: they have several attributes on their camera but nothing that pops-out as in being the main feature of their action cameras. the competitors on the other hand have a main product attribute such as : low price, resistant to be used under extreme conditions, great video quality, nightime vision.

B. Proprose two amendments to ameliorate GoPro’s marketing strategy. — Focus on core business: cutting expenses by leaving the non-core or maybe even selling it, such as developing software or maybe leaving the action camera (when it is not profitable anymore) and focus on VR and Drones. — develop an important product feature: the reputation of Gopro is good it is a well-known brand, but maybe for the long-term they need to make sure their product pops-out because of 1 feature that is really good in their camera’s such as state-of-the-art video quality,… — strategic alliances: form a strategic alliance with one of the top competitors....