GoPro manufactures action cameras, mobile apps, and video editing software. N, 2017. Other financials offered a mixed picture. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain. New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories . The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term. The SWOT analysis of GoPro, Inc. just underlines this fact. Tangible resources of Gopro Confidence include - physical entities, such as land, buildings, plant, equipment, inventory, and money. For one, going D2C would enable GoPro to control their inventory and reduce their average days holding inventory. Do they led to a sustainable competitive advantage (VRIO analysis)? Published by HBR Publications. While that is a massive increase from the 0.3 price-to-sales (P/S) ratio it sported one year ago, it compares well to Garmin's 5.8 sales multiple and to the S&P 500 P/S ratio of about 2.9. This comes as a result of GoPro's shift away from traditional retailers and the D2C space (more on that later). Hardware isn't driving profitability or growth. By not having any direct 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. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. 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. GoPro, Inc. maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis. For GoPro to grow, it needs to push out software on the existing network of hardware. Taking inspiration from Apple, I think GoPro can build subscription service offering unlimited cloud storage, automatic backups, easy-upload to social media, the Quik video-editing tool and seamless integration into the top video-editing softwares. One of the ways GoPro has been engineering the shift to direct-to-consumer is by promoting their e-commerce site. The company's net cash position is of $46M, which is by no means a crazy cash position, but I would consider it to be a solid cash position given the GoPro's recent troubles. The Motley Fool has the following options: short January 2019 $12 calls on GoPro and long January 2019 $12 puts on GoPro. He holds 19% of the shares outstanding but has 69% of voting rights (CCM). 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. GoPro practically invented the active lifestyle camera and created the market for it. It sounds opaque, but GoPro's biggest asset is really its brand. ). As shares of GoPro Inc (NASDAQ: GPRO) have sunk since its IPO, investors have been concerned about the company's product strategy and ultimately what the company's competitive advantage is.. Beyond their traditional cameras however, the company also sells a 360 degree camera, the GoPro Max, as well as a digital subscription, a mobile app, camera accessories and apparel. BicLabs, 2018. With more cash in bank the company can invest in new technologies as well as in new products segments. The company's digital-camera competitors have trailing P/E ratios of 32.83 for. Despite the competition, GoPro has maintained strong market share. Valuable Is the resource valuable to Gopro Confidence. Organizational Competence to exploit the maximum out of those resources. 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. Still, the fact that it ran an operating loss of $37 million in 2020 means that it must burn cash to survive. The GoPro: The Disruptive Innovator Faces Challenges (referred as Gopro Confidence from here on) case study provides evaluation & decision scenario in field of Sales & Marketing. This suggests that the company may be over-valued compared to its digital-camera competitors. Unless you require a camera that can withstand shock, a cell-phone camera is a perfectly acceptable replacement for a GoPro. Ambarella is really the brains behind GoPro cameras and the app technology GoPro builds trails competitors'. What are the advantages and disadvantages of this camera? For real growth, GoPro needs to build an ecosystem. Likewise GoPro has been investigating new strategies for conveyance to make GoPro even more a commonly recognized name. *Average returns of all recommendations since inception. . Again, the size of the video-editing software market is difficult to estimate, and GoPro is a tiny-player in the market. And given competitors like Garmin (NASDAQ: GRMN) and Eastman Kodakentering the digital action-camera market, the concern is justified. 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. While that does not bring Apple directly into GoPro's action camera business, the Apple Watch's durability means Apple can compete with some of the portable data-collection functions found on GoPro's newest devices. As previously mentioned, GoPro has limited natural growth a customer is unlikely to buy a new GoPro for quite some time, limiting the average CLV. If they are not rare than both present competitors and new entrants will easily able to get access to them and enter the competitive landscape. 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. 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). Also, its financials do not point to any immediate dangers. As mentioned before, the editing software market is extremely crowded and saturated with a number of players. Powered and implemented byFactSet Digital Solutions. Check out- GoPro, Inc. PESTEL / PEST & Environment Analysis 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). Downloads: 130. Value of the Resources Imitation and Substitution Risks associated with the resources. Competitive advantages are conditions that allow a company or country to produce a good or service at a lower price or in a more desirable fashion for customers. For one, the nature of the product doesn't allow for much "natural" growth. We serve thousands of law firms and the largest insurance carriers to provide record retrieval, record summarization, IME interface, and . What Is GoPro Incs Competitive Advantage? Beyond hardware, GoPro only offers some software products such as its video-editing software Quik. How do you measure and communicate your competitive advantage in your social media ad messages? SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself. If investors did not believe GoPro had any possibility to grow, they'd have jumped ship. The Motley Fool has a disclosure policy . This provides an advantage over many smartphone cameras like the ones offered by Apple or Samsung. 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 company was the first to offer such a product and has dominated the niche market ever since. Need more investment in new technologies. GoPro also offers its very own subscription. . Since its 2014 peak of $86.97, the stock has dropped by 87.6% to $10.83 as of publication. ). In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics. Learn More. GoPro Inc owns a number of intellectual property rights that include trademarks and patents. From IP to marketing techniques, GoPro's niche expertise has enabled it to cement its position within the market and keep competitors at bay. This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically. Travis Hoium owns shares of GoPro. However, that industry it not very large. Does its approach to delivering customer value contribute to a sustainable competitive advantage? Strong distribution network Over the years GoPro, Inc. has built a reliable distribution network that can reach majority of its potential market. This article covers a past game! GoPro also offers its very own subscription. While this may be worrying for its growth potential, the few competitive advantages that the companies does have are strong and need to be maintained. Making the world smarter, happier, and richer. According to Rishi Dwesar, Geeta Singh of the case study following are the critical resources that are valuable to the firm - financial resources, human resources, marketing expertise, and operations management. 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. This comes as a result of GoPro's shift away from traditional retailers and the D2C space (more on that later). Since falling into penny-stock status one year ago, the maker of compact cameras for extreme adventurers has rallied more than 410% over the last 12 months. But they've been held back from a larger market share by brand awareness and loyalty, something investors can't overlook. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix. This investment has opened new sales channel for GoPro, Inc.. Beyond their traditional cameras however, the company also sells a 360 degree camera, the GoPro Max, as well as a digital subscription, a mobile app, camera accessories and apparel. Like GoPro, Garmin switched to the specialty market. As we watch marks break free of conventional rules, there are bound to be some missteps and masterpieces along the way. GoPro's bread and butter remains its active lifestyle cameras. The matrix is only a starting point for a discussion on how proposed strategies could be implemented. This increase in market share came despite improving offerings from competitors. You can email us to get an example document of Weighted SWOT analysis. What are GoPro's resources? ). GoPro is changing the ways athletes do sports, pilots fly planes, travelers discover, and entertainers attract. By going D2C, GoPro takes control of the distribution and can work to ensure that they sell nearly-all of the previous models prior to releasing a new one keeping margins steady. The VIRB line from Garmin arguably has equal features to the Hero 5 line from GoPro, and Kodak is doing some interesting work with 360 video that could compete with GoPro's advanced products. Compex Legal Services is looking to hire a full-time Production Specialist. Cost basis and return based on previous market day close. With this in mind, let us turn to valuation & earnings. Opening up of new markets because of government agreement the adoption of new technology standard and government free trade agreement has provided GoPro, Inc. an opportunity to enter a new emerging market. It sets an organization apart from its competitors and paves the way for higher profit margins, greater return on assets, and accumulating valuable resources. Moreover, thanks to the Apple Watch, Apple now builds a product that can function under unstable conditions. In addition to this, GoPro has also been made irrelevant by the incredible advancement in cell-phone camera technology. ). SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. 2023 FOX News Network, LLC. There is no significant factor for politic and economic in this sector, However for . It allows a company to achieve superior margins and generate value for the company and its shareholders. Between its cash position and its $89 million in free cash flow during 2020, GoPro easily covered its $20 million interest expense. That is, once a consumer has purchased a GoPro, there is very little incentive for them to upgrade to a newer model unless the customer is keen on having the latest resolution or slow-motion technology. However, that isn't to say that GoPro didn't try to expand beyond their traditional camera. 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