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BUSINESS CASE

GoPro's Revenue Dives 40% In Another Awful Quarter – FORBES

From GoPro to oh no! Investors reeling from stock price plunge – The Guardian

GoPro crashes to new record low as trading resumes – Financial Times

Executive Summary

Executive Summary

2002: IDEA: Wouldnt it be great if a single consumer can have a high quality camera during surfing?

2004: First GoPro camera

2005: Sales $150k

2006: First digital camera; Sales $800k

2007: Sales $3.4m

2007- 2012: Golden era of GoPro; more cameras introduced, high run up, external investments --> company value: $2.25b

2013: Lets go public

2013 - 2017

2013-2018

IPO: End of golden era

Financials

- 2013:

IPO GOES OUT $24 --> Company is worth $3B

  • Now: annual reports, serve the shareholders that own the stock

- October 2014:

Peak of $98 a share --> VALUE: $10B

- 2014 - 2016:

OPEX increase

  • two Superbowl advertisments

--> Growth -27%

- July 2015:

Change to Media company

  • hire media executives from HULU , HBO Sports

- January 2018:

$6 a share VALUE: $840M

ISSUES

1. Public company --> not private anymore

2. Acquisition problems

3. Supply problems --> delays

4. Competitors 360 camera

5. Product side:iphone android

6. Strategic shift/focus: change to media company middle of product issue and IPO

--> core competencies of GoPro: professional quality images through a great little camera

ISSUES IN THE CASE

Analysis

Analysis

  • Internal analysis

a.) Marketing Mix

External Analysis

Porter's 5 Forces

Threat of new entrants:

Lower prices

Higher customer satisfaction

Better durability of products

Bargaining buyer power:

Buyers of GoPro aren’t a large group, thus would be able to demand lower prices as seen by the reduction from $10 to roughly $8

Threat of substitution:

The market is highly saturated with many cheap Chinese companies

Could result in a pricing war from competitors

GoPros USP?

Supplier power:

there are many suppliers in the camera / drone market therefore they have less power

Competitive rivalry:

many competitors --> collaboration

External Analysis

PEST

Political

  • Laws/ bans on drones
  • International trade barriers

Economical

  • High prices won't work if there's a high supply from multiple competitors

Social

  • Advertise products
  • Target the correct market

Technological

  • Keep up with technological advancements

SWOT

Competitive Analysis

Competitive

Analysis

Product

variety

Quality

Options

Options

1. Reduce drone prices

2. Improve material

3. Merge with a drone company

4. Leave the drone market

Reduce drone prices

Solution 1

PROS:

  • products more attractive to the average buyer --> can widen their target market --> insurance of more sales --> higher revenue

CONS:

  • no longer appealing as a premium brand --> could hinder current customers

Improve material

Solution 2

PROS:

  • consumers are more likely to be impressed by the product --> willing to pay more as it would be more durable --> increase sales
  • by word of mouth --> customers recommend the product to other consumers

CONS:

  • investments in R&D --> currently no funds left to invest
  • no guarantee that sales increase --> waste of money and time; extensive advertisement required to promote the improved version of the drone

Merge with a drone company

Solution 3

PROS:

  • experience economies of scale as they already produce the camera --> flying aspect will be perfected by the drone company --> result in loyal customers from GoPro and other company --> larger consumer audience

CONS:

  • very hard to have a successful merger as brands often have different objectives and may clash on managerial methods
  • workers may feel insignificant in a larger company --> low work atmosphere --> inefficiency of employees --> damage brand --> increase costs, decrease sales

Leave the drone market

Solution 4

PROS:

  • focus on the camera and have effective marketing strategies to ensure GoPro reaches all potential consumers

CONS:

  • consumers are unpredictable and fashion choices are known to change very quickly --> GoPor failed before --> how are they going to keep up with the ever changing demands of the consumer ( if they just stick to one product?)

Recommendation

Recommendation

In conclusion, we believe that GoPro should leave the drone market because...

Timeline

Timeline

Improve current products/Supply chain

Reach economies of scale

Effective marketing

Investment in R&D

Resources Needed

Resources Needed

Money

Effective Management

Innovative Employees

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