Reference no: EM132166913
As GoPro moved into 2015, it appeared to be the poster child for American entrepreneurial success, going from a humble beginning as a homemade camera tether and plastic case vendor in 2004, to an action camera vendor with $350,000 in sales in 2005 (its first full year of operation), to revenue of $1.6 billion in 2015. The company had gone public in June, 2014, and at its peak in October, 2014, GoPro stock traded at over $98.00. In 2014, GoPro was ranked #1 most popular brand on YouTube with more than 640 million views, and an average of 845 thousand views daily. In 2015, the average daily views were up to 1.01 million. Abruptly, in the third quarter of 2015, GoPro’s magic disappeared. Fourth quarter, 2015 revenue dropped by 31 percent from the prior year, and net income (loss) fell by 128 percent to a net loss of $34.5 million. By the end of December, 2015, the stock traded at less than $20.00. GoPro’s sales continued to slip in 2016. The newly introduced HERO4 camera performed poorly, and the company cut its price by half and reduced its product line to three cameras. The Karma camera drone, set for release in the first half of 2016, was inexplicably pushed back to winter, and there was no date for release of the HERO5 action camera. After the first quarter 2016 results were released, GoPro’s stock dropped below $9.00. According to Investor Place (28 March, 2016), GoPro had “essentially erased its once coveted title of Wall Street’s darling and is now loathed by Wall Street.”
What is your assessment of GoPro’s business model and competitive strategy? Does its approach to deliver customer value contribute to a sustainable competitive advantage?
One of the competitive strategies to consider is whether to be a “first-mover,” “first-follower,” or “slow-mover.” Which strategy do you believe Go-Pro has embraced? Is your chosen strategy the right course of action for Go-pro all of the time? Please explain