GoPro: External/Internal Industry Analysis, Team D.
Background: After Nick Woodman graduated college he decided to try to open his own business and it was called
funBug. His venture was not successful… Instead of trying to get a job or open another business he decided to travel
around the world to surf. While he was travelling in Australia and Indonesia he used a 35mm camera attached to the palm
of his hand with a rubber band to try to capture his own surfing activities. This trip became his inspiration to create GoPro,
one of the leading companies in the wearable action camera industry. An action camera is basically an HD personal
camera that is compact enough to be worn anywhere on the body and is built to be used in extreme action photography or
video. These cameras are right now most popular with people that practice water sports, ski, snowboard, motorcycling
and other, usually extreme sports. The market for these cameras is still in its nascent stage and is gaining a lot of
popularity through media, advertising and social networks. A lot of new players are being attracted to this
industry which will likely have an impact on price, features and quality of action cameras.
External Analysis, The Five Forces:
Rivals - Several rivals have entered the wearable action camera market, which has increased the intensity of the space;
however, the quality and performance of the GoPro product allows them to maintain an edge over the competition. As
competitor products approach the quality of GoPro this rivalry will intensify. The primary direct competitors include Sony,
JVC, and Garmin.1 These products are designed in a similar nature to GoPro - able to be mounted to a surface to capture
footage from a multitude of perspectives. The rivalry will continue to increase as new players have entered the market
focusing on a subset of the space. The ‘wearable cameras’ have become increasingly popular, and increased the number
of competitors in the space. One example, called Pivothead, allows for the camera to be worn by the user in the form of
sunglasses (argued to be more convenient, but also limits the point of view that can be captured).2 Pivothead has also
increased the competition for the content sharing aspect of this market. They have taken GoPro’s model of video sharing
a step further by creating mobile applications (and hardware accessories) that enable the user to rapidly sync the video
content with his/her mobile device and share recorded content.
New entrants - Because GoPro has many incumbent advantages being first to market such as brand identity, distribution
network, and a lot of patent protection, the threat of new entrants is fairly low. However this threat can quickly evolve
stronger, especially coming from consumer electronic giants. Companies with strong expertise in consumer electronics
(and large R&D budgets) have the resources available to quickly enter this space (as demonstrated by Sony, Panasonic,
JVC and Garmin).3 Additionally, smaller players are using Kickstarter (which is a popular crowdfunding source) as a
means of obtaining the capital required to fund new companies that have breakthrough competitive potential (ex: 360
Camera by Giroptic).4 Tools such as Kickstarter have enabled new entrants to overcome the financial obstacle that would
otherwise protect GoPro from the threat of new entrants. Another example that is currently more of an ally of GoPro is the
AirDog by Helico Aerospace Industries. The AirDog is a flying drone designed to carry a GoPro camera and film the
user from an aerial perspective.5 This unique idea has the potential to evolve into a more integrated flying camera, leading
to future competition with GoPro.
Buyers - The market for capture devices, which include cameras and camcorders, is highly competitive.11 Camera
manufacturers, diversified electronics companies, and specialty companies all compete for market share. In this market
buyers are price sensitive as there is low differentiation among devices and a lack of diversity of choice. All these factors
contribute to strengthen the buyers’ power over the industry and reduce profits. However if one were to investigate the
wearable action camera segment, there are much less worthy competitors and the power of the buyer is greatly
diminished. Competitors in this segment reduce the power of the buyer by creating a high quality product that is easily
mounted and can withstand harsh environments and show “point of view” image of practically any adventure which in turn
increase their profits. Currently GoPro is the leading brand in a nascent industry, allowing them to charge top dollar for
their action cameras. However, the industry is experiencing rapid growth, attracting a lot of new companies with
Suppliers - The electronics contained in capture devices are becoming increasingly complex. There is a high reliance on
third party suppliers, and in some instances, some third party suppliers serve as the sole source.11 Due to the limited
amount of suppliers that offer capable electronics that are rare and exclusive, the power of suppliers is high. This tends to
reduce industry profitability as companies are subject to supplier’s high prices. For example, GoPro has sole source
suppliers among its third party suppliers. The following excerpt is from the company’s recently released S-1: “In particular,
we incorporate video compression and image processing semiconductors from one provider, Ambarella, Inc., into all of
our cameras, and we do not have an alternative supplier for these key components.” Profits could also be hindered if
competitors in this market do not possess manufacturing capabilities.
Threat of substitutes - One of the threats to the recording device industry is the substitution of smartphones, which can
perform similar functions and are widely owned with some estimates putting smartphone ownership at 22% of the global
population.7 The value of a smartphone in the form of convenience and availability could work to reduce buyer’s cost of
switching as smartphone video quality and durability improve, this in turn will increase the force level from low to high. The
availability of peer to peer lending and crowdfunding could also create strong substitution products. As in the example
discovered on the popular crowd funding site Kickstarter, an idea was spawned in Smart Dive Buddy that leverages the
fact of wide availability of smartphones and their capability to capture video to create an accessory that transforms
smartphones into underwater dive cameras.
Moving forward the POV segment will command more market share from the overall capture device market. This segment
will eventually attract more entrants increasing the risk in regards to the five forces that shape competitive strategy.
The table below (see Exhibit “A”) highlights the ranking of importance for the five forces (1-most important to 5-least
important). The most important force to overcome in developing strategy is the threat of new entrants. Companies will
need to make an effort to develop strategies to combat the incumbent rivals. Companies could then deal with reducing the
power of the buyers and limiting the threat of substitutes. The power of suppliers will diminish as this market segment
Internal Analysis, Resources/Capabilities:
Marketing / Brand Identity - With the advent of the internet comes new ways to reach customers. GoPro has established
itself as one of the best at taking advantage of this medium by using a unique and powerful technique. Where many
companies are trying to produce that perfect “viral” video that reaches millions of viewers, GoPro “is releasing multiple
videos every day after stumbling on a technique that leads to thousands of hours of free publicity a week”.8 From the
company’s S-1 filing they describe a YouTube marketing strategy as the Virtuous Cycle: “a self-reinforcing consumer
acquisition model that fuels our growth”.9 By placing the onus of content generation into the hands of its customers, they
have effectively created a self-sustaining model for organic growth in brand awareness that fuels demand for their
products. It started with an extensive campaign using highly popular extreme athletes. GoPro has now signed about 100
athletes including two-time Olympic Gold medalist snowboarder Shaun White, professional surfer Alana Blanchard, and
Extreme Mountain Biker Kelly McGarry.10 GoPro created their YouTube account 4 years ago and suddenly, by including
fans in content generation, they have a massive presence across all social networking sites. “Currently about 6,000
videos a day are posted on YouTube with the word GoPro in its title or description” an increase of 60% year over year.
They now release up to 4 videos submitted from the public a day (sometimes re-edited and/or reshot) and have created
an entire team of 30 members whose focus is to scourge the internet daily for user generated content on GoPro cameras.
The company now has more than 7.2 million “likes” on Facebook, more than 2 million Instagram followers, and more than
1.8 million subscribers on YouTube, where the company is ranked as the No. 1 consumer brand. There is also a bonus
program for YouTube videos licensed by GoPro for $1,000 if the video reaches 1 million views. Nearly 100 of GoPro’s
videos have already exceeded 1 million views.
Content generation - GoPro’s capabilities in content management are still very much in their infancy, however their
vision includes “alleviating pain points associated with capturing, managing, sharing and enjoying engaging content”.
Development of their desktop application, GoPro Studio, and their mobile application GoPro App represent their early
foray into the strategy of content management. In addition, in October 2013, the company acquired General Things Inc., a
web development firm, for their software competencies with the intent to accelerate development of these tools.11 They
intend to further develop GoPro into a media company with content management a key pillar of this strategy.
Technology - GoPro has differentiated themselves by having the highest quality video in the most durable body at an
accessible price point that blurs the line between amateur and professional video equipment. Their small and lightweight
footprint, combined with superior durability allow the camera to be used where traditional cameras and mobile devices
can’t. GoPro has “42 issued patents and 68 patent applications pending in the United States and 15 corresponding
issued patents and 12 patent applications pending in foreign jurisdictions” protecting their technology . Unique accessories
also open up a new channel for content generation. Because of the low price point, customers are able to purchase
multiple units to gain different perspectives of the event they are trying to capture. The inherent risk with their technology
is that it is susceptible to imitation, and many new entrants are already trying to duplicate their success. To deepen their
strategic position, GoPro will need to leverage their equipment and brand presence to move into content management to
Distribution - GoPro has developed many exclusive relationships with specialty retailers (Surf, ski, and motorsports
stores) which established their products as the premier camera in the industry. Being sold in these extreme sport stores
immediately portrays an image of durability by association. With these early relationships, they have developed a brand
identity and sales channel to the extreme sports enthusiast (estimated at 25,000 stores globally) that is difficult to
Company culture - The company prides itself on hiring people that share the same vision as their founder Nick
Woodman. He built the company as a sports enthusiast who wanted an easy and superior way to share his passions
through video. It is with this mindset that they tap into their own employees’ experience, and pain points, when attempting
their own self capture pursuits, no matter what they might be. They feel this culture and experience of its workforce gives
them a powerful competitive advantage.
Positioning - GoPro is positioned as a wearable action camera. They have aligned their product positioning with
professional athletes, sports enthusiasts, and anyone that wants to capture themselves performing a physical challenge
that they can in turn show to the world. This positioning has enabled GoPro to rapidly become the leader in their space
with the athletic consumer. However, there is a subset of the wearable action camera market that may feel isolated from
GoPro’s positioning and, in turn, select a product with less ‘sport’ promotion. This choice to align with athletics was an
active positioning decision made by GoPro, which can result in a trade-off of alienating the ‘non-athlete’ consumer.
As part of the further development of their brand identity, GoPro sold a 9% stake in their company to Foxconn.12 The funds
from this business decision were used to expand their marketing campaign and position themselves as the top action
camera. This action was at the expense of expanding upon research and development of the product line, a trade-off
often faced by technology companies.
Internal Analysis Summary, How activities fit together (or not fit together)
The most prominent type of fit leveraged by GoPro is second order fit: reinforcing. All of its marketing, promotion,
partnerships, research and development efforts reinforce one another to promote a lifestyle. With marketing efforts which
incorporate content created by users, content which highlights global issues (such as their video of polar bears which are
seeking icebergs from which to hunt, demonstrating the impact of global warming), all promoted through an integrated
social media platform, GoPro reinforces their product as a tool for consumers to achieve a lifestyle that is more extreme,
relevant, youthful, and responsible for global issues. Established partnerships also reinforce the lifestyle GoPro promotes.
Early established partnerships with stores and brands which sell extreme sports equipment reinforce GoPro as the
leading and preferred camera equipment for the culture of extreme sports. Research and development partnerships with
the AirDog by Helico Aerospace Industries reinforces GoPro as a next generation technology for people seeking a
futuristic and extreme lifestyle. See Exhibit “B” for GoPro’s VRIO table.
How capabilitiesinteract with 5 forces
With the threat of new entrants presenting the greatest potential to negatively impact GoPro’s market share, GoPro’s
strategy of promoting a lifestyle, rather than just a electronic good, will contribute to GoPro’s sustainability as a premium
product with dominant market share. Concurrently, GoPro will need to continue investments in research and development
and partnerships which will allow GoPro to maintain its position as a leader in next generation technology. Partnerships
will also play an important role in retaining potential substitute products as complementary allies, rather than competitors.
Internal development of complementary technologies which fit with their market positioning, such as a movement towards
becoming a more comprehensive media company with content management and sharing competencies, will also allow
GoPro to maintain its dominant position, mitigating impact of competitors on market share.
GoPro has successfully carved a new niche in an otherwise mature and competitive industry. As the established leader in
versatile camera equipment for extreme sports, GoPro has established its unique position. Moving forward, GoPro is
faced with strategic challenges which will be brought by new market entrants, incumbent competitors, and substitute
products which may offer new disruptive technologies. The electronic device industry is rapidly evolving, and sensitive to
consumer trends. To maintain its position, GoPro will have to deepen their strategic position through content generation
and management and continuously develop their technology to meet the needs of tomorrow’s generation today. How they
figure out new revenue streams by morphing into a media company will be an interesting case study of the future.
Current Level of
Potential Future level
Threat of New
Low Very High 1
Incumbent Rivals Moderate High 2
Power of Buyers Low High 3
Threat of Substitutes Low High 4
Power of Suppliers High Low 5
Capability/Resource Valuable Rare
Superior Marketing Strategy “The Virtuous
X X X X
Content Management Suite X X
Technology X X X
Distribution Network X X X x
Company Culture X X X X
1 Best Action Camera This Spring http://gizmodo.com/the-best-action-camera-spring-2014-edition-1547049331
2 Pivothead http://www.pivothead.com/#stay-in-it
3 Game Over for Contour as Action Camera Market Gets Too Hot http://www.imaging-
4 Kickstarter Project - 360 Camera https://www.kickstarter.com/projects/giroptic/the-worlds-first-full-hd-360-camera
5 Kickstarter Project - AirDog https://www.kickstarter.com/projects/airdog/airdog-worlds-first-auto-follow-action-
6 Kickstarter Project - Smart Drive Buddy https://www.kickstarter.com/projects/1607113047/smart-dive-buddy-
7 Business Insider article http://www.businessinsider.com/smartphone-and-tablet-penetration-2013-10
8 “GoPro's viral video marketing campaign turns it into top YouTube brand in the world” New York Daily News. Jul 22,
2014. Web. 23 July 2014 http://www.nydailynews.com/news/national/gopro-marketing-turns-top-youtube-brand-article-
9 Form S-1 Registration Statement United States Securities and Exchange Commission May 19, 2014.
10 “What’s next for GoPro? Content.” Fortune May 20, 2014. Web. 23 July 2014.
11 Form S-1 Registration Statement United States Securities and Exchange Commission May 19, 2014
12 Businessweek “Three Lessons in the Wipeout of Contour Camera” Web. 23 Aug 2013.