GoPro
Introduction
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GoPro is an American technology company
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It was founded in 2002 by Nick Woodman
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It produces cameras and mountable and wearable accessories. GoPro action camera have enjoyed
a rapid rise in popularity in the last few years. They are ideal for everything from filming extreme
sports to strapping to your dog’s head.
GoPro Social Media Influence
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GoPro uses the power of user generated content
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They ask consumers to submit shots and videos they have created with the tiny wearable cameras
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All these videos are shared online, show the product in action and make the users experience the
focus of brands social media content
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It is highly popular on Youtube
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It is also shown on a GoPro channel on Virgin American Airlines
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GoPro also ask users to submit their best photos, raw clips & video edits by offering GoPro
awards to the favourite in each category.
Revenue model of GoPro
Chart
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Last year the company recorded revenue of $1.8 billion year over year.
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Operating expenses decreased by more than 30% year over year.
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The company ended the year with $247 million in cash and marketable securities up to $50
million.
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GoPro management expects gross margin to improve by 2018
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The expected operating expenses of about 400 million this year, a 35% gross margin would
require $1.15 billion in sales to breakeven which is exactly what GoPro has generated in past
years.
GROSS PROFIT MARGIN CHART
Revenue for quarter 2 2018 was $283 million, up to 40% quarter over quarter & down by 5% year over
year.
Hero 5 Black sold more than 4 million units since its launch in 2016.
Challenges
The company exited its karma drone business to sum losses
The company is trying attract customers with promotional offers.
Business model of GoPro
Revenue streams
Product sales is one of the revenue stream of GoPro which includes sales of cameras & accessories. The
pricing of cameras is as follows :
$199.99- Basic Hero session camera
$399.99- Hero’s silver camera
$499.99- Hero 4 black (most advanced features)
Customer Relationship
The customer relationship of GoPro is of mixed nature
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Self-service components
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Personal assistance components
There is self-service component in that customers who buy products through retail channels where there
is limited interaction with employees.
There is personal assistance component as resellers provide significant support to customers for egRepairs.
Cost Structure
GoPro aims to lower cost per unit of output as output grows. It follows economies of scale structure. The
biggest cost driver of GoPro is cost of revenue. Cost of driver includes variable costs i.e. (product cost,
third- party logistics & procurement costs & warranty repair costs).
Customer Segments
GoPro follows mass market business model. There is no significant differentiation between customer
segments. The company targets its lines of camera to any individual who want to be able to capture
imagery without having to hold the device in their hands.