Businessmodel of GoPro

Customer Segments

GoPro has a mass market business model, with no significant differentiation between customer segments. The company targets its lines of cameras to any individuals who want to be able to capture imagery without having to hold the devices in their hands.

Value Proposition

GoPro offers three primary value propositions: convenience, accessibility, and brand/status.

The company’s cameras create convenience by allowing users to attach it to themselves hands-free, which particularly comes in handy during physically demanding activities such as extreme sports. The products are also easy to use due to their small size and light weight. Moreover, it is simple for customers to share images thanks to easy integration with mobile devices through the GoPro app.

The cameras enable individuals of all backgrounds and in all industries to capture professional-level images at reasonable prices. This increased accessibility has led to the product going mainstream.

The company is a well-established brand due to the fact that it essentially created a new market – that for action cameras. Its status has been enhanced by the fact that it has continued to innovate over its lifespan, offering incentives for customers to purchase new versions. GoPro’s powerful reputation has led to sales of 20 million capture devices, 24 million downloads of the GoPro App, and 2015 revenues of $1.62 billion. It is sold in over 100 countries through 40,000+ retail outlets.

Channels

GoPro’s channels are relatively evenly divided; retail sales account for 52% of revenues and distributors account for 48%. Its retail channels include independent specialty retailers, big box retailers, mid-market retailers, and its online store at gopro.com. It sells its products to more than 50 distributors who resell the items to chains in foreign markets and certain verticals in the U.S.

The company also promotes its offerings by integrating original content into ad campaigns across numerous platforms, including print, online, TV commercials, and billboards. Further, it forms brand partnerships with prominent athletes and attends events such as trade shows/conferences.

Customer Relationships

GoPro’s customer relationship is of a mixed nature. There is a self-service component in that customers who buy its products through retail channels utilize the items while having limited interactions with employees.

That said, there is also a personal assistance component as resellers provide significant support to customers (repairs, etc.). Furthermore, the company offers phone, e-mail, and chat support through its website.

Lastly, there is a strong community component as the firm encourages customers to communicate with each other through its social media platforms.

Key Activities

GoPro’s business model entails designing its products for production. It outsources the majority of its manufacturing to contract firms in China, believing that doing so allows it to have greater flexibility and scale than if it were to produce the items itself.

Key Partners

GoPro works with retail and dealer partners (resellers) to have them sell its products effectively. It provides training to partner staff for this purpose.

The company maintains an Affiliate Program through which it works with websites to promote its products through their platforms. However, as of April 2014 it is no longer accepting new members (though the program remains in operation).

Key Resources

GoPro’s main resources are its various employee groups. Its product development team engages with consumers and opinion leaders in the camera market to ensure a user experience-driven approach to product design. Its media production team conducts regular travel to capture images using GoPro equipment, which helps aid design and inspire concepts for new devices.

Its engineering team develops technologies to support the ideas brainstormed by the product development team. Another key resource is intellectual property – as of 2016 GoPro has 114 issued patents in the U.S.

Cost Structure

GoPro has an “economies of scale” structure, aiming to lower cost-per-unit of output as output grows. Its biggest cost driver is cost of revenue, which includes variable costs (product costs, third-party logistics and procurement costs, and warranty repair costs).

Other major drivers can be found in the areas of sales/marketing, research/development, and administration, which are all fixed costs.

Revenue Streams

GoPro has one revenue stream, product sales. This involves sales of cameras and accessories. Its camera pricing is as follows: $199.99 for its basic Hero Session camera, $399.99 for its Hero4 Silver camera, and $499.99 for its Hero4 Black, which has the most advanced features.