Question

What is GoPro's Business Model from Case 7 Pages 307 to 321 in the textbook Essentials of Strategic Management, the Quest for Competitive Advantage, the 6th edition?

Answer 1

GoPro. Inc is a company which develops and sells small cameras and camera accesories both with in the country (United states) and internationally. Main uniqueness of their cameras was waterproof, smaller and virtually indestructible.

Business Model Analysis of GoPro:

[1] Revenue Model: (Shows the growth opportunities of GoPro)

• Offerings: Both new and existing offerings
• Transactions
• Customers: Both new and existing customers
• Price: Free, Competitive, Premium, Fremium

Lets look at the performance of GoPro:

1. Growth of Revenue: 26.8% of growth Year on Year for GoPro
2. COGS share of revenue: 61% of its total revenues are spending on COGS by GoPro
3. Inventory Share of revenue: 14.1% of its total revenues are spend on inventory by GoPro
4. Net Margins: Net margins in the year were 35.3%

[2] Business Analysis: (It is As Is Analysis)

New age business models in the Industry are transforming both customers and businesses. The starting point of business model analysis of Go Pro. Inc is Benchmarking. It can be done in the following levels:

• Industry Benchmarking
• Peer Benchmarking
• Disruptors Benchmarking

Benchmarking:

Benchmarking is the contineous systematic process of measuring one's output and / work processes against the toughest competitors or those referred toughest in the industry.

In simply it can be defined as "A process where you measure your company's success against competitors to discover how to improve your performance."

The main competitive advantage of GoPro Inc by Benchmarking is:

• In the highly competitive market there should be a contineous improvement for the company.
• It reveals the strength and weakness in the company.
• GoPro can measure themselves against the best industry practices.
• Promotes superior performance by providing an organizational framework through which GoPro learn how the "best in class" do things
• Intensive studies of GoPro lead to the identification of non-value added plans and activities for process improvement.
• It Inspire GoPro to compete.
• GoPro can borrow ideas, refine and adopt them to gain a competitive advantages.
• It should be a basis for providing training to the Human Resources (HR)

[3] Operating Model: (It should be a cost optimization Opportunities for GoPro)

• Expenses: CGS (Cost of Goods Sold), SG&A expenses, R&D expenses and other expenses
• Assets: Both tangible and intangible Assets
• Capabilities: Core and Adjacent