MGT604 Strategic Management: GoPro Company's Crisis and Strategies

This report provides a comprehensive strategic analysis of the GoPro Company, examining its challenges, particularly those arising from a product malfunction incident in China. The report begins with an overview of GoPro's background and the damaging incident, followed by an analysis of short-term strategies such as group offers and low-cost advertisements. It then explores long-term strategies including utilizing specialized lenses, expanding into mobile phone cameras, and targeting the military camera market. The report concludes with recommendations, emphasizing the potential of mobile phone cameras for future growth. The analysis considers market competition and technological advancements, aiming to guide GoPro towards regaining customer trust and ensuring long-term success. The report highlights the importance of strategic planning and adaptability in the face of market challenges.

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GO PRO COMPANY: STRATEGIC MANAGEMENT
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1GO PRO COMPANY: STRATEGIC MANAGEMENT
Executive Summary
The purpose of this report is to analyze the issues encountered by the GoPro Company that
has led to the decline of the company’s sales. The paper initiates with the information
regarding the background of the company and the description of the incident that has
damaged its reputation. Following this is the aim of the paper is stated and the short and long-
term strategies that the company can implement for better growth of the organization is
mentioned with a detailed description. The report concludes with a list of recommendations
regarding the strategy that the company can choose for its long-term development and such
other images used in the report are attached in the appendix at the end of the paper.

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Table of Contents
Introduction................................................................................................................................3
Aim.............................................................................................................................................4
Discussion..................................................................................................................................4
The Short Term Strategy........................................................................................................4
 Group offers.................................................................................................................4
 Low-cost Advertisements............................................................................................4
The Long Term Strategy........................................................................................................5
 Utilizing specialized lens.............................................................................................5
 Mobile Phone Cameras................................................................................................6
 Military Cameras.........................................................................................................7
Conclusion..................................................................................................................................8
Recommendations......................................................................................................................8
References................................................................................................................................10
Appendix..................................................................................................................................12

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Introduction
The GoPro Inc. is an American based technological company established by a skier,
surfer and motorsports enthusiast, Nick Woodman in 2002. The company manufactures
proficient action cameras as well as develops video editing software and mobile apps to aid
its own products. The company has developed from making a 35mm camera and a wrist strap
prepared from plastic scraps and old wetsuits to a globally recognized company selling over
26 million GoPro cameras in well above 100 countries (gopro.com. 2019). The name GoPro
was inspired from the term “going pro,” meaning to become proficient in a particular field.
The range of cameras produced by the company was branded as ‘Hero’ pertaining to the fact
that the aim of the owner of the company was to capture close up action shots, which devised
the subject of the image to appear like a hero.
However, there has been a lethal incident, which has caused detrimental effects on
the company’s international reputation. The head of Zeong Lee Sport Store Chain in China,
one of the prime customers of the company, occupying seventy percent of the company’s
production, has decided to terminate their contract as certain cameras manufactured by the
company in China, have burst into flames, causing fatal impacts on the users. The company’s
technological team have failed to point out the issue, which had led to the incident, and are
still looking into the matter. With the threat of imminent termination of the contract and the
fear among the customers regarding the safety of the products of the company, the sales have
declined drastically. In order to fix this issue the company has implemented certain discount
offers to uplift the sales. However, specific short and long-term strategies needs to be
implemented for re-building the customer trust and prolong the longevity of the company
(Goetsch & Davis, 2014). The purpose of this report is to evaluate these short and long-term
strategies in a detailed manner.

4GO PRO COMPANY: STRATEGIC MANAGEMENT
Aim
The aim of this report is to critically construct and analyze the short and long-term
strategies that the company needs to implement for regaining customer trust and the future
developments of the company.
Discussion
The Short Term Strategy
The short-term marketing schemes procure a temporary boost for a company’s
production and is crucial for all business types (Baker, 2014). The GoPro Company can
implement the following short-term strategies to regain customer loyalty and set the course
for the long-term growth of the organization:
 Group offers: Due to the recent incident that has hampered the company’s sales in
China primarily, the organization can target the customers of China and provide them
with tailored discount offers in order to enhance the sales temporarily. (Marinesi ,
Girotra & Netessine , 2017) Discounted prices often lure new customers as well,
which might benefit the company.
 Low-cost Advertisements: Companies of varied kinds often tend to use low cost
advertising techniques when encountering difficulties in profit accumulation, this
being an efficient strategy to help improve the condition of the concerned
organizations (Van Heerde et al., 2013). Unless the sales of the GoPro Company are
improving, the organization can shift to advertisements and promotions that have a
lower cost. Since the company owns certain personalized software applications, it
feature advertisements of their own organization in such applications. This aids the
company to save capital that can be invested to repair the flaws of the cameras that
had caused the incident and for the further growth of the organization.

5GO PRO COMPANY: STRATEGIC MANAGEMENT
The Long Term Strategy
The long-term strategies are implemented to secure the development of the company
by ensuring its prolonged longevity in the market, and catering to the expansion of the
company’s portfolio and thereby its scope and market size (Milichovsky & Simberova,
2015). After gaining an edge from the aforementioned strategies and solving the issue, the
GoPro Company can further plan to invest in long-term schemes that shall aid in the future
growth of the company. The suggestions for such long-term refurbishments are stated below:
 Utilizing specialized lens: The GoPro Company already has a wide range of
products with lenses of varied kinds. However, there is always a scope for further
improvement. The investment in procuring certain specialized lenses by the company
will expand the demand of the merchandise sold by the company, resulting in a higher
yield in the future and is an impressive technological advancement. There are such
other companies like Balser AG, Sealife Cameras, Polaroid Corporation, Olympus
America Inc. and so on, which pose as strong competitors of the GoPro Company
(Wu, 2019). By advancing their technological levels, the company can remain ahead
of its competitors and operate with an enhanced edge in the global market. The
company can utilize the following lenses to enhance their market position:
o The Tilt Shift Lens- These lenses provide enhanced depth of field options and
reduces distortion significantly, sporting a popular style seldom utilized in
both landscape and portrait photography (Nocerino et al., 2016). Since, these
lenses are widely sought after by architectural photographers, inclusion of this
sort of lens shall contribute in expansion of the customer base of the GoPro
Company (refer appendix 1).
o The Macro Lens- These are highly specialized lenses that allows the
photographer to capture the details at an almost microscopic level (refer

6GO PRO COMPANY: STRATEGIC MANAGEMENT
appendix 2). It has the ability to adjust the minimum focus distance by having
an extra-long throw that provides a shallow depth of field. Such lenses are
expensive and can improve the revenue of the GoPro Company eminently if it
is selected as a new product that the company can incorporate into its models.
o The Ultra Wide Angle Lens- The special attribute of these lenses is the
tendency to stretch the background of the images to make them look surreal in
nature (refer appendix 3). Such inclusions in the company’s portfolio will
diversify the portfolio of the company and thereby lure more customers to
purchase the new products.
 Mobile Phone Cameras: The invention of internet and the mobile phones together
has integrated the global population to such an extent that both have become a pivotal
aspect and almost a necessity for people in almost every corner of the world (Agar,
2013). The various mobile phone companies incorporate highly advanced
technologies with each passing day to make their products better than the other
companies of the same background. Mobile phone cameras are pivotal to every
mobile phone manufacturing company as common masses are often lured to buy
mobile phones that are significantly better in quality (Goggin, 2013). The GoPro
Company can consider expanding into the production of these mobile phone cameras
for the phone companies. The level of sophistication that the GoPro Company shall
bring to configure the cameras for the phone companies is a matter of huge
anticipation. It should also be mentioned that mobile phone companies often prefer
making their own products wholly. In such cases, the GoPro Company can
manufacture external lenses of higher quality that can be attached to the mobile
phones for enhanced images. This new technological venture shall expand the

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company’s base of customers, as it will generate the interests of the common masses
along with the professional photographers.
 Military Cameras: The defense industries around the world are improving their ways
and methods to gain an enhanced edge. In order to do so, the introduction of several
new instruments are embraced, among such instruments is the introduction of various
types of cameras that are used by the defense industry to improve surveillance
(Hiltner, 2013). In this aspect, the GoPro Company can venture into aiding the
defense sector of several economies around the world. A contract with the military
would prove to be extremely beneficial to the company’s image and popularity.
Association with the defense department not only caters to provide the company with
better prospects of earning higher revenues but also raises its prominence in the
international market, making a better scope for the company’s future. (Pisani & van
den Dolder, 2018) In order to proceed in this new venture the company needs to
invest significantly into such products as CCTV cameras, drone cameras, helmet
cameras and such other types of cameras that can be utilized by the defense industries.
It must also be noted that the manufacturing of CCTV cameras and drone cameras fall
under the privacy legislation of several countries. The company needs to abide by
these privacy regulations and have their manufacturing units approved by the defense
industries for proceeding without hindrances. The GoPro Company shall encounter
competitors like Parrot, Yuneec, Kespry, Autel Robotics and such other companies
that are already in the drone making industry (Al Habsi, 2015). To ensure their
advancement, the company needs to invest in new researches for procuring new
technologies that can further improve the prospects of the types of cameras used by
the defense industry.

8GO PRO COMPANY: STRATEGIC MANAGEMENT
Of the aforementioned categories, the expansion of the company in the production of
mobile phone cameras is a viable option and is further elaborated in the recommendation
section.
Conclusion
It can be deduced from the above discussion that the GoPro Company is in a state of
crisis due to the incident concerning the malfunctioning of certain models manufactured by
the company in China. The immediate concern of the company thus should be to rectify the
mistakes committed and reorganize production facets to prevent such accidents from
happening in the future. Since this particular incident has affected the customers directly, the
company must implement the short-term strategies to regain the amount of customers that are
lost to the organization. The short-term strategies shall also work to improve the trust of the
investors of the company. The discussion also mentions certain long-term strategies that shall
benefit the company after the successful accomplishment of the short-term schemes. The
long-term strategic ideas will not only expand the reach of the company globally but also will
contribute to strengthen the company’s future position. Therefore, with the implementation of
these strategies, the company shall triumphantly attain the trust of its customers and proceed
towards a better future.
Recommendations
1. In order to venture into a secure and better future, the GoPro Company can choose to
proceed in the manufacturing of mobile phone cameras due to the wide scopes
available in that particular market.
2. Mobile phones are an integral facet of people’s lives in the 21st century, and hence the
amount of companies producing such products are massive (Gao et al., 2013). This
expands the prospects of the company to choose the highly popular brands such as

9GO PRO COMPANY: STRATEGIC MANAGEMENT
Apple, Samsung, Xiaomi, Huawei and such other companies that are secured with
huge consumer loyalty.
3. Several companies might refuse to let an intervention of other camera manufacturing
companies within the structure of their production. Herein the GoPro Company can
innovate further by producing external cameras with specialized lenses that are more
sophisticated than the mobile phone cameras and can be attached with the mobile
phones to capture enhanced photos.
4. The customer base of mobile companies, are varied and incorporate almost every
sector of the economies (Moreno-Munoz et al., 2016). The intervention of the GoPro
Company in this market will result in widening the existing customer base, since
mobile phone cameras are used by every other individual and not only by
professionals.
5. Since the entry of the GoPro Company into the market of manufacturing mobile
phone cameras is a new strategy, the company might not have ample knowledge that
is required for the manufacturing of these products. Hence, the GoPro Company
needs to widen its base of research facilities for successfully gaining a prominent
position in the marketing of mobile phone cameras.
6. Since the area of expansion is new for the company, the marketing policies related to
the innovated products needs to be enhanced. Direct marketing, cause based
marketing, international marketing and such other marketing strategies can be
implemented by the company to promote the newly manufactured products
(O'shaughnessy, 2014). The use of online advertising is perhaps the most efficient
option since the product is mobile phone cameras.

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References
Agar, J. (2013). Constant touch: A global history of the mobile phone. Icon Books Ltd.
Al Habsi, S., Shehada, M., Abdoon, M., Mashood, A., & Noura, H. (2015). Integration of a
Vicon camera system for indoor flight of a Parrot AR Drone. In 2015 10th
International Symposium on Mechatronics and its Applications (ISMA) (pp. 1-6).
IEEE.
Baker, M. J. (2014). Marketing strategy and management. Macmillan International Higher
Education.
Gao, T. T., Rohm, A. J., Sultan, F., & Pagani, M. (2013). Consumers un-tethered: A three-
market empirical study of consumers' mobile marketing acceptance. Journal of
Business Research, 66(12), 2536-2544.
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence.
Upper Saddle River, NJ: pearson.
Goggin, G. (2013). Mobile phone cultures. Routledge.
Gopro.com. (2019). About Us. Retrieved 27 July 2019, from https://gopro.com/en/in/about-
us
Hiltner, P. J. (2013). The drones are coming: Use of unmanned aerial vehicles for police
surveillance and its fourth amendment implications. Wake Forest JL & Pol'y, 3, 397.
Marinesi, S., Girotra, K., & Netessine, S. (2017). The operational advantages of threshold
discounting offers. Management Science, 64(6), 2690-2708.
Milichovsky, F., & Simberova, I. (2015). Marketing effectiveness: Metrics for effective
strategic marketing. Engineering economics, 26(2), 211-219.

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Moreno-Munoz, A., Bellido-Outeirino, F. J., Siano, P., & Gomez-Nieto, M. A. (2016).
Mobile social media for smart grids customer engagement: Emerging trends and
challenges. Renewable and Sustainable Energy Reviews, 53, 1611-1616.
Nocerino, E., Menna, F., Remondino, F., Beraldin, J. A., Cournoyer, L., & Reain, G. (2016).
Experiments on calibrating tilt-shift lenses for close-range photogrammetry.
International Archives of the Photogrammetry, Remote Sensing & Spatial
Information Sciences, 41.
O'shaughnessy, J. (2014). Competitive marketing (RLE marketing): A strategic approach.
Routledge.
Pisani, N., & van den Dolder, P. (2018). GoPro, Inc.: Will Entry into the Drone Market Help
its Comeback?. SAGE Publications: SAGE Business Cases Originals.
Van Heerde, H. J., Gijsenberg, M. J., Dekimpe, M. G., & Steenkamp, J. B. E. (2013). Price
and advertising effectiveness over the business cycle. Journal of Marketing Research,
50(2), 177-193.
Wu, S. (2019). Strategy for Executives: 2019 Edition. Sun Wu.

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Appendix
Appendix 1
(Source: Digital-photo-secrets.com/tip/1368/what-is-tilt-shift-photography/, 2019)
Appendix 2
(Source: Borrowlenses.com/blog/what-is-a-macro-lens/, 2019)

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Appendix 3
(Source: Photographing-iceland-using-ultra-wide-angle-lenses, 2019)

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Peer Marking Table