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BM - GoPro Case - Group 6
BM - GoPro Case - Group 6
BM - GoPro Case - Group 6
● Submitted by - Group 6
Should GoPro leverage its brand to enter product categories beyond camera? What are the
opportunities? What are the Risks?
GoPro has built a name for itself and has become synonyms with the tern “action cameras”. It can
leverage its brand to enter product categories beyond cameras. The brand since the beginning has been
using adventure lifestyle as a means of advertisement. The adventure lifestyle can be used and
leveraged to enter a variety of adventure and sports product categories.
There are numerous opportunities that can be explored by GoPro. Some of the very promising
opportunities are:
Surfboards
Pros
It would look like a natural extension
GoPro has its roots in surfing
It was already sponsoring a renowned surfer “Kelly Slater”.
Market size of $2.5 Billion with an annual growth rate of 11%
Lack of presence of dominating brands
Mountain Bikes
Pros
Projected sales of whooping $13.4 Billion and a growth rate of 9.2%
High gross margins of about 40-50%
The Brand Extension must reflect the original core value of the parent brand
There should be a logical balance between the parent brand & the extension; otherwise it might
lead to brand dilution.
The risks involved with the brand extension for Go Pro are:
Mountain Bikes – Already dominated by three big bike companies – Trek, Giant &
Specialized. There is a possible chance that there would a kind of market saturation in this
sector & customer might already be satisfied by the services of already existing player in this
market. Investments were also required to continue the collaboration with sportspersons & for
further innovation in the products. Also the gross margin for retailers was quite low as
compared to clothing sales & other mountain bike related equipment.
Skies & Snowboards –With an annual growth of 1.2% over the last 5 years, it was a low
growth market & the snow sports hard goods were getting overshadowed by soft goods such
as outwear ($1.8 billion) and apparel accessories ($732 million)
Surfboards – Absence of any major brand & with an annual growth rate of 11% for the past
4 years, the amount of risks involved in this case was quite low as compared to the above two
mentioned options.
Question 2.
To what Extent should Go Pro use Partner versus Develop product Extensions in House? What
should partner deals look like if Go Pro choose to Purchase them?
Go Pro should go for Product Extensions in a partnership because it was very difficult to develop
an entire line of product, Since they have to develop the entire Design from Scratch, as mentioned in
the case when Go Pro developed their early line of apparel, Tony Bates Director and Former
president of Go Pro revealed that there were three basic challenges with this approach: First it was
very expensive, second there is limit to their resources, third it was very limiting. Go Pro was also
facing a Dilemma whether they should stay true to their roots or try some other product line. One
more thing we can consider that the Go Pro brand Evaluated itself out of a passion for adventurous
sports it was heavily influenced by its initial, core Demographic, from which content could be
created and subsequent product could be sold and Distributed. Moreover there two important factors
in the Successful implementation of a brand extension for Go Pro which were:
Recognizing the importance of Intellectual Property (IP)
Optimizing for High Margin Business.
Question 3.
What companies, if any, serve as a good brand extension examples for GoPro? Which do not?
As a brand extension
The company’s business focus was to develop product solutions that enabled consumers to
capture, manage, share, and enjoy some of the most important moments in their lives. In
addition to selling action cameras to capture live events, the company could diversify into
several related businesses, including software and drones.
The company should continue building the existing capture device business while also
launching complementary new device categories like drones and devices to capture virtual
reality content.
In addition, company can focus on releasing new content management, editing and sharing
solutions that will provide increased value to new and existing consumers.
The company can focus on product leadership and innovation in its cameras, and in mounts,
accessories, and batteries as further brand extension.
Partnership
Though there are several opportunities in partnership with other company like surfboard retail
market, mountain Bikes market, skis & snowboards however this will hamper the brand core
value and the customer- centric roots of company.