GoPro, Inc.: Will Entry into the Drone Market Help its Comeback?

Abstract

Although GoPro has experienced tremendous growth since its foundation, investors have started to lose faith in the ability of the firm to continue on its success path. On March 14, 2017 the stock price reached an all-time low of $7.24 and has been trading below $10.00 ever since, thus considerably below the initial IPO price of $24.00 set in June 2014. This case describes how GoPro has rapidly grown to be a billion-dollar company and elaborates on the several challenges it has been facing in the recent past. Particularly, the competition in the action camera market has become very fierce. For example, the Chinese producer Xiaomi, which has launched products that are technologically advanced while priced very aggressively, has seen increased market share. At the time of the case, in June 2017, GoPro has just completed its entry into the drone market with the introduction of its model Karma. Despite the strong competitive pressures that characterize the drone market—with the Chinese manufacturer DJI holding approximately 70% of the worldwide market share—GoPro hopes this move will help its comeback. The case invites students to put themselves in the shoes of a business consultant who has been hired by GoPro to evaluate its entry into the drone market and provide recommendations to the top management team on how to win the competitive battle and become profitable again.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

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