MGMT 321 Yujie Sun Five Forces And Resource Assessment Analysis For GOPRO Industry Context Threat of New Entrants: Low to Medium Pressure The entry barriers are relatively low for this industry. Companies need to have advanced video capture technology, but with no big capital requirement. Also, no exit costs exist in this industry. For buyers, there is no switching cost. However, new firms must spend heavily to build its brand identity given that Gopro has already created good brand loyalty. It shouldn’t be a surprise that we will see more entrants going to this market, but new entrants wouldn’t have big threat to Gopro in the near future. Threat of Substitutes: Medium Pressure Currently in this industry, there are many alternative choices, such as Sony, Drift, Garmin. At least for the moment, Gopro doesn’t have a unique ability to fulfill a customer’s need. It is not highly differentiated from other similar products. And this is the reason why Gopro is trying to do content creation and to hire many athlete ambassadors for its brand. Although Gopro has an advantage on product quality, its price is relatively higher than most brands. Plus, many substitutes have some creative features integrated: WIFI, GPS etc. We can imagine that an increasing number of equivalent alternatives for Gopro will emerge in the market and probably with lower prices to compete with Gopro. The Bargaining Power of Buyers: Low Pressure Individuals don’t have much pressure on Gopro. The likelihood for existing buyers to switch products will be minimal considering the brand loyalty. With the expansion of target consumers to all people (used to be athletes and adventure sports persons), the price sensitivity of buyer will increase. And if any competitors give an improved performance, the pressure will be higher
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- Fall '08