The Dark Traits of Entrepreneurship
Discuss About The Entrepreneurship And Marketing Management?
A common saying goes that "Every sinner has a future and every saint has a past", so is the case with entrepreneurship. Behind each entrepreneur, there are personality traits, commitment obsession, desire for independence, longing for validation and fears among other feelings that drove them to start their own establishments. Similarly, in the case of GoPro, Woodman exhibits personality traits associated with the dark side of entrepreneurship (Mac 2013)
To begin with, a dark trait that is resplendently exhibitive in entrepreneurship is fear of failure. This pushes many entrepreneurs to great lengths to ensure that their ventures thrive in the market. (Spinelli and Zacharakis 2007). In the case of GoPro, Woodman had already failed in an online gaming venture and this failure was a constant reminder of the repercussions involved throughout his innovative camera creation.
Some entrepreneurs tend to have workaholic tendencies. This is more so when the business is still in the incubation stage and ideas are still being developed to bring the business to the market. This may affect their relationship with other people. Case in point is Woodman who was always developing the cameras in isolation for long periods (Kelleher 2016).
Another dark trait associated with entrepreneurship is an obsession to an activity. Many entrepreneurs open businesses backed by their own attachments towards particular items or activities. This may not always resonate with the customers. In the case of GoPro, Woodman had a strong obsession towards water surfing and skiing. In his own admission, he would never have created the high-resolution mount and wrist cameras had it not been for love of water sport (Mac 2013).
Many entrepreneurs also suffer from a desire for validation and applause. This comes mostly when their innovation is young and yet to get a foothold in the market. They will showcase their ideas or products in the hope of getting assurance or support. Sometimes this validation is not given and they panic. In the case of GoPro, Woodman showcases his creation to friends at parties and states that it is how they will make millions (Mac 2013).
According to Warren (2016), balancing feelings is also a dark trait experienced by entrepreneurs. When business is doing fine, the mood in the establishment is lively but when challenges set in, then it becomes intolerable to work in the firm as the entrepreneur has rapid mood swings as is evidenced by Woodman’s behavior in the case study.
Evidence that Supports Entrepreneurship as a Discipline
A mistake many entrepreneurs make is running their businesses with close friends and family, and confidants despite their lack of knowledge in managing the business. This stifles chances of expansion especially when the business is transitioning from medium to a large enterprise. The GoPro case study exhibits this as woodman works with close friends and family (Mac 2013).
The need for independence is another dark trait experienced by entrepreneurs. Many go into their own business because they cannot tolerate differing in opinion with others. For others, the case is being their own boss and not answering to others. Woodman clearly did not want to answer to a board of management from the case study (Warren 2016).
Sometimes entrepreneurs engage in irrational behavior. There are many instances where entrepreneurs invest shareholders funds without consulting or clearly picturing their investment. This puts the shareholder’s funds at unnecessary risk (Kelleher 2016).
Strictly going by the evidence portrayed in the GoPro case study, this reports affirms that indeed entrepreneurship is a discipline. From the GoPro case study, Woodman has the ability to set goals and make priorities to drive the business forward. This is exhibited by his decision to publicly list his company and get into partnership with other corporates like Foxconn. Setting goals is a learned attribute rather than an inborn trait (Varis and Littunen 2010).
Woodman also exhibits wide knowledge and abilities in the camera creation arena. This comes from his background in computer engineering which is a learned trait (Mac 2013). He also displays experience in the water surfing sport and recognized the market potential from the same having learned the sport himself.
From the case study, Woodman is able to make a sound judgment. This is evident from his decision not to sell the majority of his shares at a compromised price while still, the company was making profits. His decision paid off since the company's profits went up along with the value his shares. Sound judgment is a learned aspect (Zineldine and Philipson 2007).
To start with, Woodman realizes that his business requires support and extensive networks to be sustainable in the near term and long term. For this reason, he has taken a cue from developed businesses that at one point or another in their life cycle introduce shareholders to spread the risk and benefit from talent by partnering with Foxconn (Southern Cross University 2016).
It is also evident that before venturing in the GoPro cameras, Woodman had done extensive research in the market and realized that there was a demand that was unfulfilled in the water sports arena (Mac 2013).
GoPro's Competitive Advantage through Marketing Processes
The current market share estimates place GoPro as the market leaders in the provision of mini cinema cameras by commanding a third of the market share. This is marketing research as a discipline (Saxena 2010).Woodman seeks to grow his business by fulfilling other needs in the market to keep the business growing.
According to Mac (2013), GoPro has segmented its market by targeting only the water sports customers whose needs had not been met before. This is differentiation strategy, a discipline that stems from strategic management. Woodman also seeks to develop into other markets currently unfulfilled. This is evidently a market penetration strategy proposed by Ansoff when competition is rife.
Figure 1: Market operation strategies by Ansoff. Source: Southern Cross University (2016)
Competitive advantage for a company stems from having products and services that are unique and cannot be easily replicated by the competitors. It allows companies and the customers to pursue their win-win objectives. On one hand, the company products or services command loyal following by customers. On the other hand, the customers have products that best suit their interest and utility. This is achieved through both brand marketing and relationship marketing (Porter 2008).
From the case study, GoPro managed to create competitive advantage through focus differentiation (Eldring 2009). The company targeted the sporting customers who needed action cameras which were not available on the market at the time. By targeting the sports market GoPro was able to establish itself as a leader in that market segment (Kotler 2012).
GoPro created a unique brand. Through the creative innovation of action cameras that had unique capabilities not available in the market, GoPro managed to command a third of the market share simply because their brand marketing was exceptionally executed (Southern Cross University 2016).
Another way GoPro managed to gain a competitive advantage was through strategic alliances with an original equipment manufacturer like Foxconn and other hardware vendors. This communicated premium build to the customers since Foxconn ingenuity was already evident in Apple products. This gave the company traction from perceived stability by partnering with an already established company (Laboda 2012).
GoPro excelled at focus strategy. This implies that they only segmented customers in the sports arena and created value for them. This is unlike other competitors prevented GoPro from going after all customers and spend money marketing where there was no guarantee of return on investment. Subsequently, they were able to specialize in their niche market (Peng 2016).
GoPro action camera was perceived to be a leader in quality. This means that the company could charge their action cameras at a premium of between $200 and $400 still enjoy customer growth as the customers wanted to be associated with a quality premium product (Mac 2013).
A unique competitive advantage for GoPro was that their product could be mounted on any device and also be worn as an accessory. This was a creative innovation that had not been developed in the market and enabled the company to gather a huge following among the sports fanatics as well as regular customers (Southern Cross University 2016).
GoPro was able to achieve competitive advantage by creating customer clusters. Unlike other competitors like Sony who develop their cameras away from the customers, GoPro had the advantage of developing theirs near the customers which meant that they had close interactions and opportunities to incorporate customer feedback quickly into their units (Hunger and Wheelen 2014).
Relationship marketing also played a big role in creating a competitive advantage for GoPro action cameras. This is evident as the company provides other accessories to their customers after selling them the GoPro cameras. These accessories include mounting pads for the cameras, Karma drones, among others that keep the customers hooked to the product (Zineldin and Philipson 2007)
Social network marketing also played a key role to ensure brand awareness of GoPro action cameras. Although Woodman did not have a social network account, he invested heavily in social networks to the tune of a million dollars to ensure brand awareness of GoPro through social networks (Mac 2013).
The company does not manufacture hardware. It outsources this exercise to original equipment manufacturers hence are able to bring the lower the cost of production and also stick to their core competencies. This gives them an edge in the market and also increases their profit margins (Southern Cross University 2016).
An early entry in the action camera market also served as a barrier to entry for competitors since they would have to invest a lot of money and change their processes to be able to compete with GoPro (Porter 2008).
According to Porter (2008), a company should conduct an industry analysis of the market as part of the process to establish its strengths and weaknesses which are internal factors that the company has control and opportunities and threats which are external and out of the realm of control by the company. This is an industry analysis of the operating environment for GoPro. The future threats for GoPro are thus:
The company GoPro will experience the threat of empowered customers. The bargaining power of customers increases when there are many action cameras in the market. Since original equipment manufacturers are offering similar products the only differentiation is quality and price (Peng 2016). GoPro still faces an empowered customer since competitors like Sony can offer a quality product at similar or lower prices and there are no switching costs involved (Porter 2008).
Figure 2: Industry analysis using Porter’s five forces. Source (Porter 2008)
Besides GoPro, Sony is positioning itself as a very Strong contender in the action camera market. Currently, GoPro commands 21% of the market share in the United States (Mac 2013). Other strong rivals in future will include Samsung electronics and their point and shoot cameras as well as action cameras. Another strong competitor is LG not to mention an array of mobile phone manufacturers who are offering action cameras as accessories to their devices.
As is evident from the case study, GoPro does not manufacture its own camera components. Rather, they outsource the manufacturing aspect to other companies. By virtue of not controlling the components, GoPro is at the mercy of the suppliers. Since the suppliers have many customers they may decide to hoard the cameras or charge a price premium for the parts supplied. However, this threat is low since there are many suppliers and the switching cost to any supplier relatively low (Porter 2008).
There are many direct substitute products to the action camera that GoPro produces. An example is the mobile phones which nowadays have camera functions which can easily replace the utility of GoPro action cameras. Other substitutes include Camcorders in the market as well as standalone digital cameras. All these can easily replace the functions served by GoPro action cameras (Loboda 2012).
The threat of new entrants is very high as there is a very minimal barrier to entry (Lee 2015). To start with, Foxconn is developing cameras for the mass market. There are many Asian companies particularly China producing action cameras and may gain entry to the US thus posing a grave danger to GoPro.
Other threats include forward integration by GoPro suppliers. They may decide to compete directly with the company. The company is also exposed to decreased purchasing parity by the customers due to the global economy crisis. Moreover, the company he already listed for an IPO to go public which means external influences such as politics, the stock market, and legal issues may interfere with their business (Leitner and Guldenberg).
Lastly, falling stock prices and production of several models may lead to drop in the revenues collected by GoPro. This may lead to more company restructuring and loss of capable and talented management personalities (Warren 2016).
Firstly, the company needs to diversify. To be able to command a larger market, GoPro is considering venturing into consumer models which have access to social networks. This will decrease chances of failure (Peng 2016). The company may also consider incubating new ideas for business through innovation (Southern Cross University 2016)
As market rivalry is high, GoPro should consider going global to increase its market. The company may consider joint ventures or strategic alliances with other players to gain traction in new markets (Hunger and Wheelen).
To deal with increasing bargaining power of suppliers, the company may want to consider having multiple suppliers or having a contingency supplier unit to avoid any market shocks (Porter 2008).
GoPro has spread the risk by going public. The next step is to have a strong board of directors to run the operations of the company to avoid a situation where many entrepreneurs suffer a crisis of management (Warren 2016)
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