GoPro (NASDAQ:GPRO) rallied about 20% over the past month thanks to a second-quarter earnings beat, a reduction in its inventory, and the belief that sales will improve after it launches its Hero 5 camera and Karma drone during the holiday quarter.

Unfortunately, GoPro's management also has a bad habit of breaking promises and making short-sighted business decisions, which raises doubts about its ability to successfully launch those two products. Therefore, I believe that GoPro would benefit from management changes for three reasons.

Image source: GoPro.

1. Overpromising and underdelivering

GoPro frequently teases upcoming services and products, but rarely delivers them. Shortly before its IPO in mid 2014, GoPro hired former Skype CEO Tony Bates as its President to expand its channels on YouTube, Xbox Live, Virgin America, and other platforms into a full-blown media business.

In GoPro's S-1 filing, it declared that it would "scale as a media entity and develop new revenue opportunities" using its cameras. Bates secured partnerships with companies, got the GoPro channel on a few more platforms, hired professionals to create original content, and launched content licensing and VR sites. But none of those pieces fit together to create a cohesive, revenue-generating media ecosystem.

GoPro CEO Nick Woodman also declared that the company was developing a cloud platform for storage and editing, as well as a stand-alone 360-degree camera, but we haven't heard any updates about those products. Last year, Woodman stated that the Karma would launch in the first half 2016, but then abruptly delayed the launch to the holiday quarter. These unfulfilled and broken promises make it tough to take GoPro's management seriously.

2. Chaotic business plans

GoPro's product launches over the past year indicate that it has no clear long-term strategy for its cameras. Instead of launching big flagship cameras during the holiday quarter last year, GoPro launched three cameras throughout the year -- the mid-range Hero+ LCD and Hero+ and the high-end Hero 4 Session -- to even out sales and reach more customers.

However, the mid-range cameras cannibalized GoPro's higher-end Hero 4 Silver and Black, and the Hero 4 Session's price had to be cut in half to $200 before any buyers showed up. In April, GoPro discontinued its three low to mid-range devices (Hero, Hero+ LCD, and Hero +) to simplify its product line and stop the cannibalization. But that move also meant that GoPro's attempt to reach more "mainstream" users had failed.

Image source: GoPro.

All of Woodman's "new" ideas are just imitations of other companies' products. The Omni and Odyssey VR rigs are copies of similar rigs from smaller third-party manufacturers. The Karma is just a response to DJI Innovations' decision to start using its own cameras in its drones instead of GoPro's. Its elusive 360-degree camera is a mere knee-jerk response to similar products like Samsung's Gear 360.

3. Inability to counter the competition

GoPro believes that the Hero 5 and Karma will sell so well that they will boost the company's bottom line back into the black. However, rival camera and drone makers have already leapfrogged GoPro with new features, and Woodman hasn't explained how it will counter the competition.

TomTom's Bandit action camera has a GPS and sensors which detect moments of high acceleration, deceleration, rotation, vertical speed, G-force, and even heart rate data from an optional chest strap. Cameras like the LG Action Camera have 4G connectivity. Yi Technology's 4K Action Camera 2 sports the same Ambarella image processor as the Hero 4 Black but costs half as much at $250.

In drones, Apple gave DJI huge "feature bay" displays for its new Phantom 4 drone at over 400 of it brick-and-mortar stores earlier this year. It also let DJI employees host drone training sessions at its stores. Apple's heavy promotion of DJI drones could easily steal the Karma's thunder this holiday season, but Woodman didn't even mention that formidable alliance during last quarter's conference call.

The bottom line

GoPro has a well-known brand, but its strategy of selling high-priced accessories like VR rigs and drones for its cameras is unsustainable. As long as Woodman and Bates lead GoPro, the company's strategy will revolve completely around selling stand-alone cameras and accessories to stream content onto YouTube to build brand awareness.

But brand awareness isn't the problem -- it's the fact that GoPro owners aren't upgrading their "good enough" cameras and mainstream users don't want to buy them when their smartphones work just fine. Unless GoPro is led by management which understands how to address this issue, I believe that its sales and profits will continue to fall.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.