A Cirque du Soleil Business Strategy Proposal

1. Welcomes You

2. Consultancy Team Members
Alan Diamond Project Manager
Róisín O’Malley Group Strategic Director
Niall O’Sullivan Industry Analyst
Sarah May Clarke Innovation Director
Susan Vickers Research Analyst

3. Profile of Think Tank
Think Tank is a strategic
marketing, branding &
innovation consultancy that
thinks differently to help
clients build transformational
advantage & create new profit
opportunities .

4. What Think Tank Are Here To Achieve
WE ARE HERE TO CARRY OUT A STRATEGIC
ANALYSIS ON CIRQUE DU SOLEIL’S BUSINESS
ENVIRONMENT AND TO PROVIDE
RECOMMENDATIONS FOR THE FUTURE
STRATEGIC DIRECTION OF THE ORGANISATION.

5. Analysis Breakdown
External Internal
Environment Environment
1) PESTEL Analysis 1) Strategic Capabilities
2) Porters' Five Forces 2) Value Chain Analysis
3) Strategic Grouping 3) Benchmarking
TOWS Analysis

6. PESTEL Analysis
Political Factors Economic Factors Social Factors
1. Demographics
1. Government 1. Recession
Parties 2. Trends
2. Unemployment
2. Terrorism 3. Leisure
3. Exchange Rates
3. Education 4. Living
4. Inflation
4. The Euro Standards
5. EU 5. National Income
5. Language
Enlargement Barriers

7. PESTEL Analysis
Technology Environmental
Legal Factors
Factors Factors
1. Noise & Air 1. Employment
1. Ticket Distribution
Pollution Law
2. Sound & Audio
Engineering 2. Energy 2. Product Safety
Consumption
3. Advertising & 3. Health & Safety
Marketing 3. Traffic
4. Taxation
4. Innovation Congestion
5. Competition
5. Rate of Technology 4. Waste Disposal
Obsolescence Law
5. Global Warming

8. Porters Five Forces
Slim
Potential Entry Possibility of
New Entry
Threats
Consumers
Cirque du Soleil
Suppliers Vs. Buyers
The Chinese State
Circus
1) Raw Materials 1) Online Distribution
2) Logistics Substitutes
2) No Brand Loyalty
3) Labour
4) Finance
Chinese State
Circus, Broadway, The
West End

9. Porter’s Five Forces Summary
Competitive Barriers to Power of Power of Threat of
Rivalry Entry Suppliers Buyers Substitutes
1. Competitor 1. Some 1. Concentrated 1. No Brand 1. No Brand
Balance Barriers to Suppliers Loyalty Loyalty
2. Industry Entry 2. High 2. Low 2. No Close
Growth Rate 2. High Cost Switching Switching Consumer
3. High Fixed Based Costs Cost Relationship
Costs 3. High 3. Buyer 3. Price
4. Low Capital Competition 4. No
Differentiation Investment Threat Switching
4. Distribution Costs for
Channel Consumer
Ownership
5. Price

10. Strategic Group Analysis
HIGH
PRICE
LOW
NARROW BROAD
GLOBAL PRESENCE

11. Potential Strategic Group
HIGH
PRICE
LOW
NARROW BROAD
GLOBAL PRESENCE

12. Strategic Capabilities
Resources Competences
THRESHOLD THRESHOLD
CAPABILITIES RESOURCES THRESHOLD
•TANGIBLE COMPETENCES
•INTANGIBLE
CAPABILITIES UNIQUE
FOR RESOURCES CORE
COMPETITIVE •TANGIBLE COMPETENCES
ADVANTAGE •INTANGIBLE
(Johnson, G, et al 2008)

13. Resources
Threshold Unique
Resources Resources
Tangible Tangible
1) Financial 1) Human Resources
2) Physical
Intangible Intangible
1) Technology 1) Culture & Knowledge

14. What is Cirque du Soleil’s Core
Competence?
Everything Matters!
Reputation
Innovation
Cirque du Soleil has achieved a Blue-Ocean
Strategy. Its competitive advantage comes from
its reputation which is hard to emulate.

15. Value Chain
INFRASTRUCTURE
SUPPORT
ACTIVITIES
ADVANCED CORPORATE HEADQUARTERS
HUMAN RESOURCE MANAGEMENT
HIGH COST TRAINING EXTENSIVE EMPLOYEES MANAGEMENT CONTROL IN-HOUSE
TECHNOLOGY DEVELOPMENT
HIGH TECHNOLOGY INTERNET INTERNET INFORMATION
PROFIT MARGINS
PROCEDURE
STANDARDIZING ITS PRACTICES ALLIANCES OUTSOURCED PRIVATE
INBOUND OPERATIONS OUTBOUND MARKETING Services
LOGISTICS LOGISTICS & SALES
PERFORMERS PERFORMERS TRAINED LOCALIZED MERCHANDISE
SENT TO PERFORMERS GLOBAL E.G. DVD’S
MONTREAL MARKETING
FOR 4 MONTHS TEAMS PRIMARY
ACTIVITIES

16. Cirque du Soleil’s Value System
SUPPLIERS VALUE CHAIN CHANNEL VALUE CHAIN CUSTOMER VALUE CHAIN
THIRD PARTY
SERVICE
PROVIDERS Family
Ticketmaster,
LiveNation
etc.
Performers Cirque du Friends
Soleil
Cirque du
Soleil’s
website Colleagues
Technology

17. Opportunities
Financial Markets (raise money through debt, etc.)
Emerging Markets & Expansion Abroad: Untapped Locations
Innovation – Continue to Innovate Show Formats
Online – Using Social Media as a Tool to Increase Market
Penetration & Recruit New Customers
Product & Service Expansion: Sister Company
Threats
Competition from The Chinese State Circus
Cheaper Technology (high cost base)
Economic Slowdown
Exchange Rate Fluctuations
Lower Cost Competitors or Imports: Low Switching Cost
Product Substitution, Consumers Could Downgrade

18. Strengths
PR – Marketing Development
Location Factors – Creative Development
Management & HR
Resourcing – Relationship with Suppliers
Weaknesses
Market Stagnancy (Accommodation Change)
Employees Being Poached by Competition
Visa Restrictions for Employees
Hierarchical Management

19. TOWS Matrix
STRENGTHS (S) WEAKNESSES (W)
SO STRATEGIC OPTION WO STRATEGIC OPTION
USE THE FIRMS IMPROVING INTERNAL
OPPORTUNITIES (0) INTERNAL STRENGTHS WEAKNESSES BY
TO TAKE ADVANTAGE TAKING ADVANTAGE OF
OF EXTERNAL EXTERNAL
OPPORTUNITIES OPPORTUNITIES
ST STRATEGIC OPTION WT STRATEGIC OPTION
USING FIRMS DEFENSIVE TACTICS
STRENGTHS TO AVOID AIMED AT REDUCING
THREATS (T) OR REDUCE THE INTERNAL WEAKNESSES
IMPACT OF EXTERNAL AND AVOIDING
THREATS ENVIRONMENTAL
THREATS
(Johnson, G, et al 2008)

20. Cirque du Soleil’s TOWS Matrix
STRENGTHS (S) WEAKNESSES (W)
SO STRATEGIC OPTION WO STRATEGIC OPTION
CIRQUE DU SOLEIL TARGET MARKET,
OPPORTUNITIES (0) MANAGEMENT LOWER INCOME DUE
CREATING NEW SHOWS TO RECESSION
CONTINUING TO
INNOVATE
ST STRATEGIC OPTION WT STRATEGIC OPTION
BECAUSE OF THEIR DEFENSIVE. AVOIDING
REPUTATION THERE COMPETITION. THREATS
THREATS (T) COULD BE A BACKLASH OF POACHING
IF CIRQUE DU SOLEIL EMPLOYEES THROUGH
WERE TO CREATE A OVER-PROMISING ON
LOW COST INCENTIVES THAT THEY
ALTERNATIVE CANT MEET

21. Strategic Options
VERTICAL /
HORIZONTAL INTENSIVE DIVERSIFICATIO DEFENSIVE
INTEGRATION STRATEGIES N STRATEGIES STRATEGIES
STRATEGIES
 FORWARD  MARKET  CONCENTRIC  JOINT VENTURE
INTEGRATION PENETRATION DIVERSIFICATION  RETRENCHMENT
 BACKWARD  MARKET  CONGLOMERATE  DIVESTITURE
INTEGRATION DEVELOPMENT DIVERSIFICATION  LIQUIDATION
 HORIZONTAL  PRODUCT  HORIZONTAL
INTEGRATION DEVELOPMENT DIVERSIFICATION
(Lynch, S. 2011)

22. Recommendations
Strategic Options Available to Cirque du Soleil
1) Market Penetration
2) Market Development
3) Product Development
4) Concentric Development
5) Joint Venture

23. Market Penetration
1) INTRODUCE AMBUSH MARKETING/VIRAL
ADVERTS. CIRQUE DU SOLEIL NEEDS TO
UTILIZE ONLINE MEDIA TO PROMOTE NEW
& EXISTING SHOWS.
2) EXPAND INTEREST IN CIRQUE DU SOLEIL
THROUGH SUBLIMINAL ADVERTISING.

24. Market Development
1) ABBA-THEMED SHOWS.
2) INNOVATION THROUGH CELEBRITY ICONS.

25. Product Development
1) GENERATE MORE INTEREST IN
MERCHANDISE E.G. DVDS
2) SEMINARS & MOTIVATIONAL SPEECHES

26. Concentric Development
1) UTILIZE TRAINING FACILITIES, ADOPTING
THEM TO SUIT THE PERFORMERS NEEDS &
IMPROVING THE ORGANISATION.

27. Joint Venture
1) WORK WITH EXTERNAL ORGANISATIONS.
2) DIVERSIFY.
3) CREATE SPORTSWEAR & SPORTS EQUIPMENT

28. Conclusion
Cirque du Soleil is a major player in the entertainment industry.
Although sensitive to certain factors such as increasing competition, it
is providing innovation through its best form, and delivering unique
performances to its consumer, at the same time as earning a profit.
It had a strong position in the market place, however with the
economic slowdown this is coming under threat. They need to be
aware of their upcoming competition from the Chinese State Circus.

29. Thank You
Merci Beacoup
Go Raith Maith Agat

30. “Great Minds Think Unlike”
Welcomes Any
Questions