1. CIRQUE DU SOLEIL
CASE ANALYSIS
Cotrugli Business School – MBA
Team 6:
Nino Beneta
Srećko Butorac
Sven Stjepan Novak
Jadranka Šarić
Sanja Šijanec
Margarita Zlatkova
2. CIRQUE DU SOLEIL FACTSHEET
PAST PRESENT (2001)
o 100% owned by Laliberte (bought
Gautier’s half in 1987)
o Founding Year 1984
o Lalibertè refusing to go public,
o Founded by group of street performers reasoning that it would constrain
Cirque’s creative freedom
o Montreal based
o Montreal based (had tried with
o Managed equally by two owners: three regional divisions, NA, Europe,
Guy Lalibertè (Creative) Asia)
Daniel Gautier (business and finance)
o 2.100 employees, over 500 artists,
over 40 nationalities and over 25
o 73 employees spoken languages
o Touring 1 show at a time, initial 3 years o 8 simultaneous Cirque productions
only in Canada running on 4 continents
o On average 270.000 spectators per year o 6 million spectators in 2001
3. PRODUCT
“We’re not a product company, we’re an artistic works company”
– Mario D’Amico – Executive VP Marketing
o Circus combining street performers, clowns, acrobats and gymnasts (no animals).
Latin sounding music that transcends cultural boundaries and top scale
production and lighting.
o Price targeting upper middle class families (Avg. North American ticket price @
55 $)
o Diversified commercial activity towards multimedia, publishing and
merchandising.
o 1998 Cirque opened it’s 1st merchandise store in Wald Disney Resort in Florida
o 1999 Cirque du Soleil Images released it’s 1st film “Alegria”
o 2003 planning to open entertainment complex in Montreal
4. SWOT
STRENGTH WEAKNESSES
o innovative, unique show o high overheads and management costs
o diversified product portfolio – movies, o sole owner and decision maker
TV shows, merchandise o a business model that could be easily
o flexible working force, devoted artists copied
o established brand name o a lot injuries that need to be prevented
o well organized logistic o high staff turnover
OPPORTUNITIES THREATS
o expand to larger number of cities o real competition that could enter the
o diversification of the product portfolio market
which could fit to different audiences o to become too commercial and loose its
o increase number of impermanent spirit
location based shows o overdependence on the existing owner
o economic downturn will lead to customers
choosing lower cost substitutes
5. PORTER’S FIVE ANALYSIS
Threat of substitute products-HIGH Barriers to Entry – LOW
Conventional circus-animals,clowns,etc
Low cost substitutes-movies,TV, internet Low to moderate entry barriers
Other substitutes-theatres,concerts, cinema Low to moderate costs of equipment
In economic downturn customers-choose low Moderate initial employee costs
cost entertainment
Bargaining Power of Customers – VERY Bargaining Power of Suppliers – LOW
HIGH
High number of suppliers for technical
Product is highly differentiated/unique
equipment and logistics
The service of Cirque du Soleil is difficult to
Limited number of suppliers for tents and
be directly replaced
scenes
Not a product satisfying basic needs;
Relatively low supplier switching costs
“luxury good”
Competitive Rivalry – MODERATE
Few competitors like Cirque Oz compete
locally
Lots of circuses globally
6. PESTEL ANALYSIS
• Tax issues
POLITICAL • Stability
• Energy efficiency
ECONOMICAL • Global crisis – reduced purchasing power
• Limited number of touring cities
• Cultural entertainment preferences
SOCIAL • Religios views
• Demographic chart
•Influence of web based free contents
TECHNOLOGICAL •Automatization of production leading to lower costs
•Higher CAPEX due to short lifecycles of new technologies
ENVIRONMENTAL
• Strict local logistics regulation (eg CO2 emmision)
LEGISLATION •Working permits
•Visa policy
7. VALUE CHAIN
Support activities:
Logistics and infrastructure
Artist recruitment (HR)
Procurement (own and outsourced)
SHOW LOGISTIC ON
MARKETING
SITE
SALES SHOW
PRODUCTION
Primary activities:
9. NEGATIVE CONSEQUENCE
o Cirque du Soleil saturated the market – they will stagnate or
lower the business
o If Mr. Lalibertè doesn’t decrease his influence (autochratic
leadership) it will not be possible to sustain growth level CDS
has shown in the past
10. ALTERNATIVES
Expand geographically
• Find new audiences – go to new places
• Find places with high inflow of tourists for fixed location shows
Continue diversifying commercial activities
• Movies, amusement parks, music, commercial goods
Regional approach – market adjustment
To fit to diverse conditions in current markets
11. DECISION MAKING CRITERIA
Alternative 1 Alternative 2 Alternative 3
CRITERIA Weight Strength Weighted Strength Weighted Strength Weighted
(1-10) Rating Score Rating Score Rating Score
Growth 10 4 40 4 40 3 30
opportunity
Cost influence 8 1 8 2 16 4 32
Ease of 6 3 18 1 6 2 12
implementation
Opportunity of 4 1 4 4 16 3 12
innovation
TOTAL 70 78 86
13. ACTION PLAN
decentralize the decision making (by CEO/owner)
set up regional divisions with separate marketing and
market research (economical, demographical, etc.) by
regional management/consultancy
define diverse strategic approaches (e.g. pricing policy,
level of show production)
