Blue ocean strategy

1. BLUE OCEAN STRATEGY
CIRQUE DU SOLEIL

2. W.CHAN KIM, RENEE MAUBORGNE, BLUE OCEAN
STRATEGY (2006)
• A way to make the competition irrelevant by creating a
leap in value for both the company and its costumers
• An analogy to describe the wider, deeper potential of
market space that is not yet explored. Like the “blue”
ocean, it is vast, deep, powerful, in terms of profitable
growth, and infinite.

3. HTTPS://WWW.YOUTUBE.COM/WATCH?V=HJH0G-EPGDS
• Blue ocean strategy is based on over
decade-long study of more than 150
strategic moves spanning more than 30
industries over 100 years. The research of
W. Chan Kim and Renée Mauborgne
focused on discovering the common factors
that lead to the creation of blue oceans and
the key differences that separate those
winners from the mere survivors and those
adrift in the red ocean.

4. W.CHAN KIM, RENEE MAUBORGNE, BLUE OCEAN STRATEGY (2006)

5. WITH A BLUE OCEAN STRATEGY, THE FOCUS IS
ON THE FOLLOWING:
• Align the whole system of a firm’s activities with its strategic
choice of differentiation and low cost
• Create and capture new demand
• Eliminating factors that the industry takes for granted
• Reduce factors that are not necessary
• Raise factors that should be above industry standard
• Create new factors that the industry has never offered
W.CHAN KIM, RENEE MAUBORGNE, BLUE OCEAN
STRATEGY (2006)

7. • Founded 33 years ago, July 7,
1984
• Headquarters: Montreal, Quebec,
Canada
• Area served – Worldwide
• Revenue - $850 million
• Number of employees – 5,022
• Industry – Entertainment

8. • Cirque du Soleil took the world by storm.
It created a blue ocean of new market
space. Its blue ocean strategic move
challenged the conventions of the circus
industry. Cirque’s productions have been
seen by more than 150 million
spectators in more than 300 cities
around the world.

9. • In less than twenty years since its creation, Cirque du
Soleil achieved a level of revenues that took Ringling
Bros. and Barnum & Bailey—the once global champion of
the circus industry—more than one hundred years to
attain.

10. • What makes this rapid growth all
the more remarkable is that it was
not achieved in a declining industry
in which traditional strategic
analysis pointed to limited
potential for growth. Supplier
power on the part of star
performers was strong. So was
buyer power.

11. • Alternative forms of entertainment —ranging from various
kinds of urban live entertainment to sporting events to
home entertainment—cast an increasingly long shadow.
Children cried out for video games rather than a visit to
the travelling circus. Partially as a result, the industry was
suffering from steadily decreasing audiences and, in turn,
declining revenue and profits.

12. • There was also increasing sentiment
against the use of animals in circuses by
animal rights groups. Ringling Bros. and
Barnum & Bailey set the standard, and
competing smaller circuses essentially
followed with scaled-down versions.
From the perspective of competition-
based strategy, the circus industry
appeared unattractive.

13. • Another compelling aspect of Cirque du Soleil’s success is that it
did not win by taking customers from the already shrinking
circus industry, which historically catered to children. Instead it
created uncontested market space that made the competition
irrelevant. It appealed to a whole new group of customers: adults
and corporate clients prepared to pay a price several times as
great as traditional circuses for an unprecedented entertainment
experience. Significantly, one of the first Cirque productions was
titled “We Reinvent the Circus.”

14. • Cirque du Soleil succeeded because it realized that to win in
the future, companies must stop competing in red oceans.
Instead they should create blue oceans of uncontested market
space and make the competition irrelevant.

15. PRACTICAL WORK
• Analyze and contrast the traditional business model of the circus
industry and the new business model of Cirque du Soleil (pros and
cons of traditional circus and Cirque du Soleil)
• Discuss the Blue Ocean strategy in the context of Cirque du Soleil
• Think and mention other examples of companies/businesses
based on blue ocean strategy
• Discuss ideas of „blue oceans” you could start/open if you had
everything you need for it (money, technologies and so on). What
would it be? How would it work?

16. THANK YOU FOR ATTENTION AND
WORK!
Have a great day 