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Cirque du Soleil Business Proposal

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A Cirque du Soleil Business Strategy Proposal

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Cirque du Soleil Business Proposal

  1. 1. Welcomes You
  2. 2. Consultancy Team Members Alan Diamond Project ManagerRóisín O’Malley Group Strategic DirectorNiall O’Sullivan Industry AnalystSarah May Clarke Innovation Director Susan Vickers Research Analyst
  3. 3. Profile of Think Tank Think Tank is a strategic marketing, branding & innovation consultancy that thinks differently to helpclients build transformationaladvantage & create new profit opportunities .
  4. 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. 5. Analysis Breakdown External Internal Environment Environment 1) PESTEL Analysis 1) Strategic Capabilities2) Porters Five Forces 2) Value Chain Analysis3) Strategic Grouping 3) Benchmarking TOWS Analysis
  6. 6. PESTEL AnalysisPolitical Factors Economic Factors Social Factors 1. Demographics1. Government 1. Recession Parties 2. Trends 2. Unemployment2. Terrorism 3. Leisure 3. Exchange Rates3. Education 4. Living 4. Inflation4. The Euro Standards5. EU 5. National Income 5. Language Enlargement Barriers
  7. 7. PESTEL Analysis Technology Environmental Legal Factors Factors Factors 1. Noise & Air 1. Employment1. Ticket Distribution Pollution Law2. Sound & Audio Engineering 2. Energy 2. Product Safety Consumption3. Advertising & 3. Health & Safety Marketing 3. Traffic 4. Taxation4. Innovation Congestion 5. Competition5. Rate of Technology 4. Waste Disposal Obsolescence Law 5. Global Warming
  8. 8. Porters Five Forces Slim Potential Entry Possibility of New Entry Threats Consumers Cirque du SoleilSuppliers Vs. Buyers The Chinese State Circus1) Raw Materials 1) Online Distribution2) Logistics Substitutes 2) No Brand Loyalty3) Labour4) Finance Chinese State Circus, Broadway, The West End
  9. 9. Porter’s Five Forces Summary Competitive Barriers to Power of Power of Threat of Rivalry Entry Suppliers Buyers Substitutes1. Competitor 1. Some 1. Concentrated 1. No Brand 1. No Brand Balance Barriers to Suppliers Loyalty Loyalty2. Industry Entry 2. High 2. Low 2. No Close Growth Rate 2. High Cost Switching Switching Consumer3. High Fixed Based Costs Cost Relationship Costs 3. High 3. Buyer 3. Price4. Low Capital Competition 4. No Differentiation Investment Threat Switching 4. Distribution Costs for Channel Consumer Ownership 5. Price
  10. 10. Strategic Group Analysis HIGHPRICE LOW NARROW BROAD GLOBAL PRESENCE
  11. 11. Potential Strategic Group HIGHPRICE LOW NARROW BROAD GLOBAL PRESENCE
  12. 12. Strategic Capabilities Resources CompetencesTHRESHOLD THRESHOLDCAPABILITIES RESOURCES THRESHOLD •TANGIBLE COMPETENCES •INTANGIBLECAPABILITIES UNIQUE FOR RESOURCES CORECOMPETITIVE •TANGIBLE COMPETENCES ADVANTAGE •INTANGIBLE (Johnson, G, et al 2008)
  13. 13. ResourcesThreshold UniqueResources Resources Tangible Tangible1) Financial 1) Human Resources 2) Physical Intangible Intangible1) Technology 1) Culture & Knowledge
  14. 14. What is Cirque du Soleil’s Core Competence? Everything Matters! Reputation InnovationCirque du Soleil has achieved a Blue-OceanStrategy. Its competitive advantage comes from its reputation which is hard to emulate.
  15. 15. Value ChainINFRASTRUCTURE SUPPORT ACTIVITIES ADVANCED CORPORATE HEADQUARTERS HUMAN RESOURCE MANAGEMENTHIGH COST TRAINING EXTENSIVE EMPLOYEES MANAGEMENT CONTROL IN-HOUSE TECHNOLOGY DEVELOPMENTHIGH TECHNOLOGY INTERNET INTERNET INFORMATION PROFIT MARGINS PROCEDURESTANDARDIZING 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. 16. Cirque du Soleil’s Value SystemSUPPLIERS 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. 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. 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. 19. TOWS Matrix STRENGTHS (S) WEAKNESSES (W) SO STRATEGIC OPTION WO STRATEGIC OPTION USE THE FIRMS IMPROVING INTERNALOPPORTUNITIES (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. 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. 21. Strategic Options VERTICAL / HORIZONTAL INTENSIVE DIVERSIFICATIO DEFENSIVE INTEGRATION STRATEGIES N STRATEGIES STRATEGIES STRATEGIES FORWARD  MARKET  CONCENTRIC  JOINT VENTUREINTEGRATION PENETRATION DIVERSIFICATION  RETRENCHMENT BACKWARD  MARKET  CONGLOMERATE  DIVESTITUREINTEGRATION DEVELOPMENT DIVERSIFICATION  LIQUIDATION HORIZONTAL  PRODUCT  HORIZONTALINTEGRATION DEVELOPMENT DIVERSIFICATION (Lynch, S. 2011)
  22. 22. RecommendationsStrategic Options Available to Cirque du Soleil 1) Market Penetration 2) Market Development 3) Product Development 4) Concentric Development 5) Joint Venture
  23. 23. Market Penetration1) INTRODUCE AMBUSH MARKETING/VIRAL ADVERTS. CIRQUE DU SOLEIL NEEDS TOUTILIZE ONLINE MEDIA TO PROMOTE NEW & EXISTING SHOWS.2) EXPAND INTEREST IN CIRQUE DU SOLEIL THROUGH SUBLIMINAL ADVERTISING.
  24. 24. Market Development 1) ABBA-THEMED SHOWS.2) INNOVATION THROUGH CELEBRITY ICONS.
  25. 25. Product Development 1) GENERATE MORE INTEREST IN MERCHANDISE E.G. DVDS2) SEMINARS & MOTIVATIONAL SPEECHES
  26. 26. Concentric Development1) UTILIZE TRAINING FACILITIES, ADOPTING THEM TO SUIT THE PERFORMERS NEEDS & IMPROVING THE ORGANISATION.
  27. 27. Joint Venture 1) WORK WITH EXTERNAL ORGANISATIONS. 2) DIVERSIFY.3) CREATE SPORTSWEAR & SPORTS EQUIPMENT
  28. 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. 29. Thank You Merci BeacoupGo Raith Maith Agat
  30. 30. “Great Minds Think Unlike” Welcomes Any Questions

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