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MMICC 2010 - 2nd Place - HKU

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MMICC 2010 - 2nd Place - HKU

  1. 1. CIRQUE DU SOLEILA Growth Capturing Strategy<br />Team 6 – HKUST<br />Alex Wong | Jasmine Ling | UlaXue | Vivien Yip<br />
  2. 2. Agenda<br />Situational Analysis<br />Market Analysis<br />Recommendations<br />Financials<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  3. 3. Strengths<br /><ul><li> Brand name: 15 shows with more than 70M tickets sold
  4. 4. Creativity: Established structured creation process</li></ul>Weaknesses<br />Opportunities<br />Threats<br />Situational Analysis<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  5. 5. Weaknesses<br /><ul><li>Lack of diversification:</li></ul>Las Vegas Resident shows for 50+% total revenue and much great portion of profit<br />Strengths<br />Opportunities<br />Threats<br />Situational Analysis<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  6. 6. Weaknesses<br />Strengths<br /><ul><li> Saturated market in North America:</li></ul>US tourism industry growth rate: -5%<br />Opportunities<br />Threats<br />Situational Analysis<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  7. 7. Strengths<br />Weaknesses<br /><ul><li> Expand into emerging </li></ul>markets in Asia<br /><ul><li>Expand the creative platform and leverage on brand name</li></ul>Threats<br />Opportunities<br />Situational Analysis<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  8. 8. Strengths<br />Weaknesses<br />Heavy reliance on Les Vegas shows<br />Brand name <br />Creativity<br />Emerging markets<br />Expand the creative platform<br />Saturated market in North America<br />Opportunities<br />Threats<br />Situational Analysis<br />Need for Diversification<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  9. 9. Affluent Population <br />Discretionary spending of affluent population in the three biggest cities in China: Reach 4.9 billion USD in 2015 <br />Economy Growth<br /> GDP growth (AP GDP growth of 7% in 2010 vs. 2.7% globally, China average 10% growth)<br />Potential for Asia Markets<br />2010 tourism industry estimates: Asia rise 4%, North America -5%, Europe unchanged (by IPK international)<br />Rising Tourism Industry<br />Lack of sound brand of entertainment show troupes<br />Market Not Mature<br />Situational Analysis | Market Analysis| Recommendations | Financials<br />
  10. 10. Affinity to Popular Culture<br />Government Lead<br />Spending <br />Pattern<br />Asian Market Analysis<br />On average, a tourist will stay in Macau for 1.23 days<br />Separation of Gambling and Entertainment<br />Situational Analysis | Market Analysis| Recommendations | Financials<br />
  11. 11. Spending <br />Pattern<br />Affinity to Popular Culture<br />Asian Market Analysis<br />Government Lead<br />China World Expo in Shanghai<br />Singapore government actively called for bids for the two casino resorts<br />HK government`s involvement in HK Disneyland<br />Thai government boosted the “Amazing Thailand, Amazing Concept” value, with exemption of visa fees and reduced takeoff and landing fees<br />Situational Analysis | Market Analysis| Recommendations | Financials<br />
  12. 12. Government Lead<br />Spending <br />Pattern<br />Asian Market Analysis<br />Affinity to Popular Culture<br />Disneyland, Universal Studio, Hollywood movies and Western-style entertainment diffused in Asia<br />New popular trends often emerge and spread over<br />Situational Analysis | Market Analysis| Recommendations | Financials<br />
  13. 13. Asian Market Analysis<br />Affinity to Popular Culture<br />Government Lead<br />Spending <br />Pattern<br />Leverage on popularity of Western culture<br />Cooperate with government to gain support and backup<br />Rethinking partnership in Asia<br />Casinos may not be the best<br />Situational Analysis | Market Analysis| Recommendations | Financials<br />
  14. 14. Touring Shows<br />Expand footprint in Asia<br />Limited Runs<br />Resident Shows<br />Branding and recognition<br />Resort in Shanghai<br />Recommendations<br />Asia<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  15. 15. Staged Performance in Asia<br />Asian Markets<br />Cirque du Soleil<br /><ul><li> Still immature and not well established
  16. 16. Popularity among customers to be improved
  17. 17. Root and core competence
  18. 18. International reputation and experience</li></ul>Enable Diversification<br />Brand Building and Creating Markets<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  19. 19. Touring Shows<br />Existing Schedule<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  20. 20. Touring Shows<br />Start and extend the tour in Asia<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  21. 21. Limited-Run Shows<br /><ul><li>Shorter show time: 1.5 hours
  22. 22. Mix of creativity and legacy
  23. 23. Revamp or extract the most exciting components from previous successful shows
  24. 24. Innovation on storylines
  25. 25. New use of existing costumes and props
  26. 26. Strong marketing and PR efforts
  27. 27. Relate to CSR or festive events</li></ul>Situational Analysis | Market Analysis | Recommendations | Financials<br />
  28. 28. Limited-Run Shows<br />Drawing attention<br />Create scarcity<br />Creative challenge<br />Gone-is-gone<br />Mix-and-match<br />Marketing and PR<br />Impacts<br />Limited-run Shows<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  29. 29. Resident Shows<br />7 shows in Las Vegas<br />Only at Macao and Tokyo in Asia<br />Room for further growth<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  30. 30. Expansion into Asia<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  31. 31. Comprehensive Experience: Resort<br />Cirque du Soleil<br />Property Developer<br />Government<br /> Artistic conceptprovider and stage performer<br />Promotion, land and infrastructure support<br />Shopping malls, hotel, theatre, restaurant, spa, and entertainment facilities<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  32. 32. Strategic Advantages of Shanghai<br />Complexes Failure in London<br />No such obstacles in Shanghai<br /><ul><li>Government support
  33. 33. Industry preference for upscale projects
  34. 34. High expected demand</li></ul>Lack of creative control<br />Slow project development<br />Aggressive scale<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  35. 35. Strategic Advantages of Shanghai<br />Local government<br />Economic indicators matter<br />Prefer land use for tourism<br />Real estate developers<br />Face restrictions by central government<br />Switch from residential projects to resort<br />Expected demand<br />Shanghai: Important tourist destination<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  36. 36. Cirque du Soleil and Resort<br />Wholly responsible for art design and creative content<br />Instil Cirque du Soleil feeling into every point of contact with customers<br />Hardware: Interior design, decorations, beds, costumes<br />Software: Interactions and atmosphere<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  37. 37. Cirque du Soleil<br />Government and Developer<br />Partnership Deal Structure<br />Show<br />100% (Property Construction)<br />(Property Construction)<br />-<br />(Production)<br />50% (Production)<br />50% (Production)<br />(Capital Investment)<br />50% Box Office<br />50% Box Office<br />Box Office<br />(Creative Royalty)<br />100% Creative Royalty<br />-<br />(Theatre Operations)<br />50% (Theatre Operations)<br />50% (Theatre Operations)<br />(Show Operations)<br />50% (Show Operations)<br />50% (Show Operations)<br />Other Resort Revenue<br />3% Resort Revenue<br />97% Resort Revenue<br />Operating Profit<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  38. 38. Timeline for Resort Partnership<br />Year<br />09 <br />10<br />11<br />16<br />12<br />13<br />14<br />15<br />Issues<br />Negotiation<br />Design and Construction<br />Show production<br />First Phase performance<br />Review<br />2ndPhase Performance<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  39. 39. Revenue<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  40. 40. Profit<br />USD Million<br />Situational Analysis | Market Analysis | Recommendations | Financials<br />
  41. 41. Situations<br /> Markets<br /> Strategy<br />Impact<br />Asian markets with most opportunities<br />Different business landscape<br />Creativity and brands<br />Over-reliance on Las Vegas<br />Uncertain US tourism outlook<br />Potential of emerging markets<br />Touring shows into Asia<br />Limited-run shows to stir up markets<br />Resort collaboration<br />New revenue sources<br />Operations diversification<br />Tap the potential in Asia<br />New inspirations for creativity<br />
  42. 42. Backup Slides<br />
  43. 43. Touring Shows<br />
  44. 44. Resident Shows<br />
  45. 45. All Shows<br />
  46. 46. Resorts World Sentosa<br /><ul><li>Built by Malay’s GentingBhd for $4.4 billion opening on March 2010
  47. 47. The 49 hectare integrated resort will cost S$600 million solely for land
  48. 48. S$1.6 billion on Southeast Asia’s first Universal Studio theme park called Universal Studios Singapore.</li></li></ul><li>Marina Bay Sands Casino<br />Opening: Apr 2010<br />By Las Vegas Sands<br />Fixed $1.2 billion cost of 6m sq. Feet, The most expensive casino in the world<br />Three hotel towers with 2,500 rooms (>52,000 people)<br />
  49. 49. Singapore Casino<br />Visitor arrivals in Singapore rose 24% in February from 2009 since its first casino opening<br />Hotel occupancy rose 4.9<br />Each casino expected to contribute 0.5% to Singapore’s GDP by 2015<br />
  50. 50. Asian Markets<br /><ul><li>Economic growth</li></ul>2010<br /><ul><li>Asia: 7%
  51. 51. China: 10%
  52. 52. Global: 2.7%
  53. 53. Affluent population</li></ul>Source: AllianceBernstein<br />
  54. 54. Shanghai<br />Rapid development and active brand building<br />Financial center and tourist hub in Asia<br />Welcome foreign investment<br />World Expo 2010<br />
  55. 55. Affluent Population in Shanghai<br />Defined as earning US$6,000 to US$25,000 per year, numbers grew from practically zero over a decade ago to estimated 87 million in 2005; 317 million in 2015<br />
  56. 56. Resort Partnership<br />Upscale Property Developers in China<br />With experience in running shopping malls, hotels and entertainment facilities<br />
  57. 57. Financial Details<br />
  58. 58. Financial Details<br />
  59. 59. Financial Details<br />
  60. 60. Financial Details<br />

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