MMICC 2010 - USC

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  • Auckland slide
  • Auckland slide
  • Auckland slide
  • Auckland slide
  • Auckland slide
  • Auckland slide
  • Company Overview
  • Critical Success Factors
  • Reinforcing business model
  • Reinforcing business model
  • Auckland slide
  • Cirque du Soleil - as a proud sponsor of their North American touring shows, Wyndham can help provide access to unforgettable custom-designed events. Wyndham Worldwide (NYSE:WYN) today announced that it will be the official hospitality  partner for Cirque du Soleil touring shows Saltimbanco™, KOOZA™ and Corteo™ for the next two years, providing the company with the opportunity to market to more than three million Cirque du Soleil spectators.At the core of the partnership will be the Wyndham Hotels and Resorts presence at Cirque du Soleil events through displays, advertising, signs and verbal acknowledgement at the opening of each show as well as an opportunity to work with Cirque du Soleil for advertising and promotional development.  “Aligning Wyndham Hotels and Resorts with Cirque du Soleil is a natural fit,” said Peter Strebel, president of Wyndham Hotels and Resorts.  “Both companies are known for innovation, flexibility and a dazzling guest experience.  The partnership enables us to build upon our relationship with the frequently traveling Generation X customer.”
  • At the core of the partnership will be the Wyndham Hotels and Resorts presence at Cirque du Soleil events through displays, advertising, signs and verbal acknowledgement at the opening of each show as well as an opportunity to work with Cirque du Soleil for advertising and promotional development.  Cirque du Soleil - as a proud sponsor of their North American touring shows, Wyndham can help provide access to unforgettable custom-designed events. Wyndham Hotels and Resorts is celebrating the return of the winter adventure to Manhattan with a double discount: 30 percent off the regular ticket price of any Wintuk show and a special 15 percent discount when booking at its participating New York City hotels. Cirque du Soleil fans also can receive a 25 percent discount on regularly-priced tickets at select Wintuk shows without the purchase of a qualifying hotel room online at www.cirquedusoleil.com or through Ticketmaster.
  • Montreal, March 17, 2010 – Following the worldwide success of JUKARI Fit to Fly™ Cirque du Soleil & Reebok today launch JUKARI Fit to Flex™, the second innovative workout to come out of the ground-breaking partnership between the leading women’s fitness brand and the world renowned entertainment company. JUKARI Fit to Flex™ is a dynamic and effective workout that uses the musicality and vibrant colors of Cirque du Soleil to bring fitness to life and create a visual spectacle of strong shapes and flowing movements. JUKARI Fit to Flex™ launches first in Montreal, Canada the home of Cirque du Soleil and will rollout in gyms in the USA and Europe from April and in Asia and Latin America later this year.
  • Competitive challenges
  • MMICC 2010 - USC

    1. 1. Balancing Growth Implementing the 3C Strategy Shaun Sakhrani Sahil Tank Conquest Consulting Jenny Jao Joshua Wong
    2. 2. Value Proposition Overview Correct Change Create Implementation Maintaining sustainable long term growth by leveraging Objectives partnerships and exploring new ventures
    3. 3. Value Proposition Overview Correct Change Create Implementation Maintaining sustainable long term growth by leveraging Objectives partnerships and exploring new ventures Critical Issues Market Long Term Overextension Saturation Growth
    4. 4. Value Proposition Overview Correct Change Create Implementation Maintaining sustainable long term growth by leveraging Objectives partnerships and exploring new ventures Critical Issues Market Long Term Overextension Saturation Growth Solutions Reorganization Hybrid Strategy Hotel Market
    5. 5. Value Proposition Overview Correct Change Create Implementation Maintaining sustainable long term growth by leveraging Objectives partnerships and exploring new ventures The 3 C Strategy Critical Issues Market Long Term Overextension Saturation Growth Correct Solutions Reorganization Change Strategy Hybrid Hotel Market Create
    6. 6. Value Proposition Overview Correct Change Create Implementation Maintaining sustainable long term growth by leveraging Objectives partnerships and exploring new ventures Critical Issues Market Long Term Overextension Saturation Growth Correct Change Create Solutions (Reorganization) (Hybrid Strategy) (Hotel Market) Establish new revenue streams while enhancing current Value Added internal operations
    7. 7. Value Proposition Overview Correct Change Create Implementation Maintaining sustainable long term growth by leveraging Objectives partnerships and exploring new ventures Critical Issues Market Long Term Overextension Saturation Growth Correct Change Create Solutions (Reorganization) (Hybrid Strategy) (Hotel Market) Value Added NPV of $234 million
    8. 8. Company mission statement and target customer Overview Correct Change Create Implementation Mission Statement: Invoke, provoke and evoke the imagination, the senses and the emotions of people around the world. Typical Cirque Du Soleil Customer Highly Educated Higher Home Owner Traveler (College Degree) Income Upper middle class adults with discretionary income who regularly attend live artistic performances such as opera and ballet
    9. 9. Core Competencies Overview Correct Change Create Implementation Keys to Success Uncompromising Focus on Creativity and Quality “Show Before Business” Well Structured Contracts Exclusive and Original Experiences “Clowns, yes. Clones, no.” Strong Portfolio of Premium Partners
    10. 10. Reinforcing business model Overview Correct Change Create Implementation Creativity and Human Capital Partners Custom Productions Premium Prices Brand Equity And Facilities High End Unique Experience Clientele
    11. 11. Reinforcing the model through the 3 C`s Overview Correct Change Create Implementation Creativity and Human Capital Correct Partners Custom Productions Premium Prices Brand Equity Change And Facilities Create High End Unique Experience Clientele
    12. 12. Generating Increase Returns Overview Correct Change Create Implementation Correct Operational 1. Over- Efficiency extension Manage Costs 1. Residency Increase Shows 2. Touring Change Returns Big Top 2. Hybrid 3. Arena Model Drive Revenue 1. Hotel Other 2. Nightclub Create Channels 3. Spa 3. Hotel 4. Restaurant Partnership
    13. 13. Generating Increase Returns Overview Correct Change Create Implementation Correct Operational 1. Over- Efficiency extension Manage Costs 1. Residency Increase Show Venue 2. Touring Change Returns Big Top 2. Hybrid 3. Arena Model Drive Revenue 1. Hotel Other 2. Nightclub Create Channels 3. Spa 3. Hotel 4. Restaurant Partnership
    14. 14. Cirque du Soleil Faces Overextension Problems Overview Correct Change Create Implementation Issues Solution Overflowing with New Move Departments into Production Surrounding Offices in Montreal BUT Don’t want to outsource Need to Grow With Each Building will Focus Complexity of on 1 of 4 Main Divisions Maintain Centralized Business Model Keep Creative arm at Current HQ with Fear of Compromising Management Quality / Artistic Integrity
    15. 15. Cirque du Soleil Faces Overextension Problems Overview Correct Change Create Implementation Issues Solution Overflowing with New Move Departments into Production Surrounding Offices in Montreal BUT Don’t want to outsource Need to Grow With Each Building will Focus HQ Complexity of on 1 of 4 Main Divisions Maintain Centralized Business Model Keep Creative arm at Current HQ with Fear of Compromising Management Quality / Artistic Integrity
    16. 16. Generating Increase Returns Overview Correct Change Create Implementation Correct Operational 1. Over- Efficiency extension Manage Costs 1. Residency Increase Show Venue 2. Touring Change Returns Big Top 2. Hybrid 3. Arena Model Drive Revenue 1. Hotel Other 2. Nightclub Create Channels 3. Spa 3. Hotel 4. Restaurant Partnership
    17. 17. Saturated Vegas Market Overview Correct Change Create Implementation Treasure Island Aria The Mirage Bellagio MGM Grand New York- NY Luxor
    18. 18. Need to Expand Outside Vegas Overview Correct Change Create Implementation Key Takeaway Treasure Island Exclusive Contract with MGM 7 out of 7 Key Hotels Aria The Mirage 2 More Planned for Las Vegas Bellagio MGM Grand Need to Expand Elsewhere New York- NY Luxor
    19. 19. Expanding Into Developed Markets Overview Correct Change Create Implementation Facts Key Questions Facts Resident How to enter Mature Markets? • Benefit = Best Experience • No Casinos • Flaw = Limited Reach • Business model? • Partners? Touring • Benefit = Wide Reach / Low Cost • Flaw = Lower Quality, Short Run Implementation Solution Solution Smaller Venues on Rent Basis Hybrid Model • Lower Cost Geographically Staged Expansion • Higher Quality • Wider Reach
    20. 20. Entering Developed Markets Overview Correct Change Create Implementation Benefits Impact and Results Allow Entry into Mature Less Capital Intensive Entertainment Markets Brings Cirque Du Soleil to Quick Entry Customers No Need for Casino Partner Combine Best of Both Worlds Easy Exit Broaden Target Market Allow Successful Entrance into New Venues in Developed Markets
    21. 21. Potential Locations for Hybrid Shows Overview Correct Change Create Implementation
    22. 22. Top 50 Tourist Destinations Overview Correct Change Create Implementation Alice Springs Cairns Kuala Lumpur Montreal Rome Amsterdam Cairo Kyoto Munich Salzburg Athens Christchurch Las Vegas Naples San Francisco Auckland Costa del Sol Lisbon New York City Sydney Ayers Rock Dubai London Nice Tokyo Bangkok Dublin Los Angeles Oahu Vancouver Barcelona Edinburgh Madrid Orlando Venice Bayeux Florence Melbourne Paris Vienna Boston Franz Josef Miami Perth Washington DC Brisbane Geneva Milan Phoenix Zurich
    23. 23. Evaluation Criteria for Hybrid Implementation Overview Correct Change Create Implementation Evaluation Criteria for Hybrid Implementation GDP Per Capita Internet Penetration Rate Import / Export Percentage Income Per Capita Government Expenditures Price of Crude Oil GDP Real Growth Rate Cable Penetration Employment Rate Central Bank Discount Rate Discretionary Spending / Capita Literacy Rate Electricity Production Income Disparity Government Debt Electricity Consumption Government Influence Heath Insurance Coverage Oil Consumption Political Stability Life Expectancy Luxury Expenditure Taxation Fertility Rate Foreign Reserves Infrastructure Education Expenditures Inflation Rate Oil Production Industrial Production Growth
    24. 24. Macro Evaluation Criteria for Hybrid Implementation Overview Correct Change Create Implementation Macro Evaluation Criteria for Hybrid Implementation GDP Per Capita Internet Penetration Rate Import / Export Percentage Income Per Capita Government Expenditures Price of Crude Oil GDP Real Growth Rate Cable Penetration Employment Rate Central Bank Discount Rate Discretionary Spending / Capita Literacy Rate Electricity Production Income Disparity Government Debt Electricity Consumption Government Influence Heath Insurance Coverage Oil Consumption Political Stability Life Expectancy Luxury Expenditure Taxation Fertility Rate Foreign Reserves Infrastructure Education Expenditures Inflation Rate Oil Production Industrial Production Growth
    25. 25. Final Decision Criteria for Hybrid Implementation Overview Correct Change Create Implementation Final 4 Factors Entertainment Growth Tourism Growth Market Maturity Prevalence of Arts
    26. 26. Overview Correct Change Create Implementation Phase 1: Many Cultural Activities, Bustling Night Life Largest Percentage of Tourists 35-44 years old, followed by 45-54 years old 1 Sydney Overnight International Visitor Spends $101/night Bustling Night Life 2 Hong Kong Overnight Visitor Spends Approx $700 / Night Plethora of Cultural Activities 3 London Top 2 Tourist Locations Limited Space
    27. 27. Overview Correct Change Create Implementation Phase 1: Phase 2: 1 Sydney 1 Paris 2 Hong Kong 2 Berlin 3 London 3 Amsterdam
    28. 28. Overview Correct Change Create Implementation Phase 1: Phase 2: Phase 3: 1 Sydney 1 Paris 1 Moscow 2 Hong Kong 2 Berlin 2 Rio de Janeiro 3 London 3 Amsterdam 3 Dublin
    29. 29. Overview Correct Change Create Implementation Phase 1: Phase 2: Phase 3: Key Takeaway 2 Years of Development 1 Sydney 1 Paris 1 to 3 Shows Developed Per Year 1 Moscow 2 Hong Kong 2 Berlin 2 Rio de Janeiro Complete Expansion to 9 Locations In 3 to 6 Years 3 London 3 Amsterdam 3 Dublin
    30. 30. Generating Increase Returns Overview Correct Change Create Implementation Correct Operational 1. Over- Efficiency extension Manage Costs 1. Residency Increase Show Venue 2. Touring Change Returns Big Top 2. Hybrid 3. Arena Model Drive Revenue 1. Hotel Other 2. Nightclub Create Channels 3. Spa 3. Hotel 4. Restaurant Partnership
    31. 31. 4 Types of Expansion Overview Correct Change Create Implementation Restaurant Nightclub Spa Hotel
    32. 32. Evaluating Expansion Options Overview Correct Change Create Implementation Long Term Creative Social Sustainable ROI Challenge Responsibility Partnership Nightclub Restaurant Hotel Spa Poor Fit Strong Fit
    33. 33. Hotels Meet Criteria for New Development Overview Correct Change Create Implementation Long Term Creative Social Sustainable ROI Challenge Responsibility Partnership Nightclub Restaurant Hotel Spa Poor Fit Strong Fit
    34. 34. Why Hotels Overview Correct Change Create Implementation Sustainable, Long-Term Investment More Cross-marketing Opportunity High Risk, but Much Higher Return High Exposure to Target Demographic Hotel Leverage Established Partnership Spa
    35. 35. Why unsuccessful in the past Overview Correct Change Create Implementation Why Unsuccessful? Pre-Mature Market Brand Equity Was Not as Strong Wrong Approach
    36. 36. How to become successful in the future Overview Correct Change Create Implementation How to Become Why Unsuccessful? Successful? Adhere to Core Pre-Mature Market Competency Brand Equity Was Choose Right Not as Strong Partner Wrong Approach Staged Entrance
    37. 37. Details for hotel implementation Overview Correct Change Create Implementation Division of Strengths 25% 75% Cirque du Soleil • Design • Production Hotel Chain by • Construction • Management Deal Structure Average Hotel Occupancy: 75% Cirque du Soleil Target: 25%
    38. 38. Implementation Overview Correct Change Create Implementation Implementation Floor Plan •Establish Main Hotel Lobby Cirque Du Soleil Elevators • Cirque du Soleil Experience with Restaurant Separate Entrance Security Main Lobby Notable Examples Front Desk Main Elevators •Venetian  Venezia •Wynn •Mandalay Bay
    39. 39. Example of floor plan Overview Correct Change Create Implementation Floor Plan Cirque Du Soleil Lobby Restaurant Check-in Main Lobby Front Desk Main Elevators
    40. 40. Options for strategic partners Overview Correct Change Create Implementation 4 Criteria For Choosing Partners Cultural Flexibility in Access to Luxury Brand Similarities Negotiation Capital Potential Partners Hotels PE/VC
    41. 41. Seeking partners Overview Correct Change Create Implementation Why partner with hotel chain Why partner with us Provide a Complete Cirque Du Soleil Experience Innovative idea Over 3MM spectaculars annually Leverage Brand Image of Hotel Chain Increased Occupancy Rate via Bundling Increase Accessibility to Audience Luxury Brand Image Relatively Lower Risk Expansion Successful Track Record in Show Strategy Performances Almost Successful in Entering Market Mature Market with Viable Entertainment Options Why London Low Wealth Disparity Focus on Arts and Cultural Experiences High Flow of Tourism
    42. 42. Timeline Overview Correct Change Create Implementation 2010 2011 2012 2013 Correct: HQ Expansion Secure Leasing Agreements Move Change: Hybrid Model Concept Development Lease Negotiation Launch Show Create: Hotel Concept Find Partners Enter Negotiations Develop and Plan Financing Construction Launch
    43. 43. Timeline Overview Correct Change Create Implementation 2013 2014 2015 2016 2017 Correct: HQ Expansion Secure Leasing Agreements Move Change: Hybrid Model Concept Development Lease Negotiation Launch Show Create: Hotel Concept Find Partners Enter Negotiations Break Even Point: 2017 Develop and Plan Financing Construction Launch
    44. 44. Financial Assumptions Overview Correct Change Create Implementation Correct Change Create 4 offices Staged Joint division surrounding release per of cost at Assumptions HQ year 50/50 Initial Capex Revenue Renting of $25 M per Sharing at city 70/30 25% Op. Income Cost of $4 M Premium of $15 M per per year 75% year Occupancy
    45. 45. NPV Overview Correct Change Create Implementation Correct Change Create Net Present Value with 4 offices Sensitivity Staged Joint division surrounding release per of cost at Assumptions HQ year 50/50 $165 million $234 million $337 million Initial Capex Revenue Renting of $25 M per Sharing at city 70/30 25% Op. Income Cost of $4 M Premium of $15 M per per year 75% year Occupancy
    46. 46. Value Proposition Overview Correct Change Create Implementation Maintaining sustainable long term growth by leveraging Objectives partnerships and exploring new ventures Critical Issues Market Long Term Overextension Saturation Growth Correct Change Create Solutions (Reorganization) (Hybrid Strategy) (Hotel Market) Value Added NPV of $234 million
    47. 47. Balancing Growth Implementing the 3 C Strategy Shaun Sakhrani Sahil Tank Conquest Consulting Jenny Jao Joshua Wong
    48. 48. Outline Appendix Value Proposition Timeline Methods of Financing Target Customer Financials Entertainment Options Core Competencies Assumptions in London Business Model NPV Not Cruise Ships Decision Tree Appendix Not emerging markets Correct Strategy Risk, Mitigation, Contingency in South East Asia New Markets Wyndham Partnership Not Casino’s Benefits & Results Custom designed events Competitive Landscape Top 50 cities Not Restaurants Not Paris Criteria Not Night Club Berlin Final 4 Factors Not Spa Sydney 3 Phases Planned Expansion Create Strategy 3D Movies? Evaluation Not Amusement Parks Why hotels Reebok Why unsuccessful Current Partnerships Details Not Arenas Implementation Ideas for New Shows
    49. 49. Appendix 2007 Partnership: Official Hospitality Partner for Touring Shows (Saltimbanco, Kooza, Corteo) Alignment of Brands | Innovation | Flexibility | Dazzling Guest Experience| Cross Marketing Over 3 million Cirque du Soleil Spectators
    50. 50. Appendix Access to Unforgettable Custom-Designed Events Current Marketing Mix Additional Marketing Channels VIP Ticket Packages •Drinks Displays Word of Mouth •Special Entrance •Meet Cast Cirque Du Soleil Party 30% 15% •Main Ballroom Transformed to fit Discounted Discounted Cirque Du Soleil Theme Show Tickets Booking Rates •Performer Present at Event Higher Occupancy Rate
    51. 51. Why Not Restaurants Appendix Difficult to Incorporate Dinning and Performance Arts Experiences Restaurant Nightclub Expensive to Scale High Risk Average Failure Rate: 70% within 10 years Spa Hotel Source: “Why New Restaurants Fail”
    52. 52. Why Not Night Clubs Appendix Short-term Success because of Nature of the Industry Average Lifespan of Nightclub: 2-3 Years Nightclub Source: The Journal Record
    53. 53. Why Not Spas Appendix Spa Ambience Conflicts with Energy of Cirque du Soleil Low ROI Spa Hotel
    54. 54. Existing Residence Locations Appendix
    55. 55. Planned Expansion Appendix 2010 2011 2012 March 2010 April 2010 Banana Shpeel Cirque 2010 Residence Touring Beacon Theater, New York Montreal, Quebec, and Toronto before Heading to Europe Spring and Summer 2010 Seasonal Touring Show Radio City Music Hall, New York and London or Paris
    56. 56. Planned Expansion Appendix 2010 2011 2012 Kodak Theatre, Los Angeles Residency Show Scheduled for 10 years Movie Theme
    57. 57. Planned Expansion Appendix 2010 2011 2012 Dubai, UAE Residency Show Palm Jumeirah. Dubai Scheduled 15 Year Partnership with Nakheel
    58. 58. Appendix: Why 3D Movies? Appendix Pros Cons Low Cost Inconsistent with Focus on Exclusivity Build Brand in Cities Without A Show Target Audience Expect Live Entertainment, not Digital Experience Embracing New Technology Unique Premium Experience Lack Demand
    59. 59. Appendix: Why not Amusement Parks? Appendix Reasoning Different Target Market in Income Levels Dilute High-End Image Top Theme Park Groups 1. Walt Disney Parks 118 MM 2. Merlin Entertainment  35MM No Other Amusement Park With 3. Universal Studio  25.7MM Premium Brand Image Like Disney 4. Six Flags 25.3MM Source: TEA/ERA Theme Park Attendance Report 2008
    60. 60. Jukari Appendix Partner: Reebok Venture: Innovative Workout with the Music and Colors of Cirque du Soleil Implementation: April 2010 USA and Europe Late 2010 Asia and Latin America
    61. 61. Appendix: Current Partnerships Appendix Global Partnerships Regional Partnerships Commercials Automotive Provider France Preferred Tickets Upgrade / Discounts Exclusive Video Content Japan Operations
    62. 62. Appendix: Why Not Arenas? Appendix Arena Brand Dilution •Lower Ticket Prices Undercut Perception Premium Show Touring More Growth Opportunity in Hybrid Model Important Part of Current Strategy Diversify Access Points Less Central to Brand Identity Already Aggressively Expanding with New Shows
    63. 63. Appendix: Ideas for New Shows Appendix Cultural Themes Bollywood Japanese Samurai Era Mardi Gra Pop Culture
    64. 64. Appendix: Sponsored Events Appendix Purpose Description • Corporate Events Hire Cirque du Soleil • Large Scaled performers Parties
    65. 65. Appendix: Methods of Funding Appendix Financing Equity Debt Company Unable to Make Cheaper Option Interest Payments Company has Strong Asset More Expensive Base Able to Make Interest Company Can Issue Shares Payments
    66. 66. Appendix: Entertainment Options In London Appendix Evening Entertainment Theatre Play Live Music Movie Theatre
    67. 67. Appendix: Why Not Cruise Ships? Appendix Stage Limitations Less Marketing Limited Audience Opportunity Low Return
    68. 68. Appendix: Why Not EM SE Asia? Appendix Guangzhou, China | Bangkok, Thailand | Ho Chi Minh, Vietnam Bangkok, Thailand Pros Cons • High Tourist Growth • Political instability •Most Tourist Age Demographic •Tourists Expect Relaxing, Local Consistent with Cirque audience Culture Experience Different from Cirque Experience •Most Tourists Aare Domestic who Spend Less Than $30/Day
    69. 69. Appendix: Why Not Casino-Like Areas? Appendix Atlantic City Lack Large Audience 11 Casinos in Total Base High-End Shows Lack High-End Perform on Brand Loyalty Temporary Basis
    70. 70. Why Not Paris, Berlin, Sydney? Appendix Paris Berlin Sydney Have Touring Shows Not a Major Tourist Not a Major Tourist Never Entered with Attraction Attraction Resident Show Before
    71. 71. Competition Overview Correct Change Create Implementation No Direct Competitors in Acrobatics, but Substitutes in Other Live Forms of Entertainment Exist Concerts Plays Amusement Parks Live Performances
    72. 72. Overview Correct Change Create Implementation Risk Mitigation Contingency Cannot secure office Must look further away Decrease growth rate space from HQ Hybrid model is not Scale down production Revert to touring or profitable and performances arena model Approach other luxury W refuses to partner More flexibility in and contemporary- with Cirque negotation themed hotels Hotel construction Careful planning and Switch construction delays execution companies

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