Cirque du Soleil's Strategy to Expand into Cruise Industry
•Download as PPTX, PDF•
1 like•2,010 views
Recommended
More Related Content
Viewers also liked
Viewers also liked (20)
Similar to Cirque du Soleil's Strategy to Expand into Cruise Industry
Similar to Cirque du Soleil's Strategy to Expand into Cruise Industry (20)
More from McGill Management International Case Competition
More from McGill Management International Case Competition (16)
Cirque du Soleil's Strategy to Expand into Cruise Industry
- 1. Team 4 – Copenhagen Business School: A. Bruntse, L. Lawaetz, L. Pedersen, S. Troll
- 2. Cirque du Soleil needs to ANALYZE, NEGOTIATE, EXPAND
- 4. Negotiate
- 5. ExpandTimeline Risks Financial Impact
- 6. Cirque du Soleil differentiates through uniqueness and brand High Uniqueness High Low Brand Awareness
- 7. Unexploited potential for residence shows in Europe 1 NY show 1 Tokyo show 1 FL show 2 Macau show 7 Vegas shows 1 Dubai show Resident show Touring show
- 8. Three pronged strategy: Analyze, Negotiate, Expand
- 9. Cruising industry has high revenue and sustainable partnership potential Best Worst Slide 7 Team McGill
- 10. Cruise industry is booming despite financial crisis Source: http://www.cruisemarketwatch.com
- 11. Cirque du Soleil @ Sea merges resident and touring Touring Resident Cirque du Soleil @ Sea
- 12. Royal Caribbean is the best partner
- 13. Three pronged strategy: Analyze, Negotiate, Expand
- 15. Sustainable in long run
- 17. Socially responsible partner
- 19. Revenue growth
- 23. Package deals (Cruise + Show)Security check Security check Source: Royal Caribbean
- 24. Introduction of Cruises to the Mediterranean sea 2011 2013
- 25. Three pronged strategy: Analyze, Negotiate, Expand
- 26. Promising platform for future expansion Industry development Financial criteria per ship added Total cruise industry growth (2009-2013): 17% Royal Caribbean fleet growth: Four ships launched by 2012 Capacity increase of 13,950 (approx. 3500 passengers/ship) Source: Royal Caribbean 10K
- 27. By 2014, Cirque du Soleil will have two ships operating Analyze Negotiate Expand Negotiate RC deal Expand deal agreement Analyze partner opportunities Negotiate target routes Develop more shows Get in touch with Royal Caribbean Develop content for 2h show 2010 2011 2012 2013 2014 Analyze Negotiate Expand
- 28. Reduction of operating risks with new strategy Risks How to meet the risks Set up new sustainable partnerships Expand to new markets Loose creative control Las Vegas deal structure Good offer to Royal Caribbean Cannibalism Go to other markets than North America Overall risk Dillusion of brand value High end partner High class show Keeping price scheme
- 30. Promotion of the Royal Caribbean
- 31. High-end people coming to the ship
- 32. Royal Caribbean will get a competitive advantage
- 33. NPV positive projectSource: MGM in material
- 37. Higher presence in Europe
- 39. Production of 2 new shows
- 40. Marketing
- 41. Operational cost
- 44. WACC=12%
- 45. Cases derived from growth rate
- 46. Avg. ticket price of 120$
- 47. 9.3 Shows a week
- 48. 48 running weeks a year
- 49. Show runs for 10 years
- 50. Increased merchandise sales
- 51. Yearly profit growth by 9%
- 52. 37% growth by 2015Assumptions Benefits
- 54. Avg. Spending 30$ per customer
- 55. 25% EBIT margin on additional salesAssumptions
- 56. Cirque du Soleil needs to ANALYZE, NEGOTIATE, EXPAND
- 57. Q&A
- 59. Growth rate of 12% a year
- 60. Growth ends at occupancy rate of 88%
- 61. Initial occupancy rate of 60%
- 62. Growth rate of 8% a year
- 63. Growth ends at occupancy rate of 82%
- 64. Initial occupancy rate of 63%
- 65. Hereafter an occupancy rate of 90%Most likely Worst case Best case
- 66. Weighted NPV, derived from the three scenarios
- 67. European destinations are attractive due to high GDP and tourists Barcelona Rome Monaco (including Nice) Source: Royal Caribbean and International Monetary Fund
- 68. 7 day cruise 8 shows in port 2 shows at sea 10 shows in total
- 69. 9 day cruise 8 shows in port 4 shows at sea 12 shows in total
- 70. 12 day cruise 4 shows at sea 12 shows at Port 16 Shows in total
- 71. Wrap up on estimates on Shows Why 9.3 Shows per week Why 48 shows a year Benchmark: Indecency of the sea In the 2011 schedule it has 48 weeks in Europe
- 73. 3rd largest in Europe
- 75. Main presence in North America
- 76. Current partnerSource: Tivoli, Disney World
- 78. Possible partners Source: Carnival, Royal Caribbean, Star Cruises
Editor's Notes
- Initial costs: equally high for all residential shows (touring Cirque excluded on previous slide!)Easiest to ecpand on current partnerships, Cruises is an area not fully exploited by similar arrangements!Cruising industry has been growing strongly despite financial crisis (casinos have been affected strongly)Scope of Partnership: Disney is already implemented, only very few parks left. Same true for Casinos, plus: industry distress. Tivoli: only one place. Cruises provide good potential.Revenue: Limited for Disney and Tivoli due to limited scope. Casino is limited due to crisis and the best locations already exploited. Cruises: revenue not full since locations can only host about 1200 visitors (opposed to Vegas).
- http://mgm409.wikispaces.com/file/view/17393.pdf Datamonitor SWOT
- Check out our new shows on the following ships:Explorer of the Seas - "Invitation to Dance" (Choreographed by Louis van Amstel from ABC's Dancing with the Stars) and New Ice ShowAdventure of the Seas - "Jackpot" - A Tribute to Las VegasMonarch of the Seas - "Signed Sealed Delivered" and "You Can't Stop the Beat"Liberty of the Seas - "In the Air" (our first flying show)Navigator of the Seas - New Ice ShowIndependence of the Seas - 4 new shows produced for ship's inaugural seasonOasis and Allure of the Seas - dazzling new shows in the first-ever AquaTheater
- Remember to say:
- Mediterranean has great potential:Northern part of Africa, Turkey, israel etc. something they can look into in the future
- (Cirque du Solei at Carnival)
- EBIT from Scandlines
- Nice is the france capital at the French RivieraCanada has GDP pr. Capita at 39,217 (ranked 18)Denmark is ranked 5th with 56,000
- Barcelona 1 portMontecarlo 2 portLivorno 1 portRome 2 portNaples 1 portMessina 1 portFun day 2 seaBarcelona 0
- Venice 1 portFun 2 seaDubrovnik 1 portFun 2 seaMessina 1 portNaples 1 portRome 2 portLivorno 1 portMontecarlo 1 portBarcelona0
- Barcelona 0 port (ONE DAY OFF DUE TO ONLY possible of 4 shows not 6)Montecarlo 2 portLivorno 1 portRome 2 portNaples 1 portFun 2 seaDubrovnik 2 portVenice 2 portVenice 1 portFun day 2 seaMessina 1 portFun day 2 sea