Welcomes You

Consultancy Team Members

Alan Diamond Project Manager

Róisín O’Malley Group Strategic

Director

Niall O’Sullivan Industry Analyst

Sarah May Clarke Innovation Director

Susan Vickers Research Analyst

Profile of Think Tank

Think Tank is a strategic marketing, branding &

innovation consultancy that thinks differently to help clients

build transformational advantage & create new profit

opportunities.

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.

Analysis BreakdownExternal

EnvironmentInternal

Environment

1) PESTEL Analysis 1) Strategic Capabilities

2) Porters' Five Forces

2) Value Chain Analysis

3) Strategic Grouping

3) Benchmarking

TOWS Analysis

PESTEL Analysis

Political Factors

1. Government Parties

2. Terrorism3. Education4. The Euro5. EU

Enlargement

Economic Factors

1. Recession

2. Unemployment

3. Exchange Rates

4. Inflation

5. National Income

Social Factors

1. Demographics

2. Trends

3. Leisure

4. Living Standards

5. Language Barriers

PESTEL Analysis

Technology Factors

1. Ticket Distribution

2. Sound & Audio Engineering

3. Advertising & Marketing

4. Innovation

5. Rate of Technology Obsolescence

Environmental Factors

1. Noise & Air Pollution

2. Energy Consumption

3. Traffic Congestion

4. Waste Disposal

5. Global Warming

Legal Factors

1. Employment Law

2. Product Safety

3. Health & Safety

4. Taxation

5. Competition Law

Potential Entry

Slim Possibility

of New Entry

ThreatsCirque du Soleil

Vs.The Chinese

StateCircus

Suppliers

Buyers

Consumers

1) Online Distribution

2) No Brand Loyalty

Substitutes

Chinese State Circus, Broadway, The West

End

1) Raw Materials

2) Logistics3) Labour4) Finance

Porters Five Forces

Competitive Rivalry

Barriers to Entry

Power of Suppliers

Power of Buyers

Threat of Substitutes

1. Competitor

Balance

2. Industry

Growth

Rate

3. High Fixed

Costs

4. Low

Differentiati

on

1. Some

Barriers

to Entry

2. High Cost

Based

3. High

Capital

Investmen

t

4. Distributi

on

Channel

Ownershi

p

5. Price

1. Concentrat

ed

Suppliers

2. High

Switching

Costs

1. No Brand

Loyalty

2. Low

Switching

Cost

3. Buyer

Competitio

n Threat

1. No Brand

Loyalty

2. No Close

Consumer

Relationsh

ip

3. Price

4. No

Switching

Costs for

Consumer

Porter’s Five Forces Summary

HIGH

PRICE

LOW

NARROWGLOBAL PRESENCE

BROAD

Strategic Group Analysis

HIGH

PRICE

LOW

NARROWGLOBAL PRESENCE

BROAD

Potential Strategic Group

Resources Competences

THRESHOLD CAPABILITIES

THRESHOLD RESOURCES• TANGIBLE• INTANGIBLE

THRESHOLD COMPETENCE

S

CAPABILITIES FOR

COMPETITIVE

ADVANTAGE

UNIQUE RESOURCES• TANGIBLE• INTANGIBLE

CORE COMPETENC

ES

Strategic Capabilities

(Johnson, G, et al 2008)

ResourcesThresholdResources

UniqueResources

Tangible Tangible

1) Financial 1) Human Resources

2) Physical

Intangible Intangible

1) Technology 1) Culture & Knowledge

What is Cirque du Soleil’s Core Competence?

Everything Matters!

Reputation

Innovation

Cirque du Soleil has achieved a Blue-

Ocean Strategy. Its competitive

advantage comes from its reputation

which is hard to emulate.

Value Chain

SUPPORT ACTIVITIES

PRIMARY ACTIVITIES

INFRASTRUCTURE

ADVANCED CORPORATE HEADQUARTERS

HUMAN RESOURCE MANAGEMENT

HIGH COST TRAINING EXTENSIVE EMPLOYEES MANAGEMENT CONTROL IN-HOUSE

TECHNOLOGY DEVELOPMENT

HIGH TECHNOLOGY INTERNET INTERNET INFORMATION

PROCEDURE

STANDARDIZING ITS PRACTICES ALLIANCES OUTSOURCED PRIVATE

INBOUNDLOGISTICS

OPERATIONS OUTBOUNDLOGISTICS

MARKETING & SALES

Services

PERFORMERS PERFORMERS SENT TO

MONTREAL FOR 4 MONTHS

TRAINED PERFORMERS

LOCALIZED GLOBAL

MARKETING TEAMS

MERCHANDISE E.G. DVD’S

PROFIT MARGINS

THIRD PARTY SERVICE

PROVIDERS

Performers

Technology

Cirque du Soleil

Cirque du Soleil’s website

Ticketmaster, LiveNation

etc.

Colleagues

Friends

Family

Cirque du Soleil’s Value System

SUPPLIERS VALUE CHAIN CHANNEL VALUE CHAIN CUSTOMER VALUE CHAIN

OpportunitiesFinancial 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

ThreatsCompetition 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

StrengthsPR – 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

STRENGTHS (S) WEAKNESSES (W)

OPPORTUNITIES (0)

SO STRATEGIC OPTIONUSE THE FIRMS

INTERNAL STRENGTHS TO TAKE ADVANTAGE

OF EXTERNAL OPPORTUNITIES

WO STRATEGIC OPTIONIMPROVING INTERNAL

WEAKNESSES BY TAKING ADVANTAGE OF

EXTERNAL OPPORTUNITIES

THREATS (T)

ST STRATEGIC OPTIONUSING FIRMS

STRENGTHS TO AVOID OR REDUCE THE

IMPACT OF EXTERNAL THREATS

WT STRATEGIC OPTIONDEFENSIVE TACTICS

AIMED AT REDUCING INTERNAL WEAKNESSES

AND AVOIDING ENVIRONMENTAL

THREATS

TOWS Matrix

(Johnson, G, et al 2008)

Cirque du Soleil’s TOWS Matrix

STRENGTHS (S) WEAKNESSES (W)

OPPORTUNITIES (0)

SO STRATEGIC OPTIONCIRQUE DU SOLEIL

MANAGEMENT CREATING NEW SHOWS

CONTINUING TO INNOVATE

WO STRATEGIC OPTIONTARGET MARKET,

LOWER INCOME DUE TO RECESSION

THREATS (T)

ST STRATEGIC OPTIONBECAUSE OF THEIR REPUTATION THERE

COULD BE A BACKLASH IF CIRQUE DU SOLEIL WERE TO CREATE A

LOW COST ALTERNATIVE

WT STRATEGIC OPTIONDEFENSIVE. AVOIDING

COMPETITION. THREATS OF POACHING

EMPLOYEES THROUGH OVER-PROMISING ON

INCENTIVES THAT THEY CANT MEET

VERTICAL / HORIZONTAL INTEGRATION STRATEGIES

INTENSIVE STRATEGIES

DIVERSIFICATION STRATEGIES

DEFENSIVESTRATEGIES

FORWARD

INTEGRATION

BACKWARD

INTEGRATION

HORIZONTAL

INTEGRATION

MARKET

PENETRATION

MARKET

DEVELOPMENT

PRODUCT

DEVELOPMENT

CONCENTRIC

DIVERSIFICATION

CONGLOMERATE

DIVERSIFICATION

HORIZONTAL

DIVERSIFICATION

JOINT VENTURE

RETRENCHMENT

DIVESTITURE

LIQUIDATION

Strategic Options

(Lynch, S. 2011)

Recommendations

1) Market Penetration

2) Market Development

3) Product Development

4) Concentric Development

5) Joint Venture

Strategic Options Available to Cirque du Soleil

Market Penetration

1)INTRODUCE AMBUSH

MARKETING/VIRAL ADVERTS. CIRQUE

DU SOLEIL NEEDS TO UTILIZE

ONLINE MEDIA TO PROMOTE NEW &

EXISTING SHOWS.

2)EXPAND INTEREST IN CIRQUE DU

SOLEIL THROUGH SUBLIMINAL

ADVERTISING.

Market Development

1)ABBA-THEMED SHOWS.

2)INNOVATION THROUGH CELEBRITY

ICONS.

Product Development

1)GENERATE MORE INTEREST IN

MERCHANDISE E.G. DVDS

2)SEMINARS & MOTIVATIONAL

SPEECHES

Concentric Development

1)UTILIZE TRAINING FACILITIES,

ADOPTING THEM TO SUIT THE

PERFORMERS NEEDS & IMPROVING

THE ORGANISATION.

Joint Venture

1)WORK WITH EXTERNAL

ORGANISATIONS.

2)DIVERSIFY.

3)CREATE SPORTSWEAR & SPORTS

EQUIPMENT

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.

Thank You

Merci Beacoup

Go Raith Maith Agat

“Great Minds Think Unlike”

Welcomes Any

Questions