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A Cirque du Soleil Business Strategy Proposal
Citation preview
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