Case study: Tour Planning at Cirque du Soleil

Cirque du Soleil is a Canadian entertainment company. It is

the largest theatrical producer in the world. Its theatrical,
character-driven approach and the absence of performing
animals helped define Cirque du Soleil as the contemporary
circus ("nouveau cirque") that it remains today.

The case is about the opportunity for Cirque du Soleil

management, to include in the tour a new destination,
Istambul, in the summer 2010. The decision must be done
before the end of 2008.

61
Case study: data and information

Louise Murray, Vice-President, Tour Planning and

Partnerships at Cirque du Soleil received on 23th December
2008 a proposal to include Istanbul, as destination, in the
2010 tour.

“A wide range of administrative formalities and tasks must be

accomplished to ensure the transfer of material and people to a new
show site. The tearing down, repacking, shipping and setting up must
all be done in a very precise order. And because each move is to a
new site, often in a new country, the experience is unique every time.
A technical problem, customs difficulties, a breakdown or bad weather
conditions can all lead to costly delays, sometimes even forcing the
cancellation of shows.”

62
Case study: data and information
“Our shows are not produced independently of each other. A synergy
must emerge between these different cultural works. We can see
them as a strategic portfolio of cultural products. Ideally, we would be
able to present several touring shows in succession in a large city in
order to establish our reputation, build an audience and open the way
for the establishment of a permanent show. But you need market
depth to do that. Smaller markets require different solutions. For
example, shows nearing the end of their touring career are now
revamped as arena shows to reduce costs and maximize returns in
smaller markets..”

63
 CIRQUE DU SOLEIL SHOWS AND DESTINATIONS IN 2008-2009

Touring shows
Varekai (Europe)
Dralion (Japan)
Quidam (Mexico, then Europe as of April 2008)
Alegría (South America)
Corteo (North Amerca)
KOOZA (North America)
Arena shows DELIRIUM (Europe)
Saltimbanco (North America)
Resident shows
“O” (Las Vegas, Nevada)
Mystère (Las Vegas, Nevada)
ZUMANITY – The Sensual Side of Cirque du Soleil (Las Vegas, Nevada) La Nouba (Orlando, Florida)
KÀ (Las Vegas, Nevada)
LOVE (Las Vegas, Nevada)
Macao 2008 (Macao, Chine)
Luxor 2008 (Las Vegas, Nevada)
Tokyo 2008 (Tokyo, Japan)
Seasonal shows
Wintuk (New York, New York) From November to January every year
Other Cirque du Soleil shows since 1984:
Cirque du Soleil
The Magic Continues We Reinvent the Circus Nouvelle Expérience Fascination
 Case study: data and information
Twenty-four months from the deadline, the schedules are set and the show dates are sent out
internally by the Internal Communications Department, which has now become the custodian
of the schedule. The communication of these dates sends a green light to the Marketing
Department to initiate promotional and ticket sale activities. Given all these elements, it is
easy to see why the 18-month period is considered borderline for ensuring a smooth
execution.
Turkey would be a new destination for Cirque du Soleil. Cirque has received several
unsolicited proposals from promoters to set up a Cirque show in Istanbul in 2010, according
to the report emailed by Ines Lenzi to Louise Murray earlier this morning. “Surely that’s a sign
that there is interesting potential here!” she muses.
Two serious proposals have been received. The first is from Turkey’s Minister of Culture and
Tourism. The second was submitted by a promoter in the telecommunications sector. As it
does for all the proposals it receives, Cirque has responded with a standard email. This
response is a first step aimed at framing the potential business relationship within a
commercial logic. “Basically, we ask them to do their homework and to ensure that their
proposal is economically viable for Cirque and for them,” Louise Murray explains. This initial
contact generally eliminates proposals from groups or individuals that are not backed by a
solid organization.
In this case, both proposals appear to be supported by serious individuals. In addition, the
market potential is good. After taking a quick look at the market studies at her disposal,
Louise Murray concludes that Cirque can reasonably expect to sell over 100,000 tickets in
Istanbul. This is a realistic scenario. At the same time, she notes that tickets are usually
released for sale in this market eight months in advance.

65
 Case study: data and information
Turkey’s goal is to boost its visibility on the international stage and it has been courting the
European Union for several years. Istanbul was designated European Cultural Capital in 2010.
The Turkish metropolis, which hopes to draw 10 million foreign tourists in 2010, has
announced a series of projects aimed at promoting its historical heritage. With a new leg of
the Grand Prix Formula One in Istanbul, Turkey has resolutely set its sights on the West,
making it a market with a lot of potential in the coming years. The timing for launching a
show in Turkey would thus be perfect for 2010, but the big question is: Is there enough time
to put everything in place?
The proposal also carries some risks. This is a country that Cirque has never before visited. It
has no tried and tested partnerships in this region. Although Turkey is quite Westernized, it
doesn’t really know a lot about Turks’ cultural interests. Nor is Cirque familiar with the
country’s administrative procedures, particularly in the area of customs and immigration.
Many financial aspects also still need to be clarified. Is it easy to get money out of the
country? How do its tax laws work? Then, there are the questions of the infrastructure
necessary to ensure logistics and the installation of Cirque’s operations. For example, is there
a box office network? Will Cirque obtain a site with good potential?
As Louise Murray likes to say: “Impossible is just a word. For us, it’s a challenge to go beyond
our limits.” Challenges and obstacles will not stop Cirque from coming to Istanbul. “But at the
same time, the desire to go beyond our limits should nourish us, not make us burn out,” she
adds.

66
 Case study: data and information
The organization has a motto that Cirque president Guy Laliberté repeats often: “Each
opportunity must offer a choice, a creative challenge that lights a spark in us. That is the first
criterion in selecting our projects. Also, we have to have fun doing what we do.”
For the challenge to become a source of satisfaction, there has to be a good fit between
Cirque’s culture and the host country. Cirque has always refused to compromise on artistic
expression. The fundamental question thus becomes whether the creative work will resonate
with audiences. And the best indicator of that is undoubtedly ticket sales. In short, will the
commercial operation be a profitable one?
Everything is based on the anticipated gross profit margin of the projects, which, simply put,
depends partly on costs and partly on potential ticket sales. The deeper the market, the
higher the revenues. However, there is also fierce internal competition to support one project
or another. Ultimately, the projects selected will be those that are the most feasible... or at
least those that Cirque has the most faith in!
It also happens that decisions are made based on a particularly appealing project or for
strategic reasons, with the profit margin criterion being put on the back burner. “I don’t
systematically try to avoid less profitable destinations. However, it’s my responsibility to
highlight the cost of these strategic decisions and to assess whether it’s worth the effort,”
explains Louise Murray.

67
 Revenue from merchandise sales: 2% of box office revenue

rP
Number of seats in the Big Top: 2,500

Average attendance rate for shows: 85%

Number of performances per week: 6 the first week,

yo
7 to 10 the following weeks,
based on demand2

Average total cost of installation in a city

(including tear-down): 1.5 million

Fixed costs and amortization of

op
show development costs: 1.5 million

Cost of a typical international transfer:3 2 million

Average expenditures per week per show: 1 million

tC
Additional sponsorship revenue:

If Cirque acts alone: between 5% and 20% of

box office revenue

No If Cirque acts with a promoter: between 10% and 80% of

box office revenue
Do

1
These data are adjusted for the Turkish market.
2
The first week is limited to six performances because it starts with the end of set-up and the dress rehearsal. For the
following weeks, tickets are first released for seven performances per week. If demand is high, extra shows are added, for
a maximum of 10 performances per week. Thus, for a typical stay of six weeks, the number of performances can vary
from 41 to 56.
3
Turkey is not considered as requiring an international transfer if the show selected is touring in Europe, North Africa, the
Near East or the Middle East.

© HEC Montréal 17
This document is authorized for educator review use only by maria elena nenni LUISS University of Rome until April 2015. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Preliminary questions
1.  Including a new show in Instambul is aligned with the
company strategy?

2.  What are the available options ?

(qualitative answers)

69
 Further question
3. In which show would you include Istambul as destination?

(qualitative question)

70
PM  concepts  
With reference to the general
framework provided by ISO 21500,
develop an opportune decisional
process for the case. Particularly:

1.  Describe the company strategy

2.  What are the opportunity coming
from the new destination?
3.  What are the expected benefits?
4.  Are those beneficts linked to the
company strategy?
5.  Provide a framework for the
business case.

71