North South University

Topic: Strategy for Cirque Du Soleil

Course: Mgt 489
Section: 15

Submitted to
Bobby Hajjaj
North South University
Submitted by
Name: Moushan
Id: 1711522630

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 Contents

Vision Framework ......................................................................................................................3

Strategic Intent……………………………………………………………………………..3
Mission...................................................................................................................................3
Core Values............................................................................................................................3
Core Purpose.......................................................................................................................... 3
Key Issue.................................................................................................................................... 3
Goal........................................................................................................................................... 3
Porter’s 5 Forces Analysis …………………………………………………………….………. 4
Barriers to Entry ................................................................................................................ 4
Competitive Rivalry……………………………………………………………………… 4
Power of Buyer.................................................................................................................... 4
Power of Suppliers ............................................................................................................... 4
Threat of Substitutes............................................................................................................. 5
Value Chain ..............................................................................................................…… 5
Step 1: Main activities ....................................................................................................... 5
Step 2: Critical Value-Creating activities ......................................................................... 5
Step 3: Internal Cost Analysis .......................................................................................... 5
Step 4: Internal differentiation analysis ............................................................................ 5
Step 5: Industry profit pools .............................................................................................. 6
Step 6: Vertical linkage analysis ....................................................................................... 6
Step 7: Iteration ........................................................................................…………..……6
Key Success Factor……………………………………………………………………...6
The Value Net ................................................................................................................ 7
Strategy based on PARTS .............................................................................................. 7
Competitive Advantages………………………………………………………………..8
RBV…………………………………………………………………………………......8
3 Generic Strategy……………………………………………………………………….9 -10
Value curve…………………………………………………………………………………11

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Vision Framework:
The strategies are made for the Cirque Du Soleil. And our vision is to engage people from all
around the world by being in the distinctive mediums of diversions to hold the enthusiasm of the
gathering of people by separating themselves with their imagination and expressions
Strategic Intent:
 Cirque Du Soleil has unique expansion plan which is to deliver the experience and
entertainment at a different and at a grand scale.
 Cirque Du Soleil management is committed to expand and diversify the business all the
while without any degradation of quality of the performance.
Mission:
 Dedicated to deliver an experience to the audience that connects them with the
performers and the circus itself at an emotional level.
 Creates a sophisticated bond with the audiences rather than just being a commercial
entertainer.
Core Values:
 Passion for take the fancy of audiences.
 Cirque have not forgotten its root as a street performer and it promotes the street
performers around the globe.
 Give proper knowledge about the circus.
 Always attract new talents to performers.
 To uphold the integrity of their creative process.
Core purpose:
 To encourage and promote the potential of youth.
 Inspiration from cultural and artistic diversities.
Key issue:
 Increasing number of competitors creates pressure on company.
 Due to the failure of “The Battersea Project”, company’s brand image was massively
affected.
Goal:
To support & sustain top position in the business and to be the number one circus company all
over the world.

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External
Porter’s five forces model of Cirque Du Soleil
Barriers to entry:
 Investment cost is too high also capital cost.
 Extraordinary skills and learnings need for the show.
 Have to pay higher to the premium employee.
All the information is high level. So, company is attractive.

Competitive rivalry:
 Basically, only two competitors of Cirque Du Soleil – Cirque Eos and Cirque Eloize.
 Switching and industry cost is low.
 Brand loyalty is also low.
All the information is moderately low. So, industry is attractive.

Power of buyers:
 The buyers having strong bargaining power can highly influence the profitability of the
suppliers operating in the market by imposing condition that are not much favorable for
the suppliers in terms of price, quality or service.

 The products in the industry are standardized or are undifferentiated.

 The cost of switching is comparatively low.
All the information is moderately high. So, industry is not attractive.

Power of suppliers:
 Existence of few number of supplier.
 Powerful supplier possess more power to capture significant value for themselves by
demanding high prices while limiting the quality and the quantity of the product or
services or by transferring cost on the participant of the industry.
 The product being offered by the suppliers are highly differentiated.
 If the participants in the industry have to incur high cost for switching suppliers or the
firms are located adjacent to the suppliers manufacturing facilities.
All the information is high level and the high level power of suppliers means the industry is not
attractive.

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Threats of substitute:
 Competitors offers similar service via online streaming and rental DVDs.
 Traditional media content provider.
 Customer engage in leisure activities and source of information.
So, all the information is high that’s why the industry is not attractive.

Value Chain
Step 1: Primary Activities
 Inbound logistics – Travel group in charge of receiving new artist; Coordination in
arrivals, visas, papers, travel, arrangement, work permits and accommodation
 Operations – Production alignment; Performers sent to Montreal for 4 month for
training and rehearsals
 Outbound logistics – Trained performers; Internet; Outlets
 Marketing & sales – Localized global marketing teams; Ticket sales; Cirque’s
website/ forum; Cirque club
 Services – Tours; Customer support; Merchandise. For example, DVDs

Step 2: Critical value

 Cirque Du Soleil’s main critical value activities are IT integration, Global process
alignment and Training & Development.

Step 3: Internal Cost Analysis

 Cirque Du Soleil focuses on cutting costs on critical value activities like operations,
services and marketing.

Step 4: Internal Differentiation Analysis

 Cirque Du Soleil focus on differentiating their critical value activities like the IT
integration, Global process alignment and Training & Development. For example,
cirque’s wide range of IT integration and training and development helps them to
differentiate their critical value creating activities further.

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Step 5: Industry Profit Pools
 According to all data analysis, the permanent shows are understood to bring in around
$650 million annually with each tour taking around $40 million per year to give Cirque
annual revenues of around $1 billion. Analysts estimate that the company’s overall profit
margin is around 20% and this drove its blockbuster valuation. However, Laliberte didn’t
sell up just to boost his net worth which stands at $2.1 billion according to Forbes.

Step 6: Vertical linkage analysis

 Cirque du Soleil Entertainment Group creates content for a broad range of
audacious projects and Cirque du Soleil Entertainment Group can focus on their
own retail outlet and online also because currently their employees 4,000 people,
including 1,300 artists, who originate from nearly 50 countries which profit for their
own.

Step 7: Iteration
 It is a repeated process. So, this process will be continued.

Key success factors for industry analysis

Uniqueness, Innovation, Brand Value, Competitive Imperatives, Technological advantages,
Financial Imperatives, Marketing Imperatives, Organizational Imperatives, Operational
imperatives are the main key success factor for an industry. In Cirque Du Soleil, they are a
great sample of the strategy called blue ocean strategy. Major factors which kept the
audience moving towards them are:
 Unique venue
 Unique theme
 Artistic moves
Innovation is one of the biggest success factor, for cirque, they innovate the way to make a
move in the market. This move was successful enough to make the world famous. They get
ideas from many artists on how to improve on the current status and what new they can bring
on the table. Cirque has focused on costs since beginning, they have cut the cost by not
taking animals in their moves. They don’t focus on big stars and the training cost which they
need to pay for animals. Rather the creative team is not dependent. They get their ideas
implement it and are fully free to modify the same. For example, once the art director of
cirque has asked the creative team to use painting style for showing plots.

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 The value net

Supplier

MAC & SAP

Cirque Du Complementor
Competitors
Soleil Low (No major
Feld
partner)
entertainment
, Live
Mation, Six
flags

Buyer

Retailers &
repeated
visitors

Strategy based on PARTS

Cirque Du Soleil can change the players of its value net by setting up their own industry. If they
want to some changes in the industry they can make their suppliers distributors or distributor
suppliers. In this way they can become their own supplier and decrease their cost.
Cirque Du Soleil can change the added values in their industry by creating some difference from
their competitors. They can make many other different shows in performance throughout the
world which make them the best from others.
Cirque Du Soleil can change the tactic in the way they do in industry. Sometimes, they can offer
some cost reduction for their live customer’s ticket. Thus, they can increase their customer.

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Competitive advantages
The talented human resource is the competitive advantage of Cirque du Soleil. Their extensive
recruitment process allows them to find the best artists, athletes, musicians, and singers.

Internal
Distinctive Competency
 Cirque’s competitive advantage is its culture that supports and energizes its innovation
goals. Cirque strengthens its distinctive competency of creativity and achieves business
objectives by creating an environment of trust and dedicating resources to encourage
employees to hone their craft and try ideas.

Resource Based Proposition (RBV)

Valuable Rare Inimitable (VRI): The main vulnerable power of this industry is all of their
employee. Cirque du Soleil has found competitive advantage in its employees and their brand
value. Those extra talented individuals are hard to find, and not everybody can do their job. So, it
is not easy to achieve a sustainable competitive advantage because it is rare and difficult to copy.
So, they can make competitive advantage in their industry.

 Experience in expansion to other countries-The experience of expansion to other

countries directly as well as indirectly has allowed the company to gain exposure and
experience in international business, culture and trades.

 Marketing skills-The company has a unique blend of marketing skills, which allows it to
reach consumers directly through various channels, in a creative way. This is a valuable
resource for the company as it allows the company to ward off potential competition.

 Human resource management- The Cirque has taken part in exemplified human resource
management in all its function – from recruitment to training of talent management. This
has allowed the company to develop an inimitable resource that is aligned with the
organizational goals, and mission, and which is synonymous to the organization itself.

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Vulnerable Rare Inimitable Non-substitutable (VRIN): It would be generally simple for other
companies to revamp their packaging and duplicate the plan of action of Cirque du Soleil. In this
way, the upscale and comfortable promise of the offering by Cirque du Soleil could be imitated.

 Brand recognition- The brand value and brand recognition enjoyed by Cirque du Soleil is
a non-substitutable resource. The high brand recognition across different consumer group
in different countries allows the brand to enjoy high consumer ship, high sales, and a
unique bond with the consumers. This cannot be imitated at all by the competition as the
brand recognition and resonance has been built over the years through hard work and
quality deliverance.

 Brand equity- The Cirque du Soleil enjoys high brand equity. This has been developed
through the different stages presented by Keller in his model for brand equity. The high
brand equity also reflects a high emotional appeal that Cirque du Soleil has for the
consumers.

Vulnerable Rare Inimitable Organizational (VRIO): The main vulnerable power of this
industry is all of their employee and brand value.

 Organized out to exploit- By offering an assortment of choices and ceaselessly changing

the portfolio through active innovation and new product development, Cirque du Soleil is
exploiting this resource. With plenty of alternatives, the vast majority can discover
something they like, and individuals who like to attempt new products and services every
now and again can undoubtedly do as such with Cirque du Soleil

3 Generic Strategy
Cost leadership: Cost leadership is the main generic strategy that Cirque Du Soleil uses in
various consumer markets.
 The primary objectives of using this strategy is to preserve the market leadership position
through efficient value chain management.
 This strategy allows Cirque Du Soleil to expand the market share by targeting the middle
class, which makes the largest proportion of overall consumer market mix in most of the
countries. Middle class consumers generally place high importance to the pricing factor
and cost leadership is the best strategy to cater the needs of this consumer segment.
 Other than charging low prices by lowering production cost and maximizing supply chain
efficiency, Cirque Du Soleil frequently offers discounts and coupons to achieve sells
target and handle the competitive pressure by its closest rival. The intended outcome of

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 these discount and promotional campaigns is to increase brand popularity and encourage
consumption.
The discussion of Cirque du Soleil’s cost leadership strategy has outlined many benefits offered
by this generic strategy, such as- gaining quick brand recognition, expanding the customer base,
encouraging consumption and achieving sales targets by emphasizing over product’s
affordability and accessibility.

Differentiation: Cirque du Soleil uses differentiation in combination with the cost leadership
strategy to achieve growth objectives.

 The adoption of differentiation as a secondary generic strategy allows Cirque du Soleil to

expand the customer base by emphasizing over the unique product features.
 Cirque du Soleil's strategic objective of using this strategy is to differentiate by embedding
the innovation and address the consumers’ growing health concerns
 Extensive experience, the oldest brand and strong presence in all over the world are some
differentiation factors that are highlighted in the company's marketing and
communication strategies.
 The brand logo is also used to set the differentiation basis. The unique and distinctive
brand logo has established a strong brand image in consumers’ mind.

Moreover, the company offers a wide variety of flavors to match the unique taste needs of
consumers. It uses innovation as a tool to offer differentiated augmented services that may
delight the customers and increase their preference of Cirque du Soleil over other brands.

Focus Strategy: Focus is the third generic competitive strategy that encourages companies to
concentrate their resources on expanding the narrowly targeted segments.

 Cirque du Soleil adopts the focus strategy both in terms of low cost and offering the best value.
The low-cost focus strategy is adopted by serving the needs of a niche market segment at the
lowest possible price. While, best value focus strategy is adopted by emphasizing over the taste,
size and design of the product that could best match the customers’ needs and requirements.
 By focusing on product attributes, Cirque du Soleil revises its branding strategies and brings
continuous changes in the product designing and packaging to satisfy the customers’
psychological expectations and maximize value for money.

X-Factors (Points of parity)

 Clowns, Jugglers, acrobats and aerialist.

 Travelling shows in arenas and under tents.

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 Value Curve:

Best Strategy

According to all of the strategies, KSF, RBV & 3 Generic Strategies were the most relevant ones
with our goal.

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