Case Analysis

Cirque du Soleil.

External Analysis

To conduct a meaningful analysis and propose a strategy, it is necessary

start from the most remote environment, for this certain are used
tools like the SEPT analysis where the position of the
company in the following aspects

The social aspect aims to take into account the changes and trends at the social level and
cultural factors that can influence business decision-making.

. Social responsibility: it is fundamental to the business structure

of this organization and its management methods as they consider themselves
citizens of the world and as such are convinced that the arts,
businesses and artistic initiatives can together contribute to a better world
always respecting the neighbors as well as the environment, the laws and
cultures of each place where they work.

. Commitment: 1% of their annual income is dedicated to programs.

social, cultural, and neighborhood and city projects; in which they have
decided to promote the potential of youth and, for that reason, has become
an international leader in social circus; offering young people the
possibility of having a positive personal experience.

. Animal Consciousness: The non-incorporation of animals in the show.

. Purchasing Power: The Cirque du Soleil is aimed at certain people

since only a few can afford the high price of their tickets.

. Consumption habits are increasingly oriented towards reducing levels.

of stress and health, both mental and physical, the fun that it delivers
circus seems to be a good alternative.

. It helps various organizations and social programs and is a member

active in the artistic community, supporting organizations from various
shapes.
. The status that comes from mentioning having witnessed a show by Cirque du
Soleil instead of another circus is incomparable.

Political Aspect.

. Entry restrictions to countries at war or with different cultures

that do not allow the exhibition of these shows, such as in some
There are harsh penalties for those women who show more than what is permitted.

. Since they have their own trucks to transport their shows the
The variation in fuel prices plays a fundamental role.

. Health policies of each country.

Analysis of economic aspects, which are intended to consider the

evolution of the economy and how they influence spending models and habits of
consumer purchases.

. The strategic alliances achieved during each visit are beneficial.

for the economies of different countries or localities.

. The high cost of the tickets could negatively affect those

countries where unemployment is significant and only a few can access
to this type of shows.

. Due to the high income generated by this business, they could be affected by
tax policies or tax regulations.

Technological

. The technological evolution of recent times is a valuable tool

that allows them to use it either to incorporate it into their shows or
to disseminate these.

. The massification and entertainment alternatives linked to technology

they have increased which could be unfavorable

Analysis of Opportunities and Threats

Opportunities (positive external situations that can be leveraged).

. Clearly segmented target market, due to the high cost of the

tickets compared to other circus shows.

. Inexhaustible ability to reinvent oneself, to keep up the pace of

innovation and commercialization.

. Business vision under the model of new strategic alliances.

. The awareness of the general population about the protection of

animals will allow you to quickly capture that audience.

. Redefinition of the concept of show.

. It proposes a new concept of circus, modern, cultural which consists of

in a surprising theatrical blend of circus arts and the arts of the
street.

. Channel your passion and integrate people from different cultures and
nationalities bring a difference to the show since everyone
they excite, amaze, and identify with it.

. Although the most important activity is the creation of shows

live originals, they also excel in other areas such as music,
theater, television, cinema, marketing and licensing, and a large
a variety of very interesting and profitable projects.

. Competitive positioning with value propositions.

. Globalization.

. Status.

. Growth: the setup of your show can have presence

permanent in order to meet market demands.

. Cultural variety is so vast worldwide that acceptance is

high in any scenario.

Threats (external negative situations that threaten or may be

overcome).
. Video games capture the attention of both children and adults every day.
not so much and at a much lower cost where quality is not prioritized.

. The massification of new entertainment alternatives such as the

cable television and Internet.

. Political changes and government actions in the countries that

think about visiting.

. Inclement weather.

. Demographic factors.

. Own transportation, from the perspective of strikes or increases

significant in fuel.

. Economic crisis situation in some countries. Resources are allocated to the

scarce resources to consume essential goods.

. Negative factors in the global economy, inflation problems,

energy scarcity.

. Cultural differences.

. Pandemics or diseases that may develop in the form

surprising in the visited country.

STRUCTURAL ANALYSIS OF THE INDUSTRIAL SECTOR

UNFAVORABLE Favorable

MEDIUM HIGH neutral MEDIUM HIGH

Threat of New Competitors

Scale Barriers

Economies of Scale small x big

Product Differentiation or Brand Loyalty low

x high

Cost Change Supplier for the client or Distributor under

x high
Access to Distribution Channels broad
restricted

Cost Advantages Low imp. x Very important.

Government Policy Little imp. x Very important.

Expected Reaction

Industrial Sector Growth Rate quick x

ribbon

Resources of the Firms few x many

High exit barriers low

History nonexistent x existing

Average Attractiveness

Negotiating Capacity of Suppliers

Number of Important Suppliers few x

many

Provider Change Costs for Companies in the High Industrial Sector

x lows

Threat of the S.I. To integrate backwards low x

high

High forward integration threat from suppliers x

low

Importance of company or industrial sector for the supplier little

x many

Threat of substitutes low x high

Average Attractiveness

Pressure of the Substitutes

Relative price of substitutes low x high

High price-quality ratio low

Profitability of the I.S. of the substitute high x
low

Change costs for the customer or Distributor low x

highs

Customer attitude towards favorable substitutes x

unfavorable

Average Attractiveness

Negotiating Capacity of Clients or Distributors

Number of Important Clients few x

many

Importance of Input Cost on Total Costs a lot x

little

Degree of Standardization of the Product high x

low

Profit or Benefit of the Customers low x

high

Threat of backward integration by customers high

x low

Threat of the S.I of Integration moving forward low

high

Customer information about the company many x

little

Importance of the product for customer quality little

x much

Average Attractiveness

Intensity of Rivalry

Number of competitors with similar resources and capacity few x

many
Industrial sector growth rate ribbon x
fast

Magnitude of fixed costs or large storage costs x

small

Competitors with different objectives, strategies or interests many

x few

Product Differentiation or Brand Loyalty low

x high

Exit Barriers

Specialized Assets many few

Fixed Exit Costs highs x low

Emotional Barriers high x low

High Social and Governmental Restrictions x

low

Average Attractiveness

After the structural analysis of the industrial sector, we can conclude that:

This company can achieve great economies of scale which is highly

favorable in relation to the Circus industry, since the other companies
circuses are not yet prepared for the level of show to be achieved
better position.

The development of the business does not depend on a specific supplier or

certain brands, only the necessary supplies for the production of their
own articles will therefore have great bargaining power.

Cirque du Soleil has the financial backing to support the investment.

initial that is done for each Show which is highly favorable.
The show he puts on is of a great level, incomparable to the productions.
from other circuses, this allows them to achieve a great brand recognition and charge
a higher price for each function. Price-quality relationship.

It practically has no competitors, given its unmatched setting in

the scene makes it unique, the competitors it could have although it is true
Quality performances lack the magic and mystique of the Cirque.
Of the Sun.

Internal Analysis

Analysis of Strengths and Weaknesses

Fortresses

. Expanded product.

. Great professionalism of the actors.

. Investment in infrastructure.

. Own developments of musicalization, scenic production,

clothing.

. Economic solvency.

. Well-paid human resource that achieves a sense of

belonging and loyalty.

. Your Show itinerary allows you to achieve a planning that brings you
great benefits.

. Keeps its artists in constant training in its own venues.

. They have ventured into other areas of business taking advantage of the
existing technologies.

. Good negotiating power with your suppliers and customers.

. Trajectory.
. The fact of not using animals in their show allows them to reduce their
fixed costs and at the same time achieving social recognition for it.

. They have labor policies that encourage teamwork, which

some way narrows the cultural gap.

. Unending capacity for reinvention, to maintain the pace of

innovation and commercialization.

Weaknesses

. They must coexist with a large number of different cultures.

. The large number of employees makes it difficult to transmit the culture.

organizational.

. The constant pressure to maintain innovative and equal shows

at a higher level than the previous one.

. High levels of specialization that lead to a high cost of

production.

. Long production time for each show.

Identification of UEN

Although most of the income of Cirque du Soleil comes from sales

of entries, are also dedicated to secondary businesses.

At Cirque du Soleil, we were able to identify 3 Strategic Business Units.

. The show: it is the one that reports the highest profits to the company.

. Sales of CDs and DVDs,

. Production of television programs about shows and creation of
contents for third parties.

An agreement with the company is recorded in this last category.

Celebrity Cruises, which aims to improve the experience of its clients.
In addition to having designed a bar, which will be constructed on several boats of the
line and where exotic drinks and food will be sold, the circus people do
sun will offer a show set with marine landscapes, this will
it will allow the inauguration of a market that will expand content generation
for clubs, restaurants, and hotels.

Product Life Cycle (Show).

SALES

Time

Introduction Decline

The show, according to the CGB matrix, is considered a Star product; already
which has attained a competitive position in the market and is also
constantly growing as it has managed to maintain its position against
to the different types of competencies and does not require such a high one
investment for its development since the product is already accepted and recognized
therefore you can reap its fruits (Milk Your Cow)

Product life cycle (Sales of CDs and DVDs.)

SALES

Time

Introduction Decline

CD and DVD sales are considered Dog products as they are not the
main tool for the Cirque Du Soleil business; just a contribution, which
in addition to providing utilities, it serves for marketing, this product has
the difference of the show goes through the different stages of the Life cycle to
measure of the time elapsed of the same show; but in its period of
maturity also has characteristics of a star product that is the reason
for which this product is not being removed from the portfolio, as its sales are
direct reason to the time of the show displayed.

MARKET SHARE

CASH GENERATION

High Low

High

Lower
The competitive strength of the Cirque du Soleil business lies in the productions and
renewed functions that are shown in the visited cities since each
show is a question, for this they must first create and make a
product launch or introduction of your new show, in which
choose the artists who will make up the cast, the fabrics and designs to be used, the
lights and support materials for the show, expected collections and
investment to be used as this will vary depending on the city visited and the amount of
tickets sold

all of this involves the Introduction stage, then we encounter the

growth stage in which tickets begin to be sold
until reaching the Maturity stage, which is the one in which it consolidates the
show and it is when one begins to think again about renewing and
start with the new season.

Product life cycle

Identification of Product Type according to the BCG Matrix.

Upon reaching a stage of maturity where there is high participation

of the market and a high growth rate we are facing a
Star product, I want to say that Cirque du Soleil are leaders in the
business therefore generates large amounts of cash.

Although it is worth mentioning that we are also in the presence of a product

incognito since the creation of each new show generates a new cycle.

Competitive Advantages
The strategy used by the CDS is differentiation, as it aims at a
clearly identified public that can pay the high value of the
tickets in exchange for witnessing a unique performance.

As part of its strategy, Cirque du Soleil eliminated star artists, the idea
so that everyone has a similar role since there is a high turnover of
workers; eliminate animal shows, reduce the number of comedians and
clowns, create a refined atmosphere, diverse productions, dance and music
artistic.

Artists are asked to reach the limit; beyond excellence to

leave the audience stunned who already comes with high expectations, those that
they exceed expectations since artists reach a level of sophistication
such that they stand out from the other competitors, who do not exist.
for them.

Competitive Advantages give rise to Basic Generic Strategies such as:

Advantage in Differentiation: where Cirque du Soleil does not bet on volume nor
to the costs, but to the quality. The market is focused.

This allows them to stay away from cost risks such as inflation in the
costs, excessive focus on cost versus changes to the product.

Competitive strategy refers to the plan of companies to obtain and

defend a competitive advantage within their sector, allowing them to resist
the attacks from the competition, and it is in this strategy where the circus du
The sun has stood out over time.

To achieve strategic objectives, the CDS aims to be a Leader in the

market. Since they have acquired different characteristics that have isolated it from
the direct competition within its sector.

As for example:
- Prestige

- Cutting-edge technology

- quality

- Status

- Brand positioning

This strategy has allowed them to:

- Having consumers willing to pay

- Having a low participation from its competitors (other circuses)

- No imitators

- Be unique in the world

The growth objective is found in most strategies of

businessmen, to maximize sales volume and participation
of the market that benefits the organization.

The growth strategy of Cirque du Soleil is related to Development

of the market and diversification, as they create and generate new stories
to be shown in new markets, that is, in different countries, and
opportunities located outside of their usual field of activity.

This has allowed him to develop in different markets, in new ones.

segments, new distribution circuits, and having a geographical expansion
and be known worldwide.

At Cirque Du Soleil, we find the development strategy present

markets; since it seeks to sell its same products in different markets
(Shows, CDs, and DVDs), which have provided many benefits and are
known for their grand shows which can be endorsed and
recommended by customers.
The competitive strategic advantages are:

Sale of CDs and DVDs:

Since they achieve a good position through a set of policies

established before and during each show; which is accompanied by a
strong propaganda and massive sales of them at each event, since the
customers feel increasingly satisfied. (Captive Clients)

Shows: The basic competitive advantage used is Leadership in

Differentiation which has helped it to position itself in the market of the
Circus; the show offered is perceived by the audience as unique and
exclusive, with a special value compared to the other options that may exist in
the market, as it fully meets the expectations and needs of
Client, one of the prizes for the Circus is the highest price that is published.
willing to pay for this show which translates to a better margin
what can be achieved.

High levels of loyalty and recognition are achieved

Growth strategy:

The strategy used by the CDS is differentiation, as it aims at a

clearly identified audience that can afford the high value of the
tickets in exchange for witnessing a unique show in its genre. This is
achieves basically because of its high quality of the Show and