Cirque du Soleil: Innovation, Strategy, and Entrepreneurship

This report provides a comprehensive analysis of Cirque du Soleil's business strategies, innovation, and entrepreneurial opportunities. It begins with a brief overview of the company, its history, and its success in the entertainment industry. The report then delves into the key strategies employed by Cirque du Soleil, including operational strategies, vertical coordination, pricing strategies, and partnership strategies. It highlights the company's innovative frameworks, such as new sets and designs, entertainment quality, and innovative marketing methods, including the application of the Blue Ocean Strategy. The report also evaluates the innovation and entrepreneurial opportunities within Cirque du Soleil, addressing challenges such as global citizenship and international expansion, along with economic challenges. Finally, the report examines the application of the Blue Ocean Strategy in analyzing the success factors of Cirque du Soleil, offering insights into how the company achieved its competitive advantage and maintained its position in the entertainment industry.

STRATEGY, ENTERPRISE, AND INNOVATION
STUDENT NAME:
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Table of Contents
Introduction...................................................................................................................... 3
Brief Overview of the Company:...................................................................................... 3
5.1 a)................................................................................................................................ 4
Strategies:........................................................................................................................4
Evaluation of the innovation and the entrepreneurial opportunities.................................7
5.1 b)................................................................................................................................ 8
Application of Blue Ocean Strategy in analyzing the success factors of Cirque du Soleil:
......................................................................................................................................... 9
Conclusion..................................................................................................................... 12
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Introduction
Every business needs a business strategy to be successful in the industry. Cirque du
Soleil is no different from this principle. In this assignment, a brief overview of Cirque du
Soleil will be discussed. The complete history of Cirque du Soleil and the journey of the
success of this entertainment company will also be discussed. Then there will be a
discussion about the main accelerators of innovation and entrepreneurial opportunities
contributing to the success of Cirque du Soleil. The complete description of the Blue
Ocean Strategy will also be discussed. There will be critical analysis of the Cirque du
Soleil success with respect to the successful application of Blue Ocean strategy.
Brief Overview of the Company:
Cirque du Soleil is a Canada-based entertainment company established in the year
1984. It is located in Quebec. It is one of the largest theatrical producers in the world. It
has a total of over more than 5000 employees. Cirque du Soleil has a revenue
generation of 850 million Canadian dollars. It has two divisions of images and
merchandising and has one subsidiary of Cirque du Soleil Musique.
Figure 1: Logo of the company
(Source: Cirque du Soleil, 2016)
Cirque du Soleil is a contemporary circus business, which was funded by the grant from
Canada Council of Arts. The entertainment company was started by Guy Laliberte after
touring from a whole of Quebec. There is a rapid expansion of Cirque du Soleil from
1990 to 2000 and has gained huge profits in these years. The show of Cirque du Soleil
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is running in over 300 countries and all continents except Antarctica. Cirque du Soleil is
currently planning to open a residential show in the United Arab Emirates. This is done
to further finance the show along with its two subsidiaries (Cirque du Soleil, 2016).
There are a number of other different shows in development around the whole of the
world in spas, restaurants, and nightclubs. It also produces a number of private and
corporate events in the each coming year.
5.1 a)
Cirque de Soleil, being an entertainment company has undergone various strategies for
its success. The company even came forward with various innovative frameworks,
which has set new standards in the entertainment industry.
Strategies:
The company has followed an operational strategy very well. Simon (2015, p.58) has
clearly stated that according to this strategy, the company divides its entire operational
lifecycle into various divisions. Cirque de Soleil operational strategy is stated as clear
and one of the most efficient one. Its entire operational management was divided
initially into the three divisions. Initially, the management was totally based on Montreal
then later on; the company expanded its operations or tours to North America .Further,
from the North America, it moved towards to Europe and several parts of Asia.
Another important strategy that the Cirque had followed for its success was the
introduction of the vertical coordination in its organizational structure. This structure was
made to provide a support in casting the delivery of the superior performances. This
helped the organization in building a charismatic leader. Guy Laliberte was the leader
who helped in building a strategic vision for the development of the company. It was the
vision of the Guy Laliberte only to create a creative environment out of the circus. There
was a vision to form the group of all the creative people working altogether. There were
several problems occurring as in terms of management due to the distance. Therefore,
a strategy was made so that a proper coordination amongst all the employees, staff,
management, artists, sales persons across the various parts of the globe.
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Another strategy that the company followed was the pricing strategy. In general,
pricing strategy helps a company to identify its target audience and accordingly the
company can sell its products or the services easily (Stephens, 2015, p.243). Cirque
followed its own pricing strategy, which drives success to the company. It targeted
audience consisted of the upper middle-class families. In general, its ideal price tickets
range is from $59 to $99.
The Cirque has followed the premium pricing strategy. As the audience of the Cirque,
comprise of the elite customers. Due to this premium, pricing strategy the Cirque is able
to set the range of the tickets high, which helps in creating a standard of the service it
provides. As Cirque shows are always unique from its competitors and are able to
create an image of the prestigious brand. Thus, it has followed the premium pricing
strategy so that it can provide high-class shows to its elite customers.
Further, the main important strategy followed by Cirque was the partner strategy. Cirque
took the decision to collaborate itself with MGM, which also proved to be another ladder
towards its success. This merger involved a proper partnership strategy that included a
proper communication flow to develop peace and a harmony between both the
companies. Even to bridge the gap of communication both the companies went on
together on a lot of vacations and activities like evening dates, get together were often
organized. These frequent meetings helped the employees of both the companies to
accept each other differences. Thus before their official collaboration both the
company's management were well aware of each other strengths and weakness, which
even reduced the level of conflicts or disputes amongst each other. This created a
better level of understanding amongst them and therefore both the companies were
able to deliver good quality of performances to their audiences (Presenter, 2015, p.68).
Various innovative frameworks were specifically done by the Cirque. The innovations
made such as the new sets and designs. Cirque became famous for its colossal amount
of investment done in its sets. The investment does not only include the investment
done in terms of money but also in terms of the time, planning and detail set of actions.
Apart from the investment done in the sets, there was huge investment also made in the
costumes used by the actors (Martins et al. 2015, p.100).
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Further, the company developed innovation in its entertainment quality, as it was able
to differentiate itself from the normal traditional circus to a higher quality of levels. The
company makes its niche by delivering the live entertainment to its audience, thus it
took the entertainment industry to all new levels. In all its performance there was a huge
amount of the creativity and innovation could be seen which helped the company
differentiate itself from the rest of its competitors.
Innovative marketing methods have also introduced the Cirque. Cohendet and Simon
(2015, p.7) stated that the company approximately before eighteen months of its
performances used to create a team, which did a lot of research work. Thus, based on
its researches the themes of the performance and necessary actions were taken as per
the requirement of the audiences.
Kheng and June (2015, p.25) has stated that apart from its own framed innovations,
Cirque was even successful in the innovation of the Blue Ocean Strategy very well.
With the help of innovation done in the traditional Blue Ocean Strategy, the company
was able to create a huge demand amongst the people as compared to any random
company in the circus industry. There was a fusion of the art and entertainment in an
innovative way made that attracted the audiences the most.
Cirque laid new form of entertainment by combining altogether the circus art , the
famous ballet, and theatre in one performance.
Another innovation was the founder of the Cirque, Guy Laliberte that was referred as
the Road Ahead. The Road Ahead stated that the Cirque to become the capital of the
entertainment industry in the world. Further, as per this road ahead, innovation did the
Cirque, was able to make its entertainment empire in various cities.
As before this strategy, the Cirque was not able to expand its empires across the globe.
After the implementation of this strategy, Cirque was able to accomplish the vision of
the Guy Laliberte to make Cirque reach the maximum audiences across the globe.
The Cirque was able to conduct many corporate shows in various cities. The major
cities were Cirque will capture its market initially to London, New York then will move
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towards Singapore and Hong Kong. Then after the road ahead strategy the Cirque was
able to get a completely new lot of customers, audiences even corporate events. It
helped the Cirque to turn its declining profits, revenues to the escalating profits and
even double its sales. It even aims to hire the excellent actors, professional’s artists to
provide excellent high quality of service to all its esteemed viewers. Lastly, it aims to
cover up Sydney, Tokyo, and other cities too across the globe (Cirque du soleil, 2016).
Additionally, there was an innovation made to motivate its artists, employees to perform
better. Cirque started providing various comforts such as luxurious foods, transportation
facilities. It even took measures to provide a close-knit, safe, and friendly environment.
Since the artists need to travel at various placed across the globe so, it even took the
steps to make their tours by making all the necessary arrangements required by the
individuals. To provide comfort and healthy environment in the Cirque helped it to retain
its employees as it started facing the problem of employee migration made by its
competitors (Taran et al. 2015, p.310).
Evaluation of the innovation and the entrepreneurial opportunities
Cirque du Soleil is stated as the captain in the entire entertainment industry by changing
the definition of the circus entertainment. It raised the standards and even changed the
attitude of the people towards the entertainment .The change in attitude was caused
due to its accustomed strategies, newly set innovative methods and delivering the
excellent performances through its artists (Rantisi and Leslie, 2015, p.408).
Despite its excellent success, fame, brand name in the entertainment industry, there are
various challenges faced by it. One of the most important challenges that are faced by
Cirque to become loyal to its own stated principles referred as global citizenship. These
principles were established on the various important matters of concern such as art,
entertainment, developing business, for the betterment of the society (Leroux, 2014,
p.27). Then there were various challenges of international expansion that came when
Cirque decided to expand its operations in various important cities. There were even
various economic challenges that were faced by the Cirque at several times. The major
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crisis was when the economic challenges resulted in various consequences. The
consequence such as a heavy drop of revenues was seen. The drop in the revenue was
also due to the increase in the costs of the production, even the crisis faced by the
economy, as an overall was a result in a drop of the revenues. When at the times of
recession, the people opted for other forms of entertainment apart from the circus, as a
circus is often been seen and considered as one of the luxury times.
Even due to the increase in the production costs that lead to the increase in the price of
the tickets, this ultimately has to be borne by the audience.
In order to overcome all the above-stated problems necessary steps must be taken by
Cirque to maintain its position and even to achieve higher levels of success.
The necessary steps that the Cirque must take are to decrease its production cost first.
For that, the Cirque must innovate new and spectacular ideas as it helps to identify the
appropriate people as artist’s .It could even find various cost effective training methods
to provide training at a cheaper rate.
The management must even come forward with new innovative techniques as the
Cirque is all about the creativity and innovation. The repetition of the things will not
work, as people will gradually at a certain point of time does not show any interest in
watching their performances any further. Thus, to sustain the audience an interest has
to be created with the help of the new themes, new innovative concepts like a
combination of dance art and music performances should be followed. Even
introduction of the aerial acrobatics and introducing the young talented people as artists
can turn out to be a very beneficial step for the organization.
Various entrepreneurial opportunities can even be created for the masses by the Cirque
du Soleil that will benefit both the company and the fresh talents in the long-run.
5.1 b)
Blue ocean strategy also called as market space strategy and is used in many
industries. In this strategy, demands are created in the market rather than competing
over the existing demands. It offers systematic and reproducible methodologies in
regards to innovation for both the new and old firms. Its aim is to create a new market
for the given industry thereby making competition between same industries completely
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irrelevant (Arboleda and Gonzalez, 2016). It makes the relation between value and cost
completely irrelevant. There is a presence of simultaneous pursuit of differentiation and
cost. Many beverages, electronic and entertainment industry uses blue ocean strategy.
Blue ocean strategy reconstructs the market boundaries.
Application of Blue Ocean Strategy in analyzing the success factors
of Cirque du Soleil:
Cirque du Soleil developed such a market, which not only helps to mitigate the losses
and increase the profit but also avoid competition from rivals and competitors. The
entertainment company developed market space strategy also known as the Blue
Ocean strategy. This strategy is helpful for Cirque to du Soleil as it creates demands for
this entertainment company rather than to compete with the other entertainment
industries (Kim and Mauborgne, 2016, p. 53). Cirque du Soleil started focussing on the
greater picture of goals and not the numbers. The business started focussing more on
alternatives and noncustomers over competitors and customers. This, in turn, leads to
the generation of more profit for Cirque du Soleil.
Cirque du Soleil first eliminated the three separate rings, star performers, and the
animals. This was required to create a new market. It then reduced the thrill and danger,
which are associated with conventional circuses (Tait, 2016, p.175). The entertainment
industry started to hold performances in new venues and thus increased the uniqueness
of venues by developing their own tents and camps. Cirque du Soleil started dramatic
themes, artistic music and dance. This was done along with the inclusion of more
upscale, refined environment. The entertainment company reduced the importance of
animals and individual stars and completely started a new form of entertainment that
combines dance, music and gymnastic skills to create entertainment among the
audience (Kim and Mauborgne, 2016, p 53).
The Blue Ocean strategy has overcome the key organizational hurdles of Cirque du
Soleil. The hurdles of Cirque du Soleil were the merciless competition between its
competitors, pressure from animal activists and star performers and growing expenses
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for the existing entertainment systems (Massé, 2016, p. 83). These organizational
hurdles were becoming an obstacle in the path of Cirque du Soleil. The business also
made its execution steps into the building of strategy. Cirque du Soleil has reached
beyond the demands of the entertainment industry. There has been the increase in
demands from sporting events to home entertainment of Cirque du Soleil after applying
the Blue Ocean strategy.
Figure 2: Blue Ocean Strategy
(Source: Created by author)
The Cirque du Soleil had gone for the largest catchment of noncustomers. This is done
by performing three steps (Trudelle et al. 2016, p.24). Firstly, it had started exploring the
audience and customers who are in the distant markets or audience who are living in
other continents and countries. Secondly, Cirque du Soleil refused the non-audience
who are specifically against the business, constantly promote their competitors, and
constantly demote Cirque du Soleil (Lang et al. 2016, p.44). Lastly, it has more
focussed on the non-audience who are ready to jump to Cirque du Soleil. The focus of
this entertainment company on noncustomers has led to the success of the business.
The Cirque du Soleil has followed the principle of value innovation. This principle has
helped to drive the cost down while significantly drive the value up for buyers. The
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increase in a value of audience has made the success of Cirque du Soleil easier. The
strategy canvas and ERRC grid are the two most important tools used in Blue Ocean
strategy in Cirque du Soleil. Strategy canvas is the representation of different factors
used by the competitors and to how much degree (Cluett et al. 2016, p.78). This helps
Cirque du Soleil making decisions about considering factors, which are not used by
other businesses. It also helps in creating new markets.
For instance, if star performer is used by some other entertainment business in very
high degree then Cirque du Soleil then not use star performer and focus on some
other factor like some sporting event. It represents a graphical representation of
strategy (Berg, 2016, p.22). Based on the strategy canvas Cirque du Soleil could decide
what factors are needed to be created, which factors are to be eliminated, which factors
are needed to be raised and reduced. The business then could invest in the creating
factors, raising factors and reducing factors. ERRC grid is another important tool, which
is being used in Cirque du Soleil, is same as the strategy canvas graph. The only
difference is that the factors, which are needed to be worked on are placed in a grid
view rather than graph view.
Cirque du Soleil has effectively formulated the blue ocean strategy. The strategy is
involved in three steps. They are awakening, exploration and strategizing. The
awakening stage involves the analysis part or finding which factors different
entertainment competitors less use. Exploration determines the reconstructing the
market boundaries (de Oliveira, 2016, p.22). This involves the creation of new demands
and agreeing to one or more than one divergent groups. The last stage involves the
strategizing canvas and is used to list the various factors on the graph.
Cirque du Soleil has followed six different ways to reconstruct the market boundaries.
These are across time, alternate industry, buyer and strategic groups, functional-
emotional orientation and across complementary scope of products and services (Viana
and Muniz, 2016, p.29). It basically involves different products and services having the
same purpose but different functions and forms like star performers and sporting
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events. These have the same purpose of entertainment in Cirque du Soleil but are
different in its functions and forms. The second way to reconstruct market boundaries is
among different strategic groups. It includes entertainment companies competing with
Cirque du Soleil who poses the same blue ocean strategy for audiences.
The third comparison is between is among buyer groups who are directly or indirectly
involved in buying decision. The audience of the Cirque du Soleil is involved in paying
money for the tickets and are in the same buying groups. The audiences who have
come to Cirque du Soleil and watched the show or performance make some solutions
or perception in their mind. They could decide whether or not their paid is worth it (Tait,
2016, p.175). The entertainment industry Cirque du Soleil appealing to the people also
matters the most. The appealing to the people is whether rational or emotional. How the
view of the audience in entertainment has changed over time has also led to the
success of Cirque du Soleil.
Conclusion
It can be inferred from the following assignment that the main accelerators of innovation
and entrepreneurial opportunities contributing to the success of Cirque du Soleil are
Blue Ocean Strategy. A brief overview of Cirque du Soleil is also concluded. The
different steps involved in the process of the success of Cirque du Soleil are also
discussed. The assessment of the factors in which Cirque du Soleil has worked during
Blue Ocean strategy is also discussed. In this overview, the complete history the
complete description of the Blue Ocean Strategy will also be discussed. The success of
the Cirque du Soleil due to the successful implementation of the Blue Ocean Strategy
will also be reviewed and critically analyzed. Along with this, the journey from failure to
success of Cirque du Soleil will also be told.
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