ASSIGNMENT: Le Cirque du Soleil
NAME: EMMANUEL RUBEN IGHOBUNOR
CASE A: Question 1
To assess the attractiveness of the circus industry in the early 1980s there are different factors that have
to be looked at. One has to look at the level of competition in the industry. An attractive industry is that
which the level of completion is not too much especially price completion. If there are too many circuses
already in the market potential new entrance may find the market to be unattractive. Another factor to
consider is the level of demand of circus entertainment. The demand of the product has to be high or
increasing for the market to be labeled as attractive. If the demand is low and there are niche markets to
be exploited, then potential entrants might also not want to be part of the market as it might not be
profitable. The audience of circus entertainment is quite key when measuring the attractiveness of the
circus industry.
To assess attractiveness in this industry one can also look at the revenues and costs the organisations
already in the business are incurring. Attractive industry usually shows the opportunity of incurring
lower costs and higher revenues. This obviously goes back to issue of profitability. The availability of
skilled personnel is also quite key. Like in any industry skilled personnel always make a difference. If it is
difficult to find people who can juggle, train animals and do all the other acts then the industry may
prove to be too difficult to operate in. Regulations are also another factor to consider. If the regulations
are too strict that can turn away potential entrants. Animal regulations and labour regulations should be
strict enough to protect workers but also light enough to attract other firms in the market.
From my industry analysis I can conclude that the industry is quite attractive because of the large
amounts of people who enjoy circus entertainment. There is not a lot of competition going on but
however the new entrants that might come in should come in with a wider variety of acts since this
industry is facing a lot of competition from other industries like the film industry. However, the industry
is still attractive especially if the potential entrances have a wider variety to offer to the audience.
CASE B: Question 2.
Tradition circuses competed on offering animal shows, hiring star performers, presenting multiple show
arenas in the form of three rings, and pushing aisle concession sales. The traditional circus came down to
only three key factors which were the tent, the clowns, and the classic acrobatic acts such as the
wheelman and short stunts. Traditional circuses also focused on benchmarking one another and
maximizing their share of already shrinking demand by tweaking traditional circus acts. This included
trying to secure more famous clowns and lion tamers, a strategy that raised circuses’ cost structure
without substantially altering the circus experience.
CASE B: Question 1:
Even though there was a change from the conventional way of operating circuses Le Cirque has kept
some factors in its operations. One of the factors that has been kept is the concept of being mobile. In
the early years of circus entertainment there has always been the concept of reaching out to audience in
different locations. This has helped to build the brand of organization and have contributed to increased
profitability. Le Cirque has also kept the concept of having the blue yellow as the symbol of a circus. The
usual acrobatics, jugglers and clown that forms much of the show’s content have been kept. Also the
acts take place on the stage as usual but the arrangement has been changed.
Le Cirque keeps a traditionally large source of circus revenue, concessions at arm’s length. The main
focus was always to try a get more audience so that the revenue levels may be increased. Even the
changes made were to ensure that revenues continue to rise. Some of the above factors were
downplayed and some were up played. For example, the concept of being mobile was up played. They
came up with even new ways of improving tours as they moved locations. Another factor that was up
played was marketing and trying to increase revenue and profitability by improving the brand. The thing
that was downplayed was the focus on the acts but rather more focus was put on the themes.
CASE B: Question 2:
Cirque du Soleil revolutionized the circus industry by eliminating several traditional elements
and introducing new ones. Some of the factors completely eliminated by Cirque du Soleil
include:
1. Animal Acts: Unlike traditional circuses that heavily relied on animal performances,
Cirque du Soleil eliminated the use of animals in its shows. This decision was driven by a
desire to focus on human creativity and artistic expression rather than exploiting animals
for entertainment.
2. Conventional Circus Tents: Instead of performing under traditional circus tents, Cirque
du Soleil opted for permanent or semi-permanent venues, such as theaters or custom-built
structures. This move allowed for greater control over production quality, comfort for
audiences, and the ability to stage more elaborate and technically complex performances.
3. Narrative Storytelling: Traditional circuses often relied on simple narratives or themes
to connect various acts. Cirque du Soleil introduced more elaborate and abstract
storytelling techniques, using music, dance, and visuals to convey emotions and themes
without relying on spoken dialogue.
4. Traditional Circus Roles: Cirque du Soleil blurred the lines between circus disciplines
by combining elements of acrobatics, dance, theater, and music into cohesive
performances. This departure from traditional circus roles allowed for greater artistic
expression and creativity among performers.
The operational and financial implications of these eliminations were significant:
1. Creative Freedom: By eliminating traditional constraints, Cirque du Soleil gained
greater creative freedom to explore new concepts and push the boundaries of circus
performance. This resulted in highly innovative and visually stunning shows that
attracted audiences worldwide.
2. Production Costs: While Cirque du Soleil's productions were renowned for their high
production values, the elimination of animal acts and traditional circus tents may have
initially resulted in higher upfront production costs. However, the company's ability to
attract larger audiences and command premium ticket prices offset these costs over time.
3. Market Differentiation: Cirque du Soleil's unique approach differentiated it from
traditional circuses and other forms of entertainment, allowing it to carve out a niche
market and attract a more diverse audience demographic. This differentiation was a key
factor in the company's long-term success and global expansion.
4. Brand Image: The elimination of animal acts and other traditional elements helped shape
Cirque du Soleil's brand image as a forward-thinking and socially responsible
entertainment company. This reputation enhanced its appeal to audiences and contributed
to its brand equity.
CASE B: Question 3:
Cirque du Soleil introduced several innovative elements to the circus industry, setting itself apart
from traditional circuses. Some of the factors newly created by Cirque du Soleil include:
1. Artistic Fusion: Cirque du Soleil combined elements of circus arts, theater, dance,
music, and multimedia to create immersive and visually stunning spectacles. This artistic
fusion appealed to a broader audience beyond traditional circus-goers.
2. Original Music Scores: Cirque du Soleil commissioned original music scores for each of
its productions, collaborating with renowned composers and musicians to create unique
soundtracks that complemented the themes and visuals of the shows.
3. High Production Values: Cirque du Soleil invested heavily in production values,
including elaborate costumes, intricate set designs, advanced lighting and sound systems,
and state-of-the-art special effects. This commitment to quality and innovation elevated
the audience experience and set a new standard for circus productions.
4. Storytelling without Words: Cirque du Soleil developed a distinctive narrative style that
relied on visual storytelling, music, and movement to convey emotions and themes
without the need for spoken dialogue. This approach allowed for greater accessibility and
appeal to international audiences.
The operational and financial implications of these newly created factors were significant:
1. Creative Excellence: Cirque du Soleil's emphasis on artistic excellence and innovation
elevated the circus industry to new heights, attracting top talent from around the world
and inspiring a new generation of performers and creators.
2. Premium Pricing: The unique and immersive nature of Cirque du Soleil's shows allowed
the company to command premium ticket prices, resulting in higher revenue per attendee
compared to traditional circuses.
3. Global Expansion: Cirque du Soleil's innovative approach to circus entertainment
resonated with audiences worldwide, enabling the company to expand its reach to new
markets and establish a global presence. This expansion fueled revenue growth and
solidified Cirque du Soleil's position as an industry leader.
4. Brand Loyalty: By delivering consistently high-quality and innovative productions,
Cirque du Soleil built a loyal fan base and strong brand loyalty. This loyalty translated
into repeat business and word-of-mouth recommendations, further driving ticket sales
and revenue.
5. CASE B: Question 4:
Cirque du Soleil creates superior profits through a combination of innovative strategies and
business practices:
1. Premium Pricing: Cirque du Soleil commands premium ticket prices for its unique and
high-quality productions. By offering a one-of-a-kind entertainment experience that
blends circus arts with elements of theater, music, and dance, Cirque du Soleil creates
value for its audience, allowing it to justify higher ticket prices.
2. Brand Equity: Cirque du Soleil has built a strong brand with a reputation for creativity,
excellence, and innovation. This brand equity enables Cirque du Soleil to attract a loyal
fan base and command premium prices for tickets, merchandise, and other offerings.
3. Global Reach: Cirque du Soleil has expanded its presence internationally, staging
performances in major cities and tourist destinations around the world. This global reach
allows Cirque du Soleil to tap into diverse markets and audiences, driving ticket sales and
revenue growth.
4. Diversification of Revenue Streams: In addition to live performances, Cirque du Soleil
generates revenue through merchandise sales, licensing agreements, television specials,
and digital content. By diversifying its revenue streams, Cirque du Soleil reduces its
reliance on ticket sales and mitigates risks associated with fluctuations in attendance.
5. Operational Efficiency: Cirque du Soleil focuses on optimizing its operations to
minimize costs while maintaining the quality and integrity of its productions. This
includes efficient procurement, logistics, and resource management practices that help
reduce expenses and improve profit margins.
6. Innovative Marketing: Cirque du Soleil employs innovative marketing strategies to
promote its shows and engage with audiences. From captivating advertising campaigns to
social media activations and experiential marketing events, Cirque du Soleil creates buzz
and excitement around its brand, driving ticket sales and revenue.
Cirque du Soleil has played a significant role in improving industry growth and generating
greater revenues in the entertainment sector through several key strategies:
1. Innovation and Differentiation: Cirque du Soleil continuously introduces innovative
concepts and productions that differentiate it from traditional circuses and other forms of
entertainment. By combining circus arts with elements of theater, music, dance, and
technology, Cirque du Soleil creates unique and immersive experiences that appeal to a
broad audience demographic. This innovation drives industry growth by expanding the
market for circus entertainment and attracting new audiences.
2. Expanding Market Reach: Cirque du Soleil has expanded its presence globally by
staging performances in major cities and tourist destinations around the world. This
global expansion introduces circus entertainment to new markets and audiences, driving
industry growth and increasing overall demand for live performances.
3. Diversification of Offerings: In addition to live performances, Cirque du Soleil
diversifies its revenue streams through merchandise sales, licensing agreements,
television specials, and digital content. These ancillary revenue streams not only
contribute to greater revenues for Cirque du Soleil but also support industry growth by
expanding the reach and accessibility of circus entertainment to a wider audience.
4. Strategic Partnerships and Collaborations: Cirque du Soleil collaborates with
corporate sponsors, brand partners, and venue operators to enhance its productions and
reach new audiences. These strategic partnerships can involve co-branding, cross-
promotion, and revenue-sharing agreements that drive industry growth and generate
greater revenues for all parties involved.
5. Investment in Talent and Infrastructure: Cirque du Soleil invests in recruiting and
training top talent from around the world and developing state-of-the-art infrastructure
and production capabilities. This investment not only ensures the high quality and
success of Cirque du Soleil's productions but also raises the overall standards and
reputation of the circus industry, driving industry growth and attracting new participants
and investors.
Cirque du Soleil employs several strategies to raise profitability and reduce its cost structure:
1. Operational Efficiency: Cirque du Soleil focuses on optimizing its operations to
minimize costs while maintaining the quality and integrity of its productions. This
includes streamlining processes, improving resource allocation, and enhancing
productivity across all aspects of the business, from production and logistics to marketing
and administration.
2. Technology and Innovation: Cirque du Soleil leverages technology and innovation to
improve efficiency and reduce costs in various areas of its operations. This includes
investing in state-of-the-art production equipment and technologies, as well as
implementing digital solutions for ticketing, marketing, and customer relationship
management.
3. Strategic Procurement: Cirque du Soleil strategically manages its procurement
processes to negotiate favorable terms with suppliers and vendors, thereby reducing
purchasing costs and improving profit margins. This may involve consolidating
purchasing volumes, sourcing from low-cost suppliers, and implementing efficient supply
chain management practices.
4. Resource Optimization: Cirque du Soleil optimizes its use of resources, including
human resources, materials, and facilities, to minimize waste and maximize efficiency.
This may involve cross-training employees, implementing flexible scheduling, and
optimizing the utilization of performance venues and production assets.
5. Revenue Diversification: Cirque du Soleil diversifies its revenue streams beyond ticket
sales to reduce reliance on a single source of income and mitigate risks associated with
fluctuations in attendance. This may include generating revenue from merchandise sales,
licensing agreements, television specials, digital content, and other ancillary sources.
6. Cost Containment Measures: Cirque du Soleil implements cost containment measures
to control expenses and improve profitability. This may involve setting budgetary targets,
monitoring spending closely, and implementing cost-saving initiatives across all areas of
the business.
Overall, Cirque du Soleil's ability to raise profitability and reduce its cost structure is driven by
its focus on operational efficiency, technology and innovation, strategic procurement, resource
optimization, revenue diversification, and cost containment measures. By implementing these
strategies, Cirque du Soleil can maintain its position as a market leader in the entertainment
industry while maximizing profitability and shareholder value.
