Cirque du Soleil is a Canadian entertainment company which was created in 1984 by a group of young street performers. Daniel Gauthier and Guy LaLiberte are the founding Co-Presidents of Cirque du Soleil who self-described the company as a mix of circus arts and street entertainment and reinvent the circus industry from then on. 1. What are the key factors kept by Le Cirque? Which ones are downplayed and which ones were played up? Since Le Cirque is a circus company, it kept existing traditions of the circus such as the circus arts, featuring jugglers, trampolinists, trapeze artists, teeterboard virtuosos and, of course, clowns. Soleil combined elements of dance, circus and opera to keep its artistry, but the proportion of fun and humor in the whole show was decreased. Further, due to the increase of thematic line and the lack of a ringmaster announcing the acts, the individual performers are downplayed. Each of them now acts one of the roles to develop the overall thematic element and their names are not showed in the cast list. In other words, big name acts have no place in Cirque du Soleil. Soleil keeps tents and concessions.
As a traditionally large source of circus revenues which around 20% at the Ringling Brothers& Co. shows, Soleil only gains less than 10% of revenues from it. Compare with earning some of money from selling food and toys during the performance or inside the tent, Soleil preferred the performance-centered ethic of the troupe since the performances and themes are utterly unique. Sponsorships are an important source of revenue for Soleil. Soleil can mention the sponsors in the playbill, advertising and banners around the tent. The last key factor kept by Le Cirque is retaining the show on tour. Soleil plays it up by permanently perform three shows in Las Vegas and Disney World. 2. Which factors were totally eliminated by Le Cirque and what are the operational and financial implications? Soleil changed the multiple show arenas which is known as the three-ring venues for the following reasons. In order to overcome the visual distance from the audience, the clowns paint face garishly and wear oversized shoes which probably frightening to the small children in a closer distance. Also, this format required more performers for each venue which definitely increase the cost. The aisle concession sales were totally eliminated for the reason I mentioned above.
The most striking differences of the Cirque du Soleil from the traditional circuses are the complete absence of star performers and animal shows. The animal acts are known as the most expensive cost for a show since the animals for circuses are frequently owned by their trainers and only leased to the show. Further, there are the fee for the services of the animals and its trainer, transportation as well as training. 3. Which factors were newly created by Le Cirque, and where do you think the inspiration came from? First of all, combination of traditional circus and street entertainment are the core created by the company. Second, a thematic line and storyline are manifested throughout the show in all kinds of ways. The creative teams at Cirque du Soleil would choose a theme first and then build a show to suit. It is more like an opera in this way and provides a high quality, seamless and fulfilling entertainment experience for audience. Third, by choosing distinctive themes, the company can create multiple productions which can enhance the reflux rate of the audience. For example, Cirque du Soleil has the shows named Mystere, La Nouba, Dralion, ‘O’ and Quidam. Four, an artistic original music and dance with ‘magic’ lighting and timing effects bring the audience visually feelings. The inspiration comes from mixing elements from circus, opera, music, dance and theatre as well as quit some aspects from traditional circuses, Laliberte actually reconstructed elements and the form of circus to a sophisticated entertainment. By doing so, Soleil is able to sell the tickets at a higher price to all aged audience instead of discounted tickets to children. It has raising the circus to a new scale and expanded target audience. As the circus historian Fred Pfening asks, “But is it circus?”(Williamson, 2000) Laliberte, probably, want to do something utterly unique and irrelevant or rather he just hope to help young people to express their dreams. 4. How does Cirque du Soleil create superior profits? How does it improve industry growth and generate revenues? How does it raise profitability and reduce its cost structure? Cirque du Soleil create superior profits by reinventing the circus industry and creating an uncontested market space.
More professionally, it move from red ocean strategy to blue ocean strategy. Same as the traditional circus, the great majority of revenues for Soleil are form ticket sales. However, it redefied circus industry and target audience as I mentioned above to sell tickets higher with full face value. It actually make the competition irrelevant. By creating diversified themes and high quality performances, Soleil remains the highest seat occupancy with approximately 85%-95% in the industry. Further, from Exhibit 2 we can see the amount of attendance jumped rapidly to almost 6 million from 1990 to 2000. The themes were also increased from one to six. Soleil creates and captures the new demand of the audience. Sponsorships play a low-key but important role in Soleil’s profits. A main sponsor guarantees a gate to the circus and is able to sell the tickets independently. Besides, three permanent shows hold frequently in the places with large potential customers, such as Las Vegas. Orlando and Disney World. The way of choosing the locations are changed. Obviously, the combination of these tourist cities and the fantastic shows is a creative idea to attract plenty of audience. Therefore, we can see the form Exhibit 1 that the major circus revenues increased rapidly to catch up with Feld Entertainment from 1993 to 2000. The most importantly, Soleil follows the different strategic logic called value innovation. It is the cornerstone of the blue ocean strategy since it break the value-cost trade-off. The definition for it is the simultaneous pursuit of differentiation and low cost, creating a leap in value for both buyers and the company (Blue Ocean Strategy, 2013). In this case, Soleil pursue the differentiation and lift buyer value by reinvent the industry and create many new factors as I mentioned in question 3. In addition, it eliminated animal acts and star performers to reduce the cost. Unlike the Irving Feld who expends a lot to add trill and danger, Soleil reduced these to save money for company. In conclusion, Cirque de Soleil realized if it wants to be succeed, it must stop compete with each other and to create a new market. According to the four action framework, the company find out the specific changes it should take. By breaking the market boundaries of circus and theater and reconstruct all the elements, Soleil achieved both differentiation and low cost or rather value innovation. It breaks the value-cost trade-off and create new best-practice rules under the blue ocean strategy. In general, it is not circus. It is Soleil.
Blue Ocean Strategy (2013). Value innovation.
http://www.blueoceanstrategy.com/concepts/bos-tools/value-innovation/ Williamson,M. (2000) Even a Clown Can Do It: Cirque du Soleil Recreates Live Entertainment.