Cirque Du Solleil- Strategic Management Essay

Executive Summary corrie du Soleil is an entertainment tighten from Montral, Canada and was founded in 1984. The company started as a sm altogether vocation and gradually grew into a successful government dallyivity with an established presence in the entertainment manufacture. This overcompensate deals with the ways in which the arranging became successful. Therefore, it is necessary to analyse contrastive factors. The first of all federal agency enumerates the s trainholders which contribute profits for cirque du Soleil. Conversely, this section lead offer the considerations the plaque must take into account for the welf atomic number 18 of its stakeholders. The second severalise illustrates the shapings whimsicalness and how they differ from their competitors, which is a result of some(prenominal) innovations and trading strategy. In the last part, the electric charge statement willing be illustrated and discussed. Analysis of the mission statement will show the principles, philosophy, and beliefs that take senior full(prenominal) priority for their furrow. Furtherto a greater ex encamp, suggestions for the future will be listed.1.Stakeholders & the success of corrie du SoleilA stakeholder is a person or a group who has an input in an organisation. It piece of ass affect the graspment of companys objectives, activities and the behaviour of its member. (Mullins, 2005163)1.1. cirque du Soleils stakeholderscwm du Soleil, same all other organisations, has many stakeholders which include managers, employees, clients, government, etc. Every stakeholder has its particular interests to support an organisation.1.1.1.ManagersManagers have particular interests in an organisation e.g. in job security, size and growth of the organisation or prestige. (Mullins, 2005 164) Additionally, the managers reach out a self fulfilment because they have move prospects due to the change of jobs e.g. in environment issues. (cwm du Soleil, 2012) Hence, the managers argon able to learn different stages of feat and in any case have job possibilities in non-carnival work.1.1.2.EmployeesLike managers, employees have interests in job security and in learning because the shows argon always differentiated. Therefore, employees potbelly also invite a self fulfilment. It is believed that employees salary is preceding(prenominal) the average carnival industry salary because the shows are upscale and successful. Thus, employees can build up a record and also expand rush options e.g. by retraining for a second career or by changing the industry like transitioning to musical theatre for example. ( corrie du Soleil, 2012)1.1.3.CustomersThe customers of Cirque du Soleil are the audiences and they are of prime importance for the organisation. The benefit that Cirque du Soleil gives to the audience is an pass from the stress of their daily lives. In other words, they can get onward from it all for a short while. The audience gets a rumm y go out from the spectacular performance. delinquent to the multiple shows, customers may come browsely which kneads conk possibilities because the organization is touring round the world. An adult experience can be complete due to the fact that the show is to a greater extent elegant and rich than flash like in a traditional circus. (Pawar, 2007 8-10)1.1.4.GovernmentThe governments take in suspensoring the organisation might be to enhance their image. curiously for tourism, the organisation work out governments cultural offering. Therefore, a upstart bulls eye group can be achieved e.g. those who are non evoke in historical sights. As a result, this benefit supports the local anesthetic industry due to taxes. Hence, the city can pursue other projects like the expression of parks as public service. Cirque du Soleil has an agreement with the Government of Canada to mete out 25 years with entertainment to support the cultural program in Canada. (Canadian Heritage, 2010)1.1.5.Suppliers & DistributorsSuppliers and distributors are committed in long condition kinships with Cirque du Soleil and pay off prestige to the stakeholders due to frequent orders and demand. It may also be possible that the stakeholder gets invigorated customer groups due to references.1.1.6.Investors & SponsorsFor these groups, cooperating with Cirque du Soleil brings a prestige to thelocals. In the case of Arab investors, the cooperation brings crease in tourism, regional development and support for the local industry. Dubai firms bought 20% of Cirque du Soleil which brought profit. Last year 10000 visitors watched Cirque du Soleils performances and the company owns a stake in casinos where Cirques shows are shown. (The star, 2008) Sponsors fatality to enhance their image and in access, get newfound nates groups. Besides, return on investment is a benefit for sponsors. Nevertheless(prenominal), sponsors are a low key stakeholder because they also use the event for fundraising opportunities. (De Wit, 2004 931)1.1.7.CommunityThe province of Quebec and its confederacy share almost the same interests as the government. Quebec wants to enhance their image and enlarge their cultural offering and in doing so, hope to achieve new target marts. The global community looks for funding and developing e.g. for projects like charity. Cirque du Mond is a special project for youth who have HIV or victims of inner violence. Cirque offer them full treatmenthops to express themselves. (Cirque du Soleil, 2012)1.2.Stakeholders & fiscal performanceThe aforementioned(prenominal) stakeholders bring their expectations to the organisation and the organisation tries to fulfil their expectations which may simultaneously lead to the organisation accomplishing its own goals. If the requirements and expectations are r individuallyed, in high spirits performance can be achieved. (Manowong, 2010 131) 1.2.1.Superior fiscal performance through serving stakeholders int erests In the interests of the stakeholder, managers will be rewarded for their performance. When expectations are met, managers build commitment and loyalty and thus, cause a positive parting from each member of the organisation. This in turn, demeans the cost for recruitment and training.Satisfied employees deliver inputs for creativity for new shows. If they perform excellently they can bring more possibilities in creating new and spectacular acts. Hence, break-terpsichore shows can be offered. As a result more fines can be sold for high prices which lead to high turnover and profits. Furthermore, new target groups can be tapped into by curling those whoare watching the shows for the first time out of curiosity.By giving the audience unique experiences of its shows, Cirque may receive frequent and repeated backup. As a result, and similar to the effect that employees have on the organisation, the audience brings the organisation turnover and profit due to high ticket sales . (Kim, 2005 15)The government supports the organisation. One example can be given from 1985 where Cirque du Soleil was in debt. The Quebec government granted funds to the organisation to sustain their business which brought the organisation slowly back into a stable condition. (Pawar, 2007 4)Due to long-run relationships to suppliers, the stakeholders build trust after a long collaboration. As a result, the stakeholder supports the organisation with lower and better prices.Concerning investors, they support Cirque du Soleil with projects for example. Therefore, Cirque du Soleil has lower financing cost and has a better financial reputation and position. Cirque du Soleil attracts investors and thus, they have a financial backup. (TheStar, 2008)Through the community, Cirque du Soleil achieves a reputation e.g. by giving tickets to charitable organisations. Having a positive impact on the greater community and society in general can help Cirque boost their ticket sales. (Pawar, 2007 9) incarnate societal responsibility became chief(prenominal) where companies take responsibility towards community and environment and operate in social and ecological aspects. As a result, the organisation may increase customer retention, enhance relationships (customer, supplier) and differentiate from competitors. (Sims, 2003 43-44)1.3.Serving stakeholders interests through pukka financial performance level-headed financial performance of Cirque enables the organisation to better serve the stakeholders in more ways than simply revenues and profit. As a consequence of superior financial performance, a further aspect is important to how Cirque du Soleil satisfies their stakeholders. Due to the highturnover and profit in business, better shows are offered where the spending is spent on modern technology or venues. Suppliers are charged with new tasks and build trust. Besides, the bigger the company size, the bigger the orders because the company may have the ability to manag e the delivery.Hence, the studios get sellers attention. (Hollensen, 2005 296-297) Additionally, better training can be provided for employees in circus school and career transition program support artists when they step out of the organisation. Furthermore, Cirque du Soleil offers their employees wellness benefits like medical exam plan and travel benefits due to shows in different countries. (Cirque du Soleil, 2012) Communities can be provided with new projects beside environment issues like environmental pollution. consort to Cirque du Mond Cirque du Soleil can provide new projects. So anyway Africa and Australia they could also operate in Asia. (Cirque du Soleil)2. available innovations at Ciruqe du SoleilOperational innovation is most creating new ways in business e.g. in new projects or providing customer service to achieve success. Consequently, success is not only ground on the working performance of a company. (Hammer, 2004) 2.1.Operational innovations & the unique Cir que experienceCirque du Soleil distinguishes themselves from traditional circuses by eliminating and adding factors. (Kim, 2005 36)EliminateStar performance wolf showsAisle concession salesMultiple show arenas3 ringsRaise incomparable venue + Touring locationReduceFun and humourThrill and dangerCreate root word + Multiple showsRefines environmentMultiple productionsArtistic music and dance medicament first than showsProduction e.g. film, TV, retail, merged showsUnique combination of performing actTable 1 Eliminate- Reduce- Raise- Create Grid (Source by Kim, 2005 supplemented by author)Furthermore, it is verbalize that less successful companies followed inveterate strategical logic and successful companies use value innovation. Value innovation differs from the basic strategy and does not strain on rivals. It focuses more on the values customers have in greenalty and new processes. (Kim, 1998 25-26) Moreover, by eliminating certain elements, costs can be bring down e.g. by c ut down advertising because value innovation causes word-of-mouth. Thus, a part of differentiation is also value at a lower cost. (Kim, 1998 28-30) As illustrated below (see Figure 1), the key factors for the value curve are focus, dissimilarity and a compelling tagline to achieve and exceed the value for both buyers and the organisation which Cirque du Soleil manages to do. Evidently, it is shown in Strategy Canvas that Cirque du Soleil differs from other competitors. The funfair Ringling Bros. and Barnum & Bailey Value Curves are similar to a traditional circus and Cirque du Soleil is the total opposite of it through alternatives with new factors. (Kim, 2005 37-41)Proceeding on the assumption, the useable innovation leads to value innovation and as a result, those unique strategies much(prenominal) as new concepts and process become unique experiences. (Waltz, 2003 86) For example they attract audiences with lighting effects, original music and new and appealing costumes. (Pa war, 2007 4)In general, a mature industry has a greater chance of success and rewards than industries which calculate profitable because mature industries have agreater creativity in business and higher level of innovation. Customers are especially attracted by the creativity of industries which can cause unique experiences. These industries are also difficult to postulate because of the commercialize niche they create. (Baden- Fuller, 1992 18) These criteria fit Cirque du Soleils business precedent and is carried out by its Blue Ocean strategy in which the organisation builds a new and uncontested market which made the competition extraneous due to creative innovations. (Kim, 2005 4&18)2.2.The influence of operational innovations on the financial dynamics of Cirque du Soleil Financial dynamics reflect results of an organisations decisions which are important for the cash flow. Increasing the productivity means not reducing costs. Nevertheless, it creates options which may lead to turnovers. The effect of increasing output or input may enhance profit for the business. (Yu- Lee, 2002 136&138) In general the circus industry comprises high costs and most of the circuses incur increasing costs without rising revenues. (Kim, 2005 13) base on the innovation in 2.1 the author identifies the reducing cost and the turnover due to the organisations elimination and addition of elements which lead to profit.2.2.1.TurnoverCirque du Soleil has various factors which attract customers and leads to turnover. For example, they have unique venues with at rest seats instead of hard benches like in traditional circus. (Kim, 2005 15) Cirque du Soleil started to perform in different continents like Asia and Europe and plurality all over the world have the chance to take part in the events. Moreover, the organisation creates themes which have shamive storylines and multiple shows with new acts. Additionally, artistic dance and music make it more unique. A special feature of t he shows is how they create music first and then adapt the acts to the music. All in all, the unique entertainment created a new form of entertainment and combined circus art with theatre and concert dance. (Pawar, 2007 3-6)This generates turnover because creativity causes a great ambiance and introduces an intellectual element into the shows which impress audiences and increase demand. (Kim, 2005 15) In general, Cirques shows are sold out or well frequented with occupancy of85-95%. (Williamson, 2004 931) By other ventures like audio, videos, t-shirts and masks Cirque can increase their revenue. (Pawar, 2007 3) In addition, less than 10% of revenues come from concessions at shows. nonhing is sold inside the tent and also not during performances. Therefore, Cirque du Soleil offers VIP packages which include food in a separate tent. Hence, the customer can get better beverages for a higher price. (Williamson, 2004 931)2.2.2.Reducing CostReducing costs are achieved by importantly eli minating elements. By eliminating circus animals reduce one of the most expensive expenditures. This consists of training, insurance, medical care and transportation, and transportation expenses are especially costly because Cirque du Soleil tours just about the world. Moreover, star performances in traditional circuses are expensive and Cirque does not include these performers in its programs. Instead of three-ring venues Cirque reduces it into one which reduces e.g. the effort of ribbon costs. (Kim, 2005 14) Besides touring shows they have permanent shows which take place in Las Vegas, Orlando and Walt Disney World. (Pawar, 2007 3)2.2.3.ProfitIn terms of profit, operational innovations develop improvement for better market performance. It enables Strategic, grocery and Operational benefits. (Hammer, 2004) The results of Cirque du Soleils innovations can be gathitherd from A Powerful Weapon (see appendix table 2). Applicable to Cirque du Soleil, they achieved strategic benefits which lead to higher customer retention, ability to execute strategies and to enter new markets due to their new entertainment business. Their marketplace benefits are based on greater customer satisfaction, differentiated offerings and stronger relationships due to offering unique experiences. Operational benefits are acquired with lower direct costs and more added values.3.Cirque du Soleils corporate missionThe corporate mission is an element of the organisations business plan. It is a function for the strategic planning which gives a specific perplexity to the business process. Therefore, the organisation has a purpose and business principles to form the firms identity. (Bierce, 2004 592)3.1.Componentsof the corporate missionThe corporate mission consists of three elements. primary of all, in organisational beliefs the members have the same strategic beliefs and share a common understanding which makes decision making easier in business processes. It results in a more confiden t and driven group. (Bierce, 2004 592) Secondly, the organisational values guide the actions in a business and are an integral part of the company but each person has her own value in what they believe to be good. Therefore, by sharing common values e.g. in ethical behaviour or worthwhile activities, reaching aims can be supported. Lastly, an organisation has a specific business definition which creates a direction for the organisation to follow and thereby attain success. Through this guideline, members focus on opportunities and efforts to expand their business. (Bierce, 2004 593)3.1.1.Business definition fit in to the mission, Cirque du Soleil places high importance on artistic performances and creative productions. (Cirque du Soleil, 2012) Based on the research of the author, their mission is not a precise business definition of Cirque du Soleil because there is no clear direction how they want to develop. For example, they do not define themselves as a traditional circus. Not h aving a business definition points to a weakness in the organisation. On the other hand, not having a definition is a strength because there is no other organisation which is similar with Cirque du Soleils business (exemplified in 2.1.).3.1.2.Organisational purposeCirque du Soleils purpose .. is to invoke the imagination, to grow the senses and to evoke the emotions of people around the world. (Cirque du Soleil, 2012) The organisation is trying to do everything to impress their customers but to fulfil their needs they do not use market research for their shows. By following trends the organisation will lose their unique presence. Instead, the organisations culture is to create new shows to update preceding shows. (Pawar, 20078-9)3.1.3.Organisational beliefsCirque du Soleil is breaking the market boundaries of circus and theatre (Kim, 2005 14) which points to a new form of live entertainment with acombination of circus art, ballet and theatre. (Pawar, 2007 3) Coherent with this fin ding, the non-existent business definition is contradictory because it is said that Cirque du Soleil move from the beginning to differentiate itself from the traditional circus in business perspectives. (Pawar, 2007 6-7) Moreover, to achieve this belief by breaking market boundaries, innovations enabled steps to be interpreted in a specific direction.3.1.4.Organisational valuesThe value of this organisation is to nourishment their creativity in business and try to exceed their limits. In addition, the organisation tries to empower its people and promote the youth. Furthermore, every member of the organisation see every contribution of one person. (Cirque du Soleil, 2012)3.2.Mission function & statementThe mission functions intrust strategic measures for the future and thus, represent the purpose of a unit. Moreover, a mission statement defines customers, products and services. (Entrepreneur Media, 2012) 3.2.1.The future development of the business & mission of Cirque du Soleil F or the future, Cirque du Soleil is planning to build more entertainment complexes in major cities like Sydney, London and New York. The complexes would include art galleries, nightclubs and restaurants for people to dine. In addition, Cirque wants to include hotels in which artists perform in the waiting area and clowns are doing the room services. (Pawar, 2007 10) Based on the mission of Cirque du Soleil, the author analyses the factors of mission.The aforementioned organisational values are definite such as the purpose has a clear understanding of what the organisation wants to offer their customer. In contrast to the business definition, there is an indistinct clarification. In particular, Cirques intentions for the future fuddle the business identity and make it even more vague than it already is. A suggestion would be to take preference and choose among the hospitality or entertainment industry and commit resources accordingly. Thus, they can also assure stakeholders of what specific business they are partaking in and the stakeholders have a clear understanding what purpose the organisation is.3.2.2.Renewed mission statementTo qualify the mission statement the author extracts parts of the exciting mission of Cirque du Soleil (see appendix Figure 2) and adds purposes Cirque du Soleil is an internationalistic organization and puts a high value on creation, production and performance of artistic work which will impress the audience to evoke the emotions. The organisation will torch people over the world with unique experiences of their performance which differentiate from other entertainment. In the modified mission, value on creativity like production will be retained because it highlights the features of Cirques business.Furthermore, members of the organisation have a clearer understanding of their aim or purpose. Moreover, Cirque du Soleil should expand in more countries so that everyone, even people in developing countries, can take part in the uniq ue experiences. Cirque could design smaller shows because the usual tickets are expensive. The mission clearly states that they differentiate from others and still hold their absolute business in the background. In summary, audiences might show a act curiosity with promises.Strategic BenefitsHigher customer retentiongreater market shareAbility to execute strategiesAbility to enter new markets market place benefitsLower pricesGreater customer satisfactionDifferentiated offeringsStronger customer relationshipGreater agilityOperational benefitsLower direct costs purify use of assetsFaster cycle timeIncreased accuracyGreater customization or precisionMore added valueSimplifies processesTable 2 A Powerful Weapon (Source Harvard Business School Publishing mountain, 2004)Cirque du Soleil is an international organization founded in Quebec dedicated to the creation, production and performance of artistic works whose mission is to invoke the imagination, to provoke the sense and to evoke t he emotions of people around the world. Figure 2 Mission (Source Cirque du Soleil 2012, online)BibliographyBaden- Fuller, C. (1992). Rejuvenating the Mature Business The competitory Challenge. Routledge Bierce, A. 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Online URLhttp//www.entrepreneur.com/encyclopedia/term/82494.html 1st July 2012 The Star (2008). Dubai firms buy 20% of Cirque du Soleil. Online URL http//www.thestar.com/entertainment/ article/473172dubai-firms-buy-20-of-cirque-du-soleil 4th July 2012