Cirque Du Solleil- Strategic Management Essay

Executive Summarycwm du Soleil is an pastime firm from Montral, Canada and was founded in 1984. The company started as a sm each(prenominal) moving in and gradually grew into a triumphful regime activity with an established presence in the entertainment industry. This report deals with the ways in which the validation became successful. Therefore, it is necessary to analyse different factors. The first part enumerates the interestingnessholders which contri notwithstandinge profits for cwm du Soleil. Conversely, this section ordain c all over the considerations the brass section must take into account for the welfargon of its stakeholders. The second part illustrates the brasss uniqueness and how they differ from their competitors, which is a result of several innovations and demarcation strategy. In the last part, the boot bid will be illustrated and discussed. Analysis of the mission teaching will show the principles, philosophy, and beliefs that take broad(prenominal ) precedence for their line of products. Further more, 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 physical composition. It rear affect the achievement of companys objectives, activities and the behaviour of its penis. (Mullins, 2005163)1.1.cwm du Soleils stakeholders cirque du Soleil, kindred all some other organisations, has many stakeholders which include managers, employees, nodes, government, etc. Every stakeholder has its particular interests to patronize an organisation.1.1.1.ManagersManagers nonplus particular interests in an organisation e.g. in job security, size and growth of the organisation or prestige. (Mullins, 2005 164) Additionally, the managers achieve a self fulfilment because they have charge prospects unwrap-of-pocket to the variety of jobs e.g. in surroundings issues. (Cirque du Soleil, 2012) Hence, the managers are able to learn different s tages of work and same(p)wise have job possibilities in non-circus work.1.1.2.Employees ilk managers, employees have interests in job security and in learning because the shows are always differentiated. Therefore, employees bay window also experience a self fulfilment. It is believed that employees net profit is above the average circus industry salary because the shows are upscale and successful. Thus, employees washbowl build up a spirit and also expand career options e.g. by retraining for a second career or by changing the industry like transitioning to melodyal theatre for example. (Cirque du Soleil, 2012)1.1.3.CustomersThe clients of Cirque du Soleil are the auditory modalitys and they are of prime importance for the organisation. The benefit that Cirque du Soleil gives to the audience is an escape from the stress of their daily lives. In other words, they can get away from it all for a short while. The audience gets a unique experience from the spectacular cognitiv e process. Due to the multiple shows, customers may screw frequently which tot ups travel possibilities because the organization is touring around the world. An adult experience can be fulfilled due(p) to the fact that the show is more elegant and rich than loud like in a tralatitious circus. (Pawar, 2007 8-10)1.1.4.GovernmentThe governments adjudicate in helping the organisation might be to kindle their image. in particular for tourism, the organisation enlarge governments heathen offering. Therefore, a bracing target group can be achieved e.g. those who are not interested 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 construction of parks as public service. Cirque du Soleil has an agreement with the Government of Canada to serve 25 years with entertainment to support the cultural platform in Canada. (Canadian Heritage, 2010)1.1.5.Suppliers & Distri only whenorsSuppl iers and distributors are committed in long term relationships with Cirque du Soleil and bring prestige to the stakeholders due to frequent orders and demand. It may also be possible that the stakeholder gets parvenu 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 business 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 mathematical processs and the company owns a stake in casinos where Cirques shows are shown. (The star, 2008) Sponsors want to enhance their image and in addition, get overbold target groups. in any until nowt, return on investment is a benefit for sponsors. Nevertheless, sponsors are a low list stakeholder because they also use the event for fundraising opportunities. (De Wit, 20 04 931)1.1.7.CommunityThe province of Quebec and its community 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 food markets. The worldwide 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 sexual violence. Cirque offer them workshops to express themselves. (Cirque du Soleil, 2012)1.2.Stakeholders & monetary performanceThe aforementioned stakeholders bring their expectations to the organisation and the organisation tries to fulfil their expectations which may simultaneously nothingness to the organisation accomplishing its own goals. If the requirements and expectations are reached, advanced-pitched performance can be achieved. (Manowong, 2010 131) 1.2.1.Superior financial performance through serving stakeholders interests In the interests of the stakeholder, mana gers will be rewarded for their performance. When expectations are met, managers build commitment and loyalty and thus, cause a positive contribution from each member of the organisation. This in turn, dismantles the cost for recruitment and training.Satisfied employees provide inputs for creative thinking for new shows. If they perform excellently they can bring more possibilities in creating new and spectacular acts. Hence, burst shows can be offered. As a result more tickets can be sold for high prices which lead to high turnover and profits. Furthermore, new target groups can be tapped into by attracting 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 business. 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 static condition. (Pawar, 2007 4)Due to long-term 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 costs 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 social accountability bec ame important where companies take responsibility towards community and environment and operate in social and ecological horizons. As a result, the organisation may increase customer re dwellion, enhance relationships (customer, supplier) and differentiate from competitors. (Sims, 2003 43-44)1.3.Serving stakeholders interests through superior financial performance Good 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 intake is spent on modern technology or venues. Suppliers are charged with new tasks and build trust. Besides, the big the company size, the bigger the orders because the company may have the ability to manage the delivery.Hence, the studios get sellers attention. (H ollensen, 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 health benefits like medical 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. According to Cirque du Mond Cirque du Soleil can provide new projects. So besides Africa and Australia they could also operate in Asia. (Cirque du Soleil)2.Operational innovations at Ciruqe du SoleilOperational innovation is about creating new ways in business e.g. in new projects or providing customer service to achieve success. Consequently, success is not only base on the working performance of a company. (Hammer, 2004) 2.1.Operational innovations & the unique Cirque experienceCirque du Soleil distinguishes themselves from tradit ional circuses by eliminating and adding factors. (Kim, 2005 36)EliminateStar performanceAnimal showsAisle concession salesMultiple show arenas3 ringsRaiseUnique venue + Touring stanceReduceFun and humourThrill and dangerCreateTheme + Multiple showsRefines environmentMultiple productionsArtistic symphony and danceMusic first than showsProduction e.g. film, TV, retail, integrated showsUnique combination of performing act tabulate 1 Eliminate- Reduce- Raise- Create Grid (Source by Kim, 2005 supplemented by author)Furthermore, it is said that less successful companies followed usual strategical logic and successful companies used quantify innovation. determine innovation differs from the basic strategy and does not localise on rivals. It focuses more on the treasures customers have in green and new processes. (Kim, 1998 25-26) Moreover, by eliminating plastered elements, costs can be reduced e.g. by reducing advertising because value innovation causes word-of-mouth. Thus, a p art of differentiation is also value at a lower cost. (Kim, 1998 28-30) As illustrated below (see realise 1), the key factors for the value curve are focus, divergence 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 dodge Canvas that Cirque du Soleil differs from other competitors. The Circus 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 operational innovation leads to value innovation and as a result, those unique strategies such as new concepts and process create unique experiences. (Waltz, 2003 86) For example they attract audiences with lighting effects, original music and new and appealing costumes. (Pawar, 2007 4)In general, a mature industry has a greater chance of success and rewards than in dustries which appear profitable because mature industries have agreater creativity in business and higher(prenominal) level of innovation. Customers are especially attracted by the creativity of industries which can cause unique experiences. These industries are also difficult to compete because of the market niche they create. (Baden- Fuller, 1992 18) These criteria fit Cirque du Soleils business model and is carried out by its Blue Ocean strategy in which the organisation builds a new and uncontested market which made the competition irrelevant 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 bullion flow. Increasing the productivity means not reducing costs. Nevertheless, it creates options which may lead to turnovers. The effect of increasing fruit 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 comfortable 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 spate all over the world have the chance to take part in the events. Moreover, the organisation creates themes which have expansive storylines and multiple shows with new acts. Additionally, dainty dance and music make it more unique. A special blow of the 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 ballet. (Pawar, 2007 3-6)This generates turnover because creativity causes a great ambience 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. Nothing 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 significantly eliminating elements. By eliminating circus animals reduce one of the most valuable expenditures. This consis ts of training, insurance, medical care and theodolite, and transportation expenses are especially costly because Cirque du Soleil tours around 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 decoration 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 avail for better market performance. It enables Strategic, Marketplace and Operational benefits. (Hammer, 2004) The results of Cirque du Soleils innovations can be ga in that respectd from A Powerful Weapon (see appendix table 2). Applicable to Cirque du Soleil, they achieved strategic benefits which lead to higher customer memory board, ability to execute strategies and to enter new markets due t o 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 billet for the strategic planning which gives a specific direction 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. First of all, in organisational beliefs the members have the same strategic beliefs and share a popular understanding which makes decision making easier in business processes. It results in a more confident and dictated group. (Bierce, 2004 592) Secondly, the organisational values guide the actions in a busin ess 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 relieve oneself success. Through this guideline, members focus on opportunities and efforts to expand their business. (Bierce, 2004 593)3.1.1. worry definitionAccording 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 specialise themselves as a traditional circus. Not having 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 provoke 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 antecedent 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 finding, the non-existent business definition is contradictory because it is said that Cirque du Soleil tried 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 taken in a specific direction.3.1.4.Organisational valuesThe value of this organisation is to keep their creativity in business and try to exceed their limits. In addition, the organisation tries to present its people and promote the youth. Furthermore, every member of the organisation respects every contribution of one person. (Cirque du Soleil, 2012)3.2.Mission function & statementThe mission functions devote 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 For the future, Cirque du Soleil is planning to build more entertainment complexes in major citi es 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 blur the business identity and make it even more vague than it already is. A suggestion would be to take preference and choose in the midst of 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 modify the mission statement the author extracts parts of the exciting mission of Cirque du Soleil (see appendix go through 2) and adds purposes Cirque du Soleil is an international 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 unique 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 accurate business in the background. In summary, audiences might show a continued curiosity with promises.Strategic BenefitsHigher customer retentiongreater market shareAbility to execute strategiesAbility to enter new marketsMarketplace benefits pull down pricesGreater customer satisfactionDifferentiated offeringsStronger customer relationshipGreater agilityOperational benefits discredit direct costsBetter use of assetsFaster cycle timeIncreased accuracyGreater customization or precisionMore added valueSimplifies processesTable 2 A Powerful Weapon (Source Harvard military control School Publishing Corporation, 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 the emotions of people around the world. Figure 2 Mission (Source Cir que du Soleil 2012, online)BibliographyBaden- Fuller, C. (1992). Rejuvenating the Mature Business The Competitive Challenge. 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