Cirque Du Solleil- Strategic Management
Conversely, this section will cover the incinerations the organization must take into account for the welfare of its stakeholders. The second part illustrates the organization’s uniqueness and how they differ from their competitors, which Is a result of several Innovations and business strategy. In the last part, the Nilsson statement will be Illustrated and discussed. Analysis of the mission statement will show the principles, philosophy, and beliefs that take high priority for their business. Furthermore, suggestions for the future will be listed. 1.
Stakeholders & the success of Cirque du Sole A stakeholder is a person or a group who has an input in an organization. It can affect the achievement of company’s objectives, activities and the behavior of Its member. (Mullions, 2005:1 63) 1. 1 . Cirque du Solely stakeholders Cirque du Sole, like all other organizations, has many stakeholders which include managers, employees, customers, government, etc. Every stakeholder has its particular interests to support an organization. 1. 1. 1 . Managers Managers have particular interests In an organization e. G.
In job security, size and growth of the organization or prestige. (Mullions, 2005: 164) Additionally, the managers chive a self fulfillment because they have career prospects due to the variety
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It is believed that employee’s salary Is above the average circus industry salary because the shows are upscale and successful. Thus. Employees can build up reputation and also expand career options e. G. By retraining for a second career or by changing the industry like transitioning to musical theatre for example. (Cirque du sole”, 2012) 1. 1. 3. Customers The customers of Cirque du Solely are the audiences and they are of prime importance for the organization. The benefit that Cirque du Sole 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 performance. Due to the multiple shows, customers may come recently which brings travel possibilities because the organization Is touring around the world. An adult experience can be fulfilled due to the fact that the show 1 org 1. 1. 4. Government The government’s purpose in helping the organization might be to enhance their image. Especially for tourism, the organization enlarge government’s cultural offering. Therefore, a new target group can be achieved e. . Those who are not interested in historical sights. As a result, this benefit supports the local industry due to taxes. Hence, the city can pursue other projects like the construction of parks as public revive. Cirque du Sole has an agreement with the Government of Canada to serve 25 years with entertainment to support the cultural program in Canada. (Canadian Heritage, 2010) 1. 1 . 5. Suppliers & Distributors Suppliers and distributors are committed in long term relationships with Cirque du Sole and bring prestige to the stakeholders due to frequent orders and demand.
It may also be possible that the stakeholder gets new customer groups due to references. 1. 1. 6. Investors & Sponsors For these groups, cooperating with Cirque du Sole brings a prestige to the locals. In he case of Arab investors, the cooperation brings business in tourism, regional development and support for the local industry. Dublin firms bought 20% of Cirque du Sole which brought profit. Last year 10000 visitors watched Cirque du Soil’s performances and the company owns a stake in casinos where Cirque’s shows are shown. The star, 2008) Sponsors want to enhance their image and in addition, get new target groups. Besides, return on investment is a benefit for sponsors. Nevertheless, sponsors are a low key stakeholder because they also use the event for fundraising opportunities. (De Wit, 2004: 931) 1. . 7. Community The 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 markets. The global community looks for funding and developing e. . For projects like charity. Cirque du Mood is a special project for youth who have HIVE or victims of sexual violence. Cirque offer them workshops to express themselves. (Cirque du Sole, 2012) 1. 2. Stakeholders & financial performance The aforementioned stakeholders bring their expectations to the organization and he organization tries to fulfill their expectations which may simultaneously lead to the organization accomplishing its own goals. If the requirements and expectations are reached, high performance can be achieved. (Managing, 2010: 131) 1. 2. . Superior financial performance through serving stakeholders’ interests 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 contribution from each member of the organization. This in turn, lowers the cost for recruitment and training. Satisfied employees provide inputs for creativity for new shows. If they perform excellently they can bring more possibilities in creating new and spectacular acts. Hence, better 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 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 organization, the audience brings the organization turnover and profit due to high ticket sales. (Kim, 2005: 15) The government supports the organization. One example can be given from 1985 where Cirque du Sole was in debt.
The Quebec government granted funds to the organization to sustain their business which brought the organization slowly back into a stable condition. (Prewar, 2007: 4) Due to long-term relationships to suppliers, the stakeholders build trust after a long collaboration. As a result, the stakeholder supports the organization with lower and better prices. Concerning investors, they support Cirque du Sole with projects for example. Therefore, Cirque du Sole has lower financing costs and has a better financial petition and position. Cirque du Sole attracts investors and thus, they have a financial backup. Thetas, 2008) Through the community, Cirque du Sole achieves a reputation e. G. By giving tickets to charitable organizations. Having a positive impact on the greater community and society in general can help Cirque boost their ticket sales. (Prewar, 2007: 9) Corporate social responsibility became important where companies take responsibility towards community and environment and operate in social and ecological aspects. As a result, the organization may increase customer retention, 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 organization 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 Sole satisfies their stakeholders. Due to the high turnover and profit in business, better shows are offered where the expenditure 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 manage the delivery. Hence, the studios get seller’s attention. (Hellholes, 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 organization. Furthermore, Cirque du Sole offers their employees health benefits like medical plan and travel benefits due to shows in different countries. (Cirque du Sole, 2012) Communities can be provided with new projects beside environment issues like environmental pollution.
According to Cirque du Mood Cirque du Sole can provide du Sole) 2. Operational innovations at Cirque du Sole Operational 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 based on the working performance of a company. (Hammer, 2004) 2. 1. Operational innovations & the unique Cirque experience Cirque du Sole distinguishes themselves from traditional circuses by eliminating and adding factors. (Kim, 2005: 36) Eliminate Star performance Animal shows Aisle concession sales Multiple show arenas 3 rings Raise
Unique venue + Touring location Reduce Fun and humor Thrill and danger Create Theme + Multiple shows Refines environment Multiple productions Artistic music and dance Music first than shows Production e. G. Film, TV, retail, corporate shows Unique combination of performing act Table 1 Eliminate- Reduce- Raise- Create Grid (Source by Kim, 2005: supplemented by author) Furthermore, it is said that less successful companies followed usual strategic logic and successful companies used value innovation. Value innovation differs from the basic strategy and does not focus on rivals.
It focuses more on the values customers eave in common and new processes. (Kim, 1998: 25-26) Moreover, by eliminating certain elements, costs can be reduced e. G. By reducing 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, divergence and a compelling tagging to achieve and exceed the value for both buyers and the organization which Cirque du Sole manages to do.
Evidently, it is shown in Strategy Canvas that Cirque du Sole differs from other competitors. The Circus Ringing Pros. ND Barnum & Bailey Value Curves are similar to a traditional circus and Cirque du Sole is the total opposite of it through 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. (Prewar, 2007: 4) In general, a mature industry has a greater chance of success and rewards than industries which appear profitable because mature industries have a greater reiterative 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 compete because of the market niche they create. Baden- Fuller, 1992: 18) These criteria fit Cirque du Soil’s business model and is carried out by its Blue Ocean strategy in which the organization 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 Sole Financial dynamics reflect results of an organization’s 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. (You- 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) Based on the innovation in 2. 1 the author identifies the reducing cost and the turnover due to the organization’s elimination and addition of elements which lead to refit. 2. 2. 1 . Turnover Cirque du Sole 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 Sole started to perform in different continents like Asia and Europe and people all over the world have the chance to take part in the events. Moreover, the organization creates themes which have impressive storyline and multiple shows with new acts. Additionally, artistic dance and music make it more unique. A special feature of the shows is how they rate 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. Prewar, 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, Cirque’s shows are sold out or well frequented with occupancy of 85-95%. (Williamson, 2004: 931) By other ventures like audio, videos, t-shirts and masks Cirque can increase their revenue. (Prewar, 2007: 3) In addition, less than 10% of revenues come from inceptions at shows. Nothing is sold inside the tent and also not during performances.
Therefore, Cirque du Sole offers PIP packages which include food in a (Williamson, 2004: 931) 2. 2. 2. Reducing cost Reducing costs are achieved by significantly eliminating 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 Sole tours around the world. Moreover, star performances in traditional circuses are expensive and Cirque does not include hose 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 Lass Vegas, Orlando and Walt Disney world. (Prewar, 2007: 3) 2. 2. 3. Profit In terms of profit, operational innovations develop improvement for better market performance. It enables Strategic, Marketplace and Operational benefits. (Hammer, 2004) The results of Cirque du Soil’s innovations can be gathered from “A Powerful Weapon” (see appendix: table 2).
Applicable to Cirque du Sole, they achieved tragic 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 Soil’s corporate mission The corporate mission is an element of the organization’s business plan.
It is a function for the strategic planning which gives a specific direction to the business process. Therefore, the organization has a purpose and business principles to form the firm’s identity. (Bierce, 2004: 592) 3. 1 . Components of the corporate mission The corporate mission consists of three elements. First of all, in organizational 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 confident and driven group. Bierce, 2004: 592) Secondly, the organizational 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 moon values e. G. In ethical behavior or worthwhile activities, reaching aims can be supported. Lastly, an organization has a specific business definition which creates a direction for the organization 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 According to the mission, Cirque du Sole places high importance on artistic performances and creative productions. (Cirque du Sole, 2012) Based on the research of the author, their mission is not a precise business definition of Cirque du Sole because there is no clear direction how they want to develop. For example, they do not define themselves as a traditional circus. Not having a business definition points to a weakness in the organization. On the other hand, not having a definition is a strength because there is no other organization which is similar with Cirque du Soil’s business (exemplified in 2. 1 . ). 3. . 2. Organizational purpose to evoke the emotions of people around the world. ” (Cirque du Sole, 2012) The organization is trying to do everything to impress their customers but to fulfill their needs they do not use market research for their shows. By following trends the organization will lose their unique presence. Instead, the organization’s culture is to create new shows to update previous shows. (Prewar, 2007:8-9) 3. 1. 3. Organizational beliefs Cirque du Sole is breaking the market boundaries of circus and theatre (Kim, 2005: 14) which points to a new form of live entertainment with a combination of circus art, ballet and theatre. Prewar, 2007: 3) Coherent with this finding, the non-existent business definition is contradictory because it is said that Cirque du Sole tried from the beginning to differentiate itself from the traditional circus in business respective. (Prewar, 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. Organizational values The value of this organization is to keep their creativity in business and try to exceed their limits. In addition, the organization tries to empower its people and promote the youth.
Furthermore, every member of the organization respects every contribution of one person. (Cirque du Sole, 2012) 3. 2. Mission function & statement The 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 Sole For the future, Cirque du Sole 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. (Prewar, 2007: 10) Based on the mission of Cirque du Sole, the author analyses the factors of mission. The aforementioned organizational values are definite such as the purpose has a clear understanding of what the organization wants to offer their customer.
In contrast to the business definition, there is an indistinct clarification. In particular, Cirque’s 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 between 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 takeovers have a clear understanding what purpose the organization is. . 2. 2. Renewed mission statement To modify the mission statement the author extracts parts of the exciting mission of Cirque du Sole (see appendix: Figure 2) and adds purposes: “Cirque du Sole 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 organization will torch people over the world with unique experiences of their performance which differentiate from other entertainment. In the modified mission, alee on creativity like production will be retained because it highlights the features of Cirque’s business. Furthermore, members of the organization have a clearer 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.