The Cirque case study
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The Cirque case study
Cirque’s strategic choices
Cirque Du Soliel’s main factor for survival and success in the industry stems mainly from its adoption of the blue ocean strategy. The strategy is unique in its design since it makes market competition irrelevant through the establishment of spaces in the market that are new and uncontested. Cirque, therefore, aligned innovation with other factors such as perceived benefits from consumers as well as costs. The company dwelled on lowering costs and increasing consumer benefits using the Eliminate, Reduce, Create and Raise criteria. The company first eliminated some activities that had been taken for granted, such as animal shows and aisle concession sales. They retained clowns but with a reduction on their importance. The organization re-invented live performances with increased quality and created new and exciting prefaces that customers had not experienced before. This was done through a combination of different entertainment features in extraordinary ways.
Cirque’s industry of operation
Cirque du Soleil operates mainly in the entertainment industry as a circus producer. It currently holds the record of the largest producer of the circus around the world mainly on contemporary terms. Being a circus producer, most of the company’s competitors are companies that also operate in the same industry, some of which are also circus producers. These companies include but not limited to Cineplex, Two Bit Circus, Qubit, TAIT and Netflix.
Reasons for Cirque’s problems
The fall of Cirque Du Soleil was a result of a combination of both internal as well as external factors. One external factor was the unexpected economic downturn which was experienced between the years 2008 and 2010. Following this external force, the management tried to help the company in keeping competitive advantage but ended up making yet another internal error. The primary internal cause of failure was poor strategic choices. The company offered many shows that lacked differentiation. This led to a sharp drop in demand for its shows in Europe. Apart from these two, misfortune was another external factor that made the company lose its competitive advantage. During a particular Vegas Live show, one of the company’s performers fell and died on stage. This was followed by investigations from OSHA, which revealed that Cirque’s has very high rates of injury. Other performers from the company recorded claims that the organization subjects them to excessive pressure to produce quality performances. As a result, they were unable to raise acrobatic safety concerns.
Recommendations
If I were hired as the new owner at Cirque du Soleil, there are a variety of recommendations I would make to help the company back on its feet. First, I would recommend that the organization restructures and change its design. Some of its failures could be as a result of a pattern so predictable for competitors. Restructuring is needed because the competitive environment does not remain the same. It is prone to change, and therefore, the company’s organizational design must also be dynamic (Rothaermel, 2019). Secondly, Cirque should pay close attention to innovation. I would recommend that the company analyses the current innovation practices and aim at revolutionizing innovation through the adoption of autonomous actions.
Lastly, I would recommend that Cirque explores available opportunities for a strategic alliance. According to Rothaermel (2019), strategic alliances are famous across the globe primarily because they enable companies to attain their goals at a faster rate and with lower costs. This is exactly what Cirque should prioritize because currently, the company’s valuation has dropped to a whopping 50 per cent. With this financial concern, cost reduction, as well as a new strategy, should be top priorities. All these can be possible through strategic alliances. Strategic alliances will enable Cirque to explore new markets, guard against uncertainties, learn more of its capabilities and strengthen its competitive position.
How I would implement changes
Implementing these changes would call for a meeting with key stakeholders where their approval will be sought. After they approve, change management strategies would be employed to prepare employees for the new organizational design. They would also be trained on how to handle the new technology associated with a new direction in innovation.
References
Rothaermel, F. T. (2019). Strategic management. New York: McGraw-Hill Education.