Cirque Du Soleil Copy Essay

Submitted By Kinna5
Words: 5092
Pages: 21

THE TUCK SCHOOL OF BUSINESS AT DARTMOUTH

Cirque du Soleil
Beyond Blue Oceans: Scaling Cirque du Soleil and the Evolution of the Business
Morimura, Weiss, Guillen, Marinho, Nakayama, Rodrigues
Nov. 2011

Entrepreneurship and Innovation Strategy

EIS – Cirque du Soleil
Nahomi Morimura, Fabio Weiss Chaves, Rodrigo Guillen, Tulio Marinho, Heitor Nakayama, Alexandre Rodrigues

Beyond Blue Oceans: Scaling Cirque du Soleil and the Evolution of the Business

1

Introduction

Cirque du Soleil, or Circus of the Sun in English, was founded in 1984 by two street performers Guy
Laliberté and Daniel Gauthier in Montreal, Quebec. Their vision was to break away from the traditional circus of animal acts while maintaining the cachet of its travelling Big Top and spectacular acrobatics.
Cirque’s first production Le Grand Tour du Cirque du Soleil toured successfully from 1984 to 1987 with the help of a $1.5 million government grant as part of the 450th anniversary celebrations of Jacques Cartier's discovery of Canada. In 1987, Cirque bet on its fate by participating in the Los Angeles Arts Festival with literally just enough money for a one-way trip from their hometown. Their international debut turned out to be a resounding success. At its humble beginnings, 73 people worked for the local entertainment group, but by 2007, they had grown dramatically to employ 4,000 people from 40 nationalities and generate $700 million in annual revenue; putting the enterprise value at just under $2 billion. Currently,
Cirque du Soleil presents 12 resident shows and 12 touring shows scattered across the United States,
Canada, and diverse countries in South America, Europe and Asia (Exhibit 1).
Exhibit 1 – Cirque du Soleil’s presence around the globe

1

EIS – Cirque du Soleil
Nahomi Morimura, Fabio Weiss Chaves, Rodrigo Guillen, Tulio Marinho, Heitor Nakayama, Alexandre Rodrigues

Each Cirque du Soleil show is a synthesis of entertainment from around the world, with its own central theme and storyline. They “reinvented” the circus by mixing street performances with creative arts, live music, and theatre. The new value they have created allowed for a very attractive and highly successful business model. Cirque’s revenue generation model is significantly different from the traditional circus and other shows which take place in civic arenas and sports stadiums. The show derives the great majority of revenues from ticket sales, though sponsor partners and concession sales also contribute to profit margins. By providing sophisticated entertainment,

Cirque du Soleil is able to sell their tickets at

a substantially higher price, in line with major theatre or opera tickets. While the audience for the traditional circus performances was almost all families with free or discounted tickets for children, seats for Soleil shows are generally sold at face value. For example, Vegas-based “O” sells the most expensive seats at $110, but remains one of the hardest tickets to get. Shows are regularly sold out and have the highest seat occupancy rate consistently at 85-95%.

2

EIS – Cirque du Soleil
Nahomi Morimura, Fabio Weiss Chaves, Rodrigo Guillen, Tulio Marinho, Heitor Nakayama, Alexandre Rodrigues

2

Ecosystem

The Cirque du Soleil ecosystem, as shown in Exhibit 2, consists of a series of players that begins with the show itself and terminates with the audience that watches it.
Exhibit 2 – Cirque du Soleil’s ecosystem

Cirque du Soleil is an organization that is unwilling to compromise quality or artistic integrity, therefore, the company does not outsource any activity regarding the creation and development of a particular show. They are responsible for funding, designing, creating costumes, recruiting and training performers.
These artists are drawn to Cirque du Soleil without the promise of having their own show, but with the possibility to be part of a multicultural, high quality and big scale production where they can set a career and have artistic guidance.
In…