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A Cirque du Soleil Blue Ocean Strategy

A Cirque du Soleil Blue Ocean Strategy A Cirque du Soleil Blue Ocean Strategy
Blue Ocean Strategy
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Blue Ocean Strategy
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Created in 1984 by a group of street performers, Cirque’s productions have been seen by almost forty million people in ninety cities around the world. In less than twenty years Cirque du Soleil has achieved a level of revenues that took Ringling Bros. and Barnum & Bailey—the global champion of the circus industry—more than one hundred years to attain.

What makes this rapid growth all the more remarkable is that it was not achieved in an attractive industry but rather in a declining industry in which traditional strategic analysis pointed to limited potential for growth. Supplier power on the part of star performers was strong. So was buyer power.

Alternative forms of entertainment— ranging from various kinds of urban live entertainment to sporting events to home entertainment—cast an increasingly long shadow. Children cried out for PlayStations rather than a visit to the traveling circus. Partially as a result, the industry was suffering from steadily decreasing audiences and, in turn, declining revenue and profits. There was also increasing sentiment against the use of animals in circuses by animal rights groups. Ringling Bros. and Barnum & Bailey set the standard, and competing smaller circuses essentially followed with scaled-down versions.

From the perspective of competition-based strategy, then, the circus industry appeared unattractive. Another compelling aspect of Cirque du Soleil’s success is that it did not win by taking customers from the already shrinking circus industry, which historically catered to children. Cirque du Soleil did not compete with Ringling Bros. and Barnum & Bailey. Instead it created uncontested new market space that made the competition irrelevant. It appealed to a whole new group of customers: adults and corporate clients prepared to pay a price several times as great as traditional circuses for an unprecedented entertainment experience.

Significantly, one of the first Cirque productions was titled “We Reinvent the Circus.”

The Blue Ocean strategy book has been part of my curriculum during my academic years. Having been always into business strategy – for obscure reasons, I have to say that the Cirque du soleil example featured in the book was for me the most striking business strategy story about creating a blue oceans  - before they even knew that that was an actual academic concepts - that I have ever read (though I enjoyed the Southwest airline story as well). Cirque du Soleil, in less than twenty years since its inception, has reached a level of income which took hundred years to the historical actor and once-leader in the circus industry to achieve, they delighted spectators, they performed all other the world, they created an alternative form of entertainment well embodied in their moto “reinvent the circus”. Fantastic thinking. Fantastic execution. Inspiring. 

By ChrystelM | 14/07/2019

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