X FACTOR ANALYSIS

These are fundamental activities that can generate economic value by allocating more resources to
them.

Human resource, Diversification, CSR, Product Development, Sales

HRM:

Managing the diverse array of human resources presents a challenging task for the Cirque Du Soleil. It
consists of over 2500 employees from 40 nationalities who speak around 25 different languages. Since,
two thirds of the employees are outside of the head quarters, it led to a decentralization of authority.
We believe it is important to allocate resources not only for efficient management of the employees but
for a more rigorous recruitment and selection process. This would prove to be very important over time
as with increasing competitor’s scouting for performers, it would be crucial that the Cirque do not lose
some of their star performers to competition. This would mean the Cirque must ensure that performers
are given a more safe environment to perform and make the performers feel bonded with the company
so that they are reluctant to avoid other offered contracts.

Diversification:

With increasing competition, it means that the Cirque would be losing out some of their market share
and this would eventually lead to lower profit margins. Cirque has to ensure consistent standards of
quality in each and every show they perform. However, they must look into other alternatives of making
more revenue. At this point, the Cirque has established itself as a strong brand. It could take advantage
of their brand image by going for other industries such as the restaurant or the hotel business.

CSR:

The Cirque has been know for socially responsible activities and events. For instance, they had
contributed around 1% of their revenue to charities for disadvantaged children. Such activities would
have a positive effect in the brand image of the Cirque and we believe it would be necessary to allocate
some portion of their resources to continue with such activities.

Product development:

The Cirque Du Soleil is known to create an alternate reality in their shows, captivating their audiences
with their amazing acts. However, from a marketing perspective, Cirque is offering basically the same
product with variations. Hence, this would be a crucial X-factor that would need the right allocation of
resources so that they can come up with more interesting concepts and a greater variety of shows. This
is especially important since many of their competitors are imitating some of their acts meaning the
Cirque is losing their points of differences (PODs). With growing customer demands and changing
preferences, it would be important for the Cirque to continue developing more innovative shows in the
future.

Sales:

Sales management would become more important as Cirque diversifies into other products. Ticket
prices are relatively high for the Cirque compared to some competitors but this could be an advantage
for them. The high price may help them sustain a more exclusive product quality brand image and it may
be positioned as a superior offering than it’s competitors. Managing sales revenue would require more
investment of resources overtime as Cirque expands it’s activities into other markets with more product
offerings.

1. Does Cirque du Soleil

have a sustainable
competitive advantage? If
so, what is it? If not, can it
create one?
2. What are the growth options
available to Cirque du Soleil? What is
your assessment of the firm’s
diversification strategy?
3. What are the most important strategic issues now
facing Cirque du Soleil? What are your strategy
recommendations?