CASE 13
CIRQUE DU SOLEIL
Facts of the Case:
 Cirque du Soleil, founded in 1984, has
been a pioneer in redefining circus
entertainment, blending circus acts
with theatrical elements.
 Its breakthrough 1987 show We
Reinvent the Circus burst on the art
scene in Montreal as an entirely new
art form.
 Despite initial success, recent years
have seen a decline in profits, with
some poorly received shows and a bleak
outlook report.
 Cirque has diversified its business
ventures, including movies, television,
and nightclubs, as suggested by Bain &
Co.
 Cirque du Soleil experienced its first
loss in 2013 and saw a 20% drop in
market value from 2008.
 Despite challenges, Cirque has
successfully launched long-running
productions like Paramour on
Broadway.
 Cirque du Soleil's unique approach
includes eliminating traditional circus
elements like animal acts and spoken
dialogue.
 Recent expansions include permanent
shows in Las Vegas and ventures into
international markets.
 Cirque faced criticism for diluting its
brand with shows like Viva Elvis and
Banana Shpeel, which received poor
reviews.
 Concerns over financial performance led
to layoffs and cost-cutting measures,
including reevaluating production costs.
 Cirque is exploring diversification
through subsidiaries focusing on
musical theater, special events, cabaret
shows, children's television, and theme
parks.
 The company is also expanding into
ticketing services through a partnership
with AEG.
Problems:
 Decline in profits and market value.
 Poorly received shows leading to brand
dilution.
 Difficulty in distinguishing among
different Cirque productions, leading to
audience confusion.
 Rising production costs and increased
number of early show closures.
 Need for diversification to sustain
growth and profitability.
 Operational challenges, including
layoffs and cost-cutting measures,
affecting morale.
Strategic Issues (SWOT Analysis):
Strengths:
 Innovative and unique concept.
 Strong brand recognition and global
presence.
 Successful track record in creating
high-quality productions.
 Diverse talent pool and creative team.
Weaknesses:
 Dependence on traditional circus
elements may limit audience appeal.
 Decline in profitability and market
value.
 Challenges in differentiating among
Cirque productions.
 Operational inefficiencies and high
production costs.
Opportunities:
 Diversification into new ventures such
as musical theater, special events, and
theme parks.
 Expansion into emerging markets,
particularly in Asia.
 Leveraging partnerships for ticketing
services and distribution channels.
Threats:
 Competition from other entertainment
options.
 Economic downturns affecting
discretionary spending.
 Negative publicity from poorly received
shows or accidents.
 Cultural and regulatory challenges in
international expansion.
Alternative Solutions: development to ensure each
production is of the highest
 Focus on Core Competencies: standard.
Cirque could refocus on its core
strengths, such as innovative circus  Brand Reinforcement: Develop clear
productions, and prioritize quality branding and marketing strategies to
over quantity. This may involve differentiate between Cirque
streamlining operations, reducing productions and reinforce the unique
the number of shows, and investing value proposition of each show. This
more in creative development. could help address audience
confusion and strengthen brand
 Brand Reinforcement: Develop loyalty.
strategies to reinforce the Cirque du
Soleil brand and differentiate  Diversification: Continue diversifying
between productions. This could into new ventures, particularly those
include clearer branding and with growth potential such as musical
marketing campaigns to highlight theater, special events, and theme
the unique features of each show, as parks. However, ensure these ventures
well as addressing audience complement Cirque's core business
confusion. and leverage its existing strengths in
entertainment and creative innovation.
 Diversification: Continue
diversifying into new ventures, such  Cost Optimization: Implement rigorous
as musical theater, special events, cost-saving measures to improve
and theme parks, to reduce reliance profitability and operational efficiency.
on traditional circus shows. This This may involve renegotiating
may involve further investment in contracts, optimizing resource
research and development, allocation, and exploring innovative
partnerships, and market expansion production methods to reduce
efforts. overhead costs.

 Cost Optimization: Implement

additional cost-saving measures to
improve profitability, such as
renegotiating contracts, optimizing
resource allocation, and exploring
more efficient production methods.
This could help mitigate the impact
of rising production costs and
economic challenges.

Recommendation:
 Based on the analysis, I recommend
a combination of strategies to
address Cirque du Soleil's
challenges:

 Focus on Core Competencies:

Prioritize quality over quantity by
concentrating on innovative circus
productions that align with Cirque's
brand essence. This may involve
reducing the number of shows and
investing more in creative