Cirque du Soleil [HBS Case Study] by Thomas J.

DeLong and Vineeta Vijayaraghavan

An analysis of the Cirque du Soleil Case Study published by Harvard Business School.

The abstract for the original cast study is as follows:

Retaining talent is an issue for any company whose success relies on the creativity and excellence of its employees.
This is especially true for Cirque du Soleil, the spectacularly successful circus without animals, whose 2,100
employees include 500 artistsmimes, clowns, acrobats, gymnasts, musicians, and production professionals.
Managing a company full of creative people is a juggling act in itself, between keeping its artists happy and pursuing
a successful strategy for attracting more business and talent.

Blue oceans identify all the industries there are nonexistent today. It is the unknown market space that has yet to be
tapped into thus there is a lack of competition. The blue ocean strategy encompasses various aspects; however,
the most important fundamental mindset is to have a re-constructionist view. This view is based on a world-view in
which market boundaries and industries can be reconstructed by actions and beliefs of industry players (Kim and
Mauborgne). Two of the important strategies is to find and develop markets without competition and to exploit and
protect blue oceans. It is changing the unit of analysis to strategic move, and blue oceans are not dependent upon
market space, competition, existing demand and technological advancements.

Cirques original blue ocean strategy was to push the boundaries of what a circus consisted of and integrating the
range of a firms functional and operational activities. In essence, Cirque was able to offer people the fun and thrill of
a circus while also integrating theatrical aspects by including intellectual sophistication and artistic richness into the
performances. The initial move towards this strategic change was to focus on reevaluating the components of the
traditional circus offerings. This enabled the company to reduce unnecessary cost by focusing on the actual demand
of viewers and to allocate the spending on what was driving revenue. For example, Cirque eliminated animal show
performances because of the high maintenance fee and decreasing rate of attendance to these types of shows. As a
trade-off, it focused on the clowns, the tent and classic acrobatic acts and pushed forward to enhance these three
key components to drive successful shows. Another key aspect that led to a creation of a new market for Cirque du
Soleil was its identity as none of them and a little of all of them (Kim and Mauborgne). It was hard to see Cirque
strictly as circus or theater rather it eliminated, reduced, raised and created different aspects of both circus and
theater in order to create a new genre of entertainment that worked around, in and out of the original framework of
circuses.

Internally, to be in line with the overarching strategy, Cirque needs to be able to deliver creative performances
consistently. This means that those who are involved in the creation of the show both cast and staff have to be
content while being a part of the team. As a blue ocean strategy company, Cirque was not able to draw the cast and
staff in through monetary benefits most of the money went to building a consistent brand and quality for all shows
and casting the right people for the culture. Most times artists were unemployed for a large part of the year because
they were getting paid per show, staff unable to go through promotion and everyone on tour isolated from their
family. With all of these factors amalgamating, there had to be ways in which Cirque was able to keep the best crew
with the best managerial body. In order to secure this, Cirque was able to create value for everyone in many
different ways, including providing opportunities to work with eminent persons in the field, giving substantial roles
to increase passion, fulfilling non-artistic needs, making it an enjoyable experience on tour, and allowing for risk-
taking activities that were reflective of the Cirque du Soleil culture. To manage the company well, there had to be a
fine line between being a benevolent parent and an official employer. (Delong and Vijayaraghavan) Much of what
was given as non-professional aid fed to the creation of better productions. Especially the importance of having
creativity at the core rather than customers at the core led the artists to work the way they want and express
themselves. The end product of this creativity, the magical performances delivered to the audience, is all a result of
efforts at the back end to support innovation, security and consistency in the brand.

Nonetheless, despite the overwhelming success of the company, there are still challenges that the company faces.
Some challenges include balancing recentralization and developing overseas markets, saturation in North American
markets, diversification into other types of products, creation of a healthy mix of business and creative, tackling new
competition, high ticket prices and rejuvenating passion internally. (Delong and Vijayaraghavan) Because the
company has been alive and well over 10-15 years, the imitation barrier has declined economically and cognitively.
Cirque du Soleil is able to retain its brand value but it is inevitable for the company to keep constant rates of
improvement in quality and creativity in order to define itself as the standard for this new genre of circus that it
created. This means not only balancing out the cost and buyer value but also to expand to other regions of the world
to keep its dominance.

With the current CEO, Guy Laliberte, managing the whole company and preventing it from being public, the
company will not lose its emphasis on the artistic values of Cirque du Soleil. To keep this even in the future, the
whole company needs to believe in this core value as did the founder of the company.

Sources

DeLong, Thomas J., and Vineeta Vijayaraghavan. Cirque du Soleil. Harvard Business School Case 403-006, July 2002.
(Revised October 2002.)

Kim, W. Chan.Mauborgne, Rene.Blue Ocean Strategy: How To Create Uncontested Market Space And Make The
Competition Irrelevant. Boston, Mass. : Harvard Business School Press, 2005. Print.
 Case study: Cirque du Soleil

The story: In 1983 Guy Lalibert, a street performer in Europe and his native Canada, won a grant from the
Quebec government to put on a different kind of show. Staged as part of the 1984 celebrations to mark the 450th
anniversary of the discovery of Canada, Cirque du Soleil, which mixed street entertainers with circus acrobats, and
athleticism with fantasy and theatre, was a huge success.

Today, Mr Lalibert is chief executive of an internationally renowned performance arts company, responsible for 22
different shows around the world some touring, some permanent backed by a supporting cast of 4,000
employees.

Many years in the making, and subject to stringent safety and artistic controls, each show costs millions of dollars to
develop and produce.

The challenges. High production costs and values mean high ticket prices. To justify the cost to the audience, Cirque
must do two things: continue to come up with spectacular ideas; and continue to find, recruit and train enough of
the right people. Both are tough. The market for Cirque is maturing. An estimated 90m people have seen a
performance. How do you leave them wanting more?

Performers tend to have short careers: the attrition rate is about 20 per cent a year, whether through injury or
simply deciding it is time to retire. How do you renew the talent pool?

The solution. Thirty talent scouts are listed on the Cirque website, and many of them are specialists in specific skills,
such as singing or gymnastics and acrobatics. Sources of recruits include the Olympic Games, the Mongolian State
Circus and world championship athletics competitions.

Auditions, described by Cirque a treasure hunting, are demanding and can last up to two days. After initial
screening, potential recruits must demonstrate not just technical proficiency but range. After a long audition,
dancers must then show their acting, improvisation and singing skills.

Once identified as Cirque people, performers names are added to the Cirque database to await a suitable role.
Then the hard work really starts: they are drilled in their new craft at boot camps for up to four months before
their first performance.

Nevertheless, the Cirque immersion programme aims to bring out the best in an individual. Key to the
transformation process are mentors veterans who guide new artists and get to know them. Cirque describes itself
as a family, a band of brothers.

Reinvention is a constant theme. Having redefined the traditional big top circus in the 1980s, Mr Lalibert keeps
audiences loyal and attracts new ones by always offering something different. In the 2006 show Love, Cirque du
Soleil performs to the music of The Beatles. A collaboration between Cirque, producer George Martin the fifth
Beatle and his son Giles, Love is still running at The Mirage in Las Vegas.
A new production is nearly always under way. Each show looks for a new theme, so the repertoire ranges from
aquatics (O) to The Beatles (Love) to martial arts (K).

The lessons. Managers must plan ahead. Hence, scouts are always sourcing new recruits in order to fill anticipated
skills gaps.

New techniques are developed constantly. Revealingly, acrobat mentor Andr Simard, whose innovations include a
new safety line for aerial acrobatics, is not called creative director but research and development specialist.

The focus is also on constantly devising new content in the form of new themes and concepts. For instance, for K,
Mr Lalibert asked Robert Lepage, the playwright, director and actor, to craft a show around martial arts.

The company develops new products (shows) all the time. Because a show takes so long to create recruiting
performers, devising music, costumes and infrastructure it looks ahead to develop tomorrows performers and
staging today.

The writers are, respectively, chief executive of Deloitte Touche Tohmatsu and managing director of Alchemy
Growth Partners. They are co-authors of As One: Individual Action, Collective Power