Cirque du Soleil’s Success

Starting in the mid 1980s, Cirque du Soleil has been a phenomenal success.

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Between 1984 and 2000, nearly 30 million people saw one of their shows.

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They have four permanent locations and continuos world tours.

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By 2000, revenues were exceeding $500 million a year.

 

 

 

Cirque du Soleil’s Competitive Advantage

Market to an adult audience 

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Prices from $65-110, 90% of revenues from ticket sales

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Corporate Sponsors

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Combine elements of opera, circus, dance into a harmonious theme

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Diminish power of suppliers (no stars, no animals)

HOW IS THIS POSSIBLE???

Let’s check out what the experts say.

Kim and Mauborgne’s Value Curve

Each industry has a set of factors where companies compete.

By plotting how well companies perform in each factor, we can draw a value curve.

Companies can make the competition irrelevant by creating a cool new curve.

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To do this they should ask four key questions.

(1) Which factors should be eliminated?

(2) Which factors should be reduced below standards?

(3) Which factors should be raised above standards?

(4) Which factors should be created new?

Clayton Christensen’s Disruptive Innovation

Disruptive innovations are important because they explain why strong, successful companies eventually fail.

These companies do a great job of meeting the desires of their main customers.

Initially, a disruptive innovation doesn’t satisfy the main customers at all, so the big companies ignore it.

In fact, disruptive innovations don’t start off by meeting anyone’s needs very well.

But then they start meeting everyone’s needs really well, and it’s too late for the big companies to catch up.

Is Cirque du Soleil a Disruptive Innovation?

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YES

They targeted adults where traditional circuses targeted children.

At first their product didn’t make any money.

They expanded the market to include new customers.

Traditional circus customers were oversatisfied.

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NO

Not a low-end innovater because they had high prices.

Cirque du Soleil has yet to seriously disrupt traditional circuses.

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Cirque du Soleil is not only a disruptive innovator from the point of Christensen, but also a value innovator from that of W. Chan Kim.

 


Cirque du Soleil’s Future

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Kim and Mauborgne’s Advice for Companies

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Keep your value curve when:

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(1) Your value curve is

fundamentally different from competitors

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(2) Most customers

value the difference you offer


 

Recommendations for Cirque du Soleil’s Future

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Expand Geographic Locations

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Continue Sustaining Innovations

Reduce Costs

Improve Performance

Now, with all this new knowledge you’re sure to succeed.

Why not try the circus industry again?