Swot Analysis of Cirque Du Soleil

Abstract

Since 1984 Guy Laliberté has been building Cirque du Soleil, an artistic circus that has amazed thousands of people in hundreds of towns. Cirque has worked hard on keeping their strengths unbeatable and weaknesses miniscule. In the process of making their weaknesses turn into strengths they have taken advantage of many opportunities available to them. Cirque has done so well at expanding their horizon is it difficult to find opportunities they have not taken advantage of; so, where will they go from here? They do have a few threats; yet even these do not seem to injury Cirque du Soleil.

They may need to watch negative media attention and keep founder Laliberté under wraps. Although with Cirque’s popularity, little will affect this strong company that takes advantage of all opportunities and turns their weaknesses into strengths.

Cirque du Soleil: The Circus of the Sun Shines

1. Mission Statement: Invoke, provoke and evoke the imagination, the senses and the emotions of people around the world.

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2. Organizational strengths/weaknesses
a) Strengths
i. Unique: Cirque Du Soleil, French for Circus of the Sun, was founded in 1984 by Guy Laliberté in Baie-Saint-Paul, Canada for the 450th anniversary of Canada’s’ discovery celebration in Quebec City. (Roux, 2009) Cirque du Soleil now boasts 5 offices around the world: Amsterdam, Las Vegas, Singapore, and the headquarters in Montreal. The show that provides the audience with a mix of circus arts and street entertainment is a visual feast of colors, costumes and performances. ("About Cirque du Soleil") There truly is no other show like it on Earth.

It is not like a traditional circus. It does not contain a center ring or have a parade of animals performing tricks.

Cirque du Soleil shows do however contain something not common to an everyday circus, a plot. In the case of Quidam, a touring show, “A young girl fumes; she has already seen everything there is to see, and her world has lost all meaning. Her anger shatters her little world, and she finds herself in the universe of Quidam”. Moreover, elaborate and creative shows have continually been born from conception from the almost 200 creators that have worked for Cirque since 1984. One such creation is “O”, a resident show at the Bellagio in Las Vegas, Nevada. The stage for this performance is a 1.5 million gallon tank that is built into the Bellagio. (Jones, 2009) It goes without saying; Laliberté has created a niche in the entertainment world.

ii. TQM (Top Quality Management)/Multiculturalism: What started off as a small group of 73 employees, including 20 street performers, has turned into a business of over 3,000 employees and 1,000 performing artists. This 4,000 plus workforce comes from over 40 different countries and speak 25 different languages. (Roux, 2009) This diversity creates an advantage for Cirque. The six arguments for how diversity and multiculturalism are prevalent in this case. (Griffin, 2008) 1. Cost argument: Higher levels of productivity and lower levels of turnover and absenteeism a. 200 cities over the world have been visited since 1984 b. 90 million spectators have seen a show since 1984 c. 19 different shows around the world in 2009 (in comparison to 8 shows in 2000)

i. 7 touring shows
ii. 2 arena shows
iii. 10 resident shows
iv. 1 seasonal show
d. 7 retired shows since 1984
e. 11 resident theatres
f. Average age of an employee has gone from 32 in 2000 to 35 in 2009 (Roux)

2. Resource acquisition argument: become known among women and minorities as a good place to work With over a 32 person casting crew, Cirque has a database of over 38,000 artists and receives at least 1,000 more potential performers each month. This database came in handy when Zumanity came to life in 2003. Cirque needed an acrobatic dwarf and the database provided one that had auditioned years earlier. (Keighley, 2006) 3. Marketing argument: better able to understand different market segments “While offering a full range of products for retail sale under the Big Top, at resident show boutiques and on the Internet, Cirque du Soleil is seeking reliable partners to design, develop, market and distribute unique products which will bring "artful living" into the daily lives of Cirque du Soleil aficionados.” (Roux, 2009)

Cirque du Soleil also has an email marketing campaign. They keep their members in mind by allowing them to customize what they receive in the emails. The diversity of the members are also kept in mind. A couple examples are that New York City members will not receive any information for New Jersey performances because they rarely go “over the river”; furthermore, there are guidelines which include that every email is to be personalized for each city or geographic area. (Schwartz, 2006) 4. Creativity argument: generally more creative and innovative than other organizations Refer to 2.a).i above

5. Problem-solving argument: increased pool for information In the Cirque du Soleil world conflict is avoided altogether. Negativity is banned. Pay is not talked about and ethics of luring patrons to shows are not brought up. According to Jamie Reilly, Quidam’s tour services director, “There’s a Cirque way of doing things…and then there’s the way everybody else does it.” (Powell, 2008) Furthermore, if conflict does arise, there are hundreds of employees on hand to gather intelligence from.

6. Systems flexibility argument: overall organizational system becomes more flexible As oppose to a regular traveling circus, Cirque allows performers to bring family on tour. They provide local masseuses, doctors, psychologists or dentists as required. Employees reside in either five star hotels or rented apartments. Not only are the children are provided a quality education but every employee goes through a two month training process. (Powell, 2008)

iii. Licensing/Marketing: Creators at Cirque du Soleil are developing projects in the hospitality filed. An example of such a case is the REVOLUTION LOUNGE at The Mirage Hotel in Las Vegas. Also, Cirque has worked with Celebrity Cruise line to provide entertainment on the seas called “A Taste of Cirque du Soleil”. Walt Disney World in Orlando, Florida hosts one of several resided theaters. In addition, Cirque has a multimedia division, Cirque du Soleil Images, that has produced award winning content for television and DVD. (Roux, 2009)

b) Weaknesses
iv. Production Costs: The production Ka alone cost $200 million dollars to produce. That is more than the 36 Broadway productions in 2004. The “O” theater that was mentioned earlier cost and astounding £100 million. The first resident Vegas show, “Mystère”, was a $45 million expense. Yet, it paid for itself in less than four years. Cirque du Soleil’s yearly revenue is reported at £350 million and it is estimated to be valued at £1 billion. The weakness comes in that the revenue and value would be more if the production bill was not so high. Also, with high costs come high ticket prices, which will keep people from purchasing them.

v. Cost of Tickets: Ticket prices for a Cirque du Soleil show cost between $45 and $150. There are many people that are not willing to pay such a high price to experience Cirque du Soleil. When comparing the price of a Ringling Bros. and Barnum & Bailey ticket for their recent production Zing Zang Zoom at $15 to $68, the difference is astounding. Though the show may be more extravagant, people will look at spending $45 to be up close to the show as oppose to the nose bleed section.

vi. Lack of Weaknesses: Cirque du Soleil has worked hard at covering their weaknesses. Despite the high production and ticket cost they continually grow stronger. Every one of their shows has been profitable to date and it does not look like that will change. Being so unique gives them such strength that it is difficult to find weaknesses. They have everything covered from a bank of talent to choose from as needed to establishing such an amazing reputation that their productions pay for themselves within years. This can be a case though that their lack of weaknesses is a weakness. This can tend to influence people and if it is perceived that there are not threats or a weak spot then it can surely find them.

3. Opportunities/Threats
c) Opportunities: This has been yet another difficult segment of the analysis to analyze. The analysis: Cirque du Soleil has their bases covered and takes advantage of every opportunity that becomes available. They have traveling, and stationary shows. They performed on cruise ships and for television and movies. They have specialized their marketing to a point that other companies follow their example. They make their own make up and costumes. They have a plethora of merchandise available for their fans and are now moving into the hospitality field. The only thing they do not do is use animals in their shows, but then they would be lowering themselves to the standards of an everyday circus.

d) Threats
vii. Ringling Bros. and Barnum & Bailey: This is a circus that is moving with the times. They have now created a new show that, like Cirque du Soleil, contains a story line. Zing Zang Zoom is centered on gravity, and Mr. Gravity wants to ruin the circus. As mentioned before the ticket prices for a Ringling show is much more cost effective and with the animals they appeal much more to the younger children then the theatrics or Cirque. Ringling too, has a circuit of several shows traveling at one time. Though they may not be global they are much more relatable to Americans then Cirque du Soleil.

viii. Economy: In a recession people go over their budgets and many wants get cut or downsized. Entertainment is among these wants. People will find cheaper, if not free, alternatives to their past luxury. With ticket costs at a price of more than a tank of gas, the gas will win the budget battle. If a form of comparable entertainment that is cheaper becomes available the less expensive alternative will become center stage. Quality comes has many perspectives and during a recession value-based perspective becomes a driving factor in the decision making process.

Besides losing customers in a recession, business partners can become scarce. Cirque does show profitable numbers; however, fewer opportunities will come to pass in such times. One such example has happen in New York City. Plans to build a resident theater in Manhattan are “Dead,” according to Laliberté. Yet he continues to be optimistic and adds “So instead, you come in by the backdoor…or even a window.” (Collins, 2009) This is yet another testament to the success of Cirque du Soleil.

ix. Scandal: Scandal is a common threat to the entertainment business. It is not an ingredient for guaranteed failure, sometimes it has the opposite effect and creates intrigue and infamy, but it does cause many loyal and potential customers to turn away. Two scandals involving Cirque du Soleil. The first happen in 2003 when Matthew Cusick, an aerial gymnast, was fired after testing HIV positive. This was preceded with protests and a payout of $600,000. The second and most recent controversy is centralized around Laliberté and book chronicling his supposed scandalous life. It is written that events funded by Cirque du Soleil consisted of drugs, prostitutes, and celebrities.

Except the most disconcerting statements were made by his ex-girlfriend Rizia Moreira. She was quoted as saying “He’d come home after sleeping with other women and have sex with me… If he had told me, I never would have had sex with him.” (Adams, 2009) Laliberté disputes her claims and other allegations and is demanding that the unauthorized biography be taken off the shelf. How will this plus the decline in economic stability effect ticket sales?

4. References list/parenthetical citations
(2004, April 22). Cirque du Soleil to pay $600,000 for disability discrimination
against performer with HIV. Retrieved July 28, 2009, from eeoc.gov Web site: http://www.eeoc.gov/press/4-22-04.html

Adams, G (2009, June, 16). Billionaire impresario sues over tale of sex and drugs and Cirque du Soleil. The Independent, Retrieved July 20, 2009, from
http://www.independent.co.uk/news/world/americas/billionaire-impresario-sues-over-tale-of-sex-and-drugs-and-the-cirque-du-soleil-1706008.html

Cirque du Soleil's Journey of Man. Retrieved July 13, 2009, from sonypictures.com Web site: http://www.sonypictures.com/classics/cirquedusoleil/about_cirque/cirque.html

Collins, G. (2009, April 29). Run away to the circus? No need. It's staying here.. The New York Times, Retrieved July 27, 2009, from http://www.nytimes.com/2009/04/29/theater/29circ.html?_r=1

Jones, A (2009, Jan, 06). Behind the scenes at Cirque du Soleil. The Independent, Retrieved July, 13, 2009, from http://www.independent.co.uk/arts-entertainment/theatre-dance/features/behind-the-scenes-at-cirque-du-soleil-1227790.html

Keighley, G (2006, Jan, 26). The phantasmagoria factory. Business 2.0, Retrieved July 27,2009, from http://www.thelavinagency.com/images/uploads/1216060062_Business20-CirqueDuSoleil.pdf

Powell, L (2008, Dec, 20). Inside the secret world of Cirque du Soleil. Times Online, Retrieved July 13, 2009, from http://entertainment.timesonline.co.uk/tol/arts_and_entertainment/stage/article5320102.ece

Roux, M (2009, Mar 25). Cirque du Soleil at a glance. Retrieved July 13, 2009, from cirquedusoleil.com Web site: http://www.cirquedusoleil.com/CirqueDuSoleil/en/Pressroom/cirquedusoleil/factsheets/cds_glance.htm

Schwartz, N. E. (2006, June 08). Follow Cirque de Soleil's marketing footsteps for big top success. Retrieved July 27, 2009, from gettingattention.org Web site: http://www.gettingattention.org/my_weblog/2006/06/follow_cirque_d.html