Case Study – Cirque Du Soleil
Case study: Cirque du Soleil SWOT analysis: Strenghts: * Very methodical approach of each project. * Planning process * Very efficient * Planning strategy starts 3-5 years before the event * Administrative side very accurate: * Detailed nomenclature on setup and tear-down tasks: everything must be done in a precise order, because tasks can only carried out once others have been completed. Nomenclature allows the company to ensure the proper packing and labelling of goods. * Speed and efficiency of each show is transferred from one site to another (Efficient dimanstle, repack and re-installation). Technology management allows them to reduce setup time by 25% (created an environment adapted to its own needs): computing hardware, communication by optic fibres and satellite… * Young, dynamic, passionate, adventurous, creative and open-minded entrepreuners.
* Creativity of logistics professionals to apply the right logistic management (Professional planners and logistician). * High linguistic competencies allowing the company to deal efficiently with all aspects of logistics when moving from one city to another. Team work and intense collaboration with numerous internal and external stakeholders, for example business partners representing precious allies. * Strong reputation on a global scale. Weaknesses: * Dependence on the weather conditions – implying show cancellation, and thus resulting in a complete write-off because of the impossibility to reschedule a cancelled show.
* Very high fixed costs; it makes profits only if the number of tickets sold exceed the overall costs. * Specialized equiment is very expensive. Dependence on the communication infrastructures of the countries (particularly for ticketing systems). * Dependence on different customs formalities before entering and leaving each countries. * Complexity of the dimensions, fragility and weight of the material.
Opportunities: * Turkey provides basic municipal services, roads, transports, water and security free of charge. * Preferential rate for electricity (> 20% reduction in the fixed costs). * Turkish TV and entertainement can negociate an attrative location and a good price (Istanbul). TTE’s proposal ; Expect to boost box office revenues by an additional 50% through sponsorship (perhaps 80%) * Expertise Turkish market * Source of knowledge of major local subcontractors. * Flexible and “fixed show fees” arrangement.
* Anticipates a market of at least 100 000 tickets just for Istanbul * TTE promoter for other countries * Opportunity to have a local partner (facilitate the knowledge of the territory, consumer habits, local actors, top quality sites and save costly process of trial and error). Remove operational obstacles and reduce uncertainty. * Turkey has been designated as the European Cultural Capital in 2010 – Turkey is expecting 10 millions tourists … a potential audience for ‘le cirque du soleil’.
* They like challenge and they are extremely motivated to enter this market Threaths: * Supplier/ partner reliability (trust). * Poor administration (not flexible, problem to obtain visas). * The customer is unusual (government). * Additional expenses for the promotion of the production (find sponsors). Cirque has less time than usual (it implies more costs).
* Change in Turk’s habits : Cirque would be unable to release tickets in advance (logistics issues) whereas shows ticket are usually released for sale 8 months in advance in Turkey (it will implies less tickets sold). * Turks have a weak buying power. * Cirque has never visited Turkey before and thus never tried and tested partnerships in this region and the lake of knowledge of the market (about Turk’s cultural interests, about tax laws and about how easy it is to get money out of Turkey) may be a huge challenge.