Cirque Du Soleil

When evaluating Cirque du Soleil's (CDS) internal situation, we can notice that its strategy in finding a blue ocean - a market space of its own and creating new demand - has been successful with crowded shows regardless of high ticket prices. With a quick SWOT analysis we conclude that CDS's strengths at the moment are the global recognition of the brand standing for an innovative high quality cultural experience. However, it has its weaknesses in the field of cost structure and finance management, especially after the resignation of Daniel Gauthier - "the numbers man". With a threat of ever tightening competition, the blue ocean is starting to turn into a red ocean.

The main factors behind CDS's current success assessed by combining the resource-based and competitive positioning view are a high differentiation in positioning and innovative ideas. They also have the capability to attract best talent of performers and they own IPR related to the equipment used in the shows. CDS's X-factors of HR-management, premises and support functions of materials are taken well care of, with the exception of execution hole in launching and financing of its mega-complex projects.

When it comes to macro-environment factors contributing to CDS's success, we can generally conclude that government support has had a significant role in CDS's success, as they have provided CDS with funding and land. From Porter's the five forces analysis' point of view, we can also discover, that barriers of entry to the modern circus industry are not that high with new graduates starting competing shows, but entering into the same strategic group as CDS requires higher stakes and experience. These factors put CDS in a beneficial position, when a third force, competitive rivalry, is starting to get more intense due to low switching costs of the customers.

CDS's industry of modern circus is about to reach its maturity, which means that the center of gravity is moving from marketing to operations. In addition and due to the changes of new entries and competition mentioned above, there have been big changes in the cost structure of the modern circus industry. The labor-intensive nature of the industry combined with high demand of top talent leads to higher labor costs. With their comprehensive HR-policies, including e.g. four star hotel accommodation for performers, this sets challenges to CDS's already high cost structure. This might be one the reasons for CDS's higher ticket prices relative to those of competitors, which might make consumers prefer competitors.

Based on the assessment presented above, we conclude that there are a couple of possible scenarios for CDS to maintain its success. First scenario for CDS with small risks and small pay-offs is to focus on its core competencies and strengths. In this scenario CDS should abandon the attempts to find