Strategic Management Analysis - Case Study Example

STRATEGIC MANAGEMENT ANALYSIS Strategic Management Analysis Introduction Founded in 1984 by Guy Laliberté and a group of street performers, the Cirque du Soleil (Circus of the Sun) is a Canadian entertainment company headquartered in Montreal (Smith 2013) with more than 5,000 employees, 1,300 artists, and more than 100 million spectators (Cirque du Soleil 2014). Industry Analysis This includes the definition of “products and markets, skills and competitors contained within the industry, industry structural analysis, and key success factors for the industry” (Boulton 2001, p.1). Although Cirque du Soleil is now the biggest theatrical producer, it faced numerous challenges since its Slišković 2014, p. 3). However, the company managed to succeed in a declining market. Indeed, the company sponsored circus training in after-school clubs, activity break holidays, and team building sessions for professionals that improved the perception of Circus performance as an entertaining art (Smith 2013). Additionally, the capacity of the company to address national and local government agendas in Circus performance attracted public subsidies for the company thus boosting its financial stability (Aesthetica Magazine Ltd 2014). The business plan adopted by the company that entailed professional input, good leadership, and better organization structure enabled the company to make and implement important market decisions (Fortes 2011). The huge number of employees and artists that defined the operations and performances of the company helped in the implementation of the company’s market strategy (The Culture Trip Ltd 2014). The launch of the new touring show in Montreal, Amaluna by Cirque du Soleil in 2012 enhanced the company’s market presence while the development of new creative and production service dedicated to businesses and artists increased the company’s capacity (Cirque du Soleil 2014). In considering the welfare of circus animals, the company eliminated animal acts, which enhanced compliance with government and legal policies (Fortes 2011). The launch of new resident production inspired by international celebrity in 2013, three new permanent shows in 2008, the three new productions in 2010, and the launch three new shows in 2011 defined the company’s potential to diversify its performances and address the needs of the audience (Cirque du Soleil 2014). Moreover, the inauguration of the 15, 000-square-metre addition to its International Headquarters in Montreal in 2001 and the redesigning of the tent sought to derive a high degree of audience comfort and a sophisticated external image (Cirque du Soleil 2014). The focus on star performers and adopting ideas from the theatre ensured that the company stayed relevant to audience needs (The Culture Trip Ltd 2014). The expansion of the shows and the hosting of different shows in permanent and temporary venues enhanced the audiences’ access to Cirque performances that followed stories lines. Scenario Analysis Ideally, Cirque du Soleil focuses on performing circus styles by adopting a central theme within a given plot. Such performances entail original live music featuring performers with differing skills. As such, most of its shows have similar aesthetics that define a Cirque du Soleil show. The company hosts Cirque performances in different public spaces across the globe. While some performances take place in tours, the company hosts multi permanent performances in Las Vegas (Pan-Canadian Assessment Program 2014). In a scenario where the company will have to change the components of its performances to include celebrity acts or where reference governments ban Cirque performances in public spaces like Las Vegas, the Cirque du Soleil will have to change its strategy. Where Cirque du Soleil will have to include celebrity acts, the company will be changing its organizational culture. This will have significant effects since the audience has a clear understanding of its performances, aesthetics, unique stories, themes, performers with differing skills, and original music. The inclusion of celebrity acts may relate to the dynamics in the circus industry and changes in audience needs. Indeed, in this competitive environment, Cirque du Soleil may have to include celebrity acts with a view of creating a competitive advantage by attracting a greater audience to the Cirque events. However, this will mean that the company will have to do without continuous original music for every production as the celebrities include their compilations in the performances. This will definitely come at a cost since the ‘circus celebrities’ will demand for high fees compared to the initial performers. This will have an overall effect of increasing the production costs and reduced revenues since such celebrities may not have the goodwill to attract a greater audience. To avert these implications, the company must only include popular celebrities in the acts to attract a greater audience, which will result to increased number of circuses in operation and higher revenue from ticket sales. The company will also integrate the celebrity acts with the performing artists with an aim of maintaining the original audience. The celebrity acts should grace the climax of the Cirque performances both in permanent venues and in world tours. The celebrity acts should include live performances, creative acts, and theatrics. On the other hand, in a scenario where reference governments ban Cirque performances in public spaces like Las Vegas, the Cirque du Soleil will have to change its strategy. Indeed, this will have a significant effect since permanent shows attract a huge audience since they host a portfolio of different shows with a series of related displays (Pan-Canadian Assessment Program 2014). The huge audience that attend Cirque performances in public place increase the total number of spectators experiencing Cirque du Soleils shows worldwide, which is the company’s strength (Chartered Institute of Management Accountants 2007, p. 5). As such, this scenario will reduce the company’s market presence and revenues derived from ticket sales and concessions from products sold during the shows in the public spaces. The company will lose its competitive advantage. To avert this crisis, the company must consider changing its strategy by investing more on world tours. This will involve altering the calendar of events for the convenience of performing artists, celebrities, audience, and other stakeholders sponsoring the events. Indeed, the company can also establish partnerships with interested parties that will host Cirque performances and finance the building of private theatres (Chartered Institute of Management Accountants 2007, p. 5). Moreover, the company will invest huge resources on building private theatres designed for Cirque performances at the company headquarters and branches. The company will diversify and market its operations by establishing television deals to broadcast Cirque performances and venturing in other related businesses like selling the Cirque du Soleils shows merchandize. Works Cited Aesthetica Magazine Ltd 2014, Circus The Forgotten Art, retrieved 27 June 2014, Boulton, W 2001, Understanding the Strategic Analysis Model, retrieved 27 June 2014, Chartered Institute of Management Accountants 2007, Strategic Analysis Tools, retrieved 27 June 2014, < http://www.cimaglobal.com/Documents/ImportedDocuments/cid_tg_strategic_analysis_tools_nov07.pdf.pdf> Cirque Du Soleil 2014, CIRQUE DU SOLEIL AT A GLANCE, retrieved 27 June 2014, < http://www.cirquedusoleil.com/en/home/about-us/at-a-glance.aspx> Cirque Du Soleil 2014, Cirque du Soleil, retrieved 27 June 2014, < https://www.cirquedusoleil.com/en/press/kits/corporate/cirque-du-soleil/history.aspx> Fortes, E 2011, Circus the Forgotten Act, Aesthetica Magazine, retrieved 27 June 2014, Pan-Canadian Assessment Program 2014, Cirque Du Soleil, retrieved 27 June 2014, < http://www.lasvegas-nv.com/cirque-du-soleil.htm> Slišković, T 2014, Cirque Du Soleil, retrieved 27 June 2014, >http://web.efzg.hr/dok/OIM/tsliskovic/Cirkus Sunca Case.pdf> Smith, M 2013, Cirque du Soleil performer killed in Las Vegas show, CNN, retrieved 27 June 2014, < http://edition.cnn.com/2013/06/30/us/nevada-cirque-death/> The Culture Trip Ltd 2014, Cirque du Soleil: The Circus that Took Over the World, retrieved 27 June 2014, Read More