Strategic Case Study2

AMERICAN INTERNATIONAL UNIVERSITY BANGLADESH

Faculty of Business Administration Report Cover Sheet Students must complete all details except the faculty use part.

Please submit all assignments to your subject lecturers or the office of the concerned lecturer. Assignment Title: CIRQUE DU SOLIEL: CAN IT BURN BRIGHTER? Report Number: 2 Due Date: ___23 April 2012_____ Semester: SPRING 2012 Subject Code: 01273 Subject Name: STRATEGIC MANAGEMENT Section: C Course Instructor: BOBBY, HAJJAJ Degree Program: MBA Declaration and Statement of Authorship: 1. I/we hold a copy of this assignment, which can be produced if the original is lost/ damaged. 2. This assignment is my/our original work and no part of it has been copied from any other student’s work or from any other source except where due acknowledgement is made. 3. No part of this assignment has been written for me/us by any other person except where such collaboration has been authorized by the lecturer/teacher concerned and is clearly acknowledged in the assignment. 4. I/we have not previously submitted or currently submitting this work for any other course/unit. 5. This work may be reproduced, communicated, compared and archived for the purpose of detecting plagiarism. 6. I/we give permission for a copy of my/our marked work to be retained by the School for review and comparison, including review by external examiners.

I/we understand that 7. Plagiarism is the presentation of the work, idea or creation of another person as though it is your own. It is a form of cheating and is a very serious academic offence that may lead to expulsion from the University. Plagiarized material can be drawn from, and presented in, written, graphic and visual form, including electronic data, and oral presentations. Plagiarism occurs when the origin of the material used is not appropriately cited. 8. Enabling plagiarism is the act of assisting or allowing another person to plagiarize or to copy your work

Group Name (if applicable):

Group 5

No.

Student Name

Student Number

1.

SHIFATARA, MST.

10-94024-2

23 April 2012

2.

HASSAN, ZUBAER BIN

10-93962-2

23 April 2012

3.

WAD, MD. AL. AS.

09-93373-3

23 April 2012

4.

IRSHAD, MASROOR

10-93996-2

23 April 2012

5.

HASAN, MD SAIFUL

10-94203-3

23 April 2012

6.

JAHANGIR, KAISAR

11-94412-1

23 April 2012

For faculty use only:

Student Signature

Date

Total Marks: _______ Marks Obtained: ________

Faculty comments__________________________________________________________________________________________

Cirque Du Soleil was founded by Guy Laliberte, Gilles Saint-Croix and Daniel Gauthier. The firm blends opera, dance, theatre and circus with live music, excellent choreography and amazing pyrotechnics. The firm intends to present the circus in a different way which moves people’s emotions and takes them to a happy peaceful world. Recently firm is facing competition and therefore the firm need to improve and sustain their current position and move in new areas of similar kind of business. Mission/Vision: Cirque Du Soleil is an international company which is dedicated to the generation, production, and performance of entertaining and artistic works, with the mission of invoking the imagination, the senses, and the emotions of the audiences all over the world. The vision of the company is to achieve great artistic creativity & commercial success together, at the same time produce new shows to meet audience changing expectations with time. They always welcome the creative people. Goals and Objectives: The main goal of the company is to be able to produce high-quality artistic entertainment to audiences on different parts of the globe with different cultures. Their aim is to be the number one entertainment provider with over 2,500 employees who are professional in their fields & that will help them to grow bigger. At the same time they always want to keep the hold of the control on their firm. Analysis: Analysis on internal resources and capability show that they have a very good Human Resource Management that takes good care of their employees and even manage talent hunt so that there is never a shortage. Brand image and Management skill is the resources which can be work as competitive advantage. Brand image: Cirque Du Soleil is very renowned in entertainment industry. They have 20 years of experience. They have been performed over 90 cities and about 37million people have seen their show. In every show they performed stunning and shocking. The president

of the organization Mr. Guy Laliberte is known as creative dreamer in the industry. Cirque Du Soleil also has gathered many awards in many categories. So the organization has strong brand image which is valuable, rare, not imitable and non-substitutable. Headquarter: Cirque Du Soleilµs headquarter is located on seventy five thousand square meters of land in the North End of Montreal. Formerly it was a waste dump area, Building the headquarters in that area was a part of an urban revitalization plan for that area. This large headquarter may give the organization a competitive advantage as it is valuable, rare, non-substitutable and competitors cannot copy it very quickly. Cirque’s competitive advantage will help in managing the expanded business in the future. This competitive advantage will be core competencies as it is portable to operate different products. From the core competence aspects, one of the strengths of the company is their fast and intensive transfer of operational capabilities across the expanded markets. In addition, the company also has the ability to develop new innovative solutions to meet changing demand of the audiences at different parts of the world and at the same time they are fulfilling the corporate social responsibilities by providing 1% from the ticket price. From the portfolio perspective, the core competencies of the company are its experience of international operations. The external analysis comprises of industry analysis includes the competitors and financial analysis. As they performed in many cities and achieved many awards and still have a lot of demand for shows and there is also high demand for jobs, these shows that they have strong product features and brand positioning, for example shows are like “Saltimbanco” & “Varekai”. They make small profit ranging from 15% to 20%. However it has local competitors who have international recognition and also foreign competitors. The financial analysis reveals that one problem the company is facing to diversify and expand its business is due to the lack of internal financial resource. Although the company has sufficient liquidity to maintain and sustain its position but in order to expand its business, the company requires large sums of money which it is unable to generate internally. The company is looking for partners and even came to arrangements twice with

two institutions but both times the projects failed once due to exclusivity disagreements and the other time due to economic downturn. Regarding merge and acquisition aspects, organizational culture is one of the important factors of it for the succession. Many acquisitions fail due to lack of cultural adjustment between two companies. Cirque Du Soleil is a decentralized organization. It has offices in America, Middle East and Europe, Oceania and Africa. Very smoothly it is managing its twenty five hundred employees from forty nationalities speaking in twenty five different languages, Organizational culture may also work as a competitive advantage for the company and able to sustain in the acquisition process, but the financial condition might not give right to invest in such project as the premium cost of acquisition normally go up to 100% which company cant invest at this position. Cirque has thousands of great performers from different culture and country. The performers will help the company to diversify in the product line, by working for the television program and creating more permanent shows. Through this the performer will be famous worldwide and more customers will come to watch the show. Strategies: To ensure that Cirque Du Soleil stays at the forefront of the industry, the company should follow the following strategies. Cirque must continue to scout for potential talent in the Olympics and the sporting events but also improve the training programs for their future performers. This would lead to an elevated talent pool and result in consistent quality of their shows. The company should diversify its product line which would include building the Montreal Mega Complex and improving the quality of the television show by telecasting on regular basis and capture more spectators globally by worldwide telecast to add further value to their brand image. Cirque’s organizational culture is strong enough that they could able to go for acquisition. The premium cost might be the problem for the company as currently they are in sort of

money. Acquisition could be there for long run strategy. They can merge with small similar company like “The Cirque Eos”. Company’s main revenue comes from the ticket sale and some of the competitors offering similar show at a lower price. Company’s cost structure is very high and for that they can’t cut the ticket price. They should offer discount on the ticket price or other offers to attract new viewers and to retain their loyal customers. By doing so company will able to gather more customers and increase in profit. The company should go public and initiate an IPO to gather finance for its strategies. Funds from the IPO should be used to finance the Montreal Mega Complex and provide extra benefits in improving or implementing other strategies. This would add great weight to the company’s capabilities and increase its reputation and hopefully its success as well but should not change the control. Conclusion: Based on the analysis, it can be concluded that Cirque Du Soleil has a great potential overcome the problem and current position. Analysis has shown that there are many potential clients for the product and through the use of integrated strategies; the product will be able to gain good reputation and success.