Cirque cas study

2) What should be incremental or disruptive improvements to existing strategy?

2.a. What does the situational analysis reveal about market opportunities and threats in Dubai?

Why positioning on Dubai? Dubai is a pretty small market, much smaller than Tokyo or Macao. The number of visitors in 2007 was 5,863,509 million. However, the rate of visitors has increased from 12.1 in 2005 to 3.4% in 2006 and to 7.1 in 2007. The number of visitors is therefore growing, even though there is less potential in Macao for example where this rate reaches nearly 23%.

(“As companies compete to embrace customer preferences through finer segmentation, they often risk creating too-small target markets.” W. Chan Kim. )

Moreover, economic indicators are more pessimistic regarding the country's inflation rate, which explodes all records to 14%.

In Dubai, the market analysis reveals that the indicators are more or less good, and market remains less attractive than in Macao. The increase of the inflation is particularly worrying because it is very high, but especially, it increases. The benefits of Dubai would lay more on the prestige of the destination, its tourism potential and the number of investors with large means, in a destination that opens more and more to the world of entertainment and media.

2.b. Could Cirque apply a blue ocean strategy in Macao, Tokyo, Dubai, and still be a break-away brand?

A blue ocean strategy is a strategy, which links to creating a product or a service, which by its value, will be brand new. This is therefore an unknown market, uninfected by competition. In the blue oceans, demand is created rather than conquered. The competition does not exist because the rules of the game do not exist and are to be written yet.

According to the authors W. Chan Kim and Renée Mauborgne, the objective of companies should therefore be to permanently create new blue oceans, because around 10 years later, with the arrival of competitors with an imitation strategy, they become red oceans.

In the Cirque du Soleil case, Cirque had a fast and dazzling success, the competition quickly arrived, with for example, Franco Dragone and its show "Celine Dion" or with "Le rêve » in Las Vegas. Today, Las Vegas is clearly a red ocean for Cirque du Soleil, not to mention the fact that regarding the price strategy (which placed Cirque du Soleil shows on top of the range with a price set at $ 121 before the arrival of Franco Dragone), Cirque can no longer use Price for positioning in Vegas. The psychological price of a ticket in Dubai, would not allow Cirque du soleil to make a lot of money, but would mostly cause a big loss; this despite all the performance Cirque can offer. Cirque has entered a situation of perpetual innovation, in a vicious circle where it is necessary to make more impressive and artistic shows every time, requiring financial investments more and more important and all that against more and more competitors. This will also be the case in Dubai where the brand will have no choice than soon establish the same pattern of development as in Las Vegas: Cirque arrives little by little at its stage of maturity (Michael Porter).

According to Phillip Kotler; it is either to revive the business by differentiating much more, or to significantly reduce costs or to specialize and focus its activity in order to get the best out of it.

Cirque retains the advantage of being among the first of its kind to take hold, despite increasing competition from entertainment industry in Dubai.

 2.c. Has Cirque selected the corporate partners who would act as sustainable financial leverages

The main risk applies to a more political and human perspective.

Indeed, Cirque du Soleil emphasizes its choice to place the "human" aspect at the heart of its projects and decisions. The United Arab Emirates, Dubai, is a destination that may be interesting from an economic and artistic point of view, but complicated because of its government, which tends to be a subject of lively debate in most other countries. Dubai, where forced labor and child labor have long - today may still be - customs. Most of the inhabitants are expatriates (the emirates represent only 11% of the population) and many are either Indians, Pakistanis or from Bangladesh, they are often paid a misery and do not have the same rights as the UAE. For the construction of its infrastructure, the circus should participate, indirectly, in this type of practice. For the image of the brand, the intensification of partnerships with wealthy emirates and real estate developers is not a good thing. The ideal would be to find an alternative solution, such as tents, to also do a reminder in the name of the sign that is "circus".

What can be emphasized is that the financial risk is still important, given the unstable situation of the political context, and the very specific laws of United Arab Emirates, which tends to reduce the power of foreign companies over the market, to favor the Emirati population. What's important to Circus: Keep its own values, freedom, artistic decisions ... could circus keep its sovereignty?

2.d. How would you rank the marketing projects, following feasibility studies and levels of risk? 

In order to appreciate the level of risk, we will use a risk calculator:

→ The risk rate is at 55%, which mean that there is a 55% risk, and a 45% of success.

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