Mngt 541- Cirque Du Soleil Strategic Thinking

MNGT 541 Strategic Thinking
Professor Joseph Zagerman, MBA
March 4, 2013

Table of Contents

Abstract ......................................................................................................... 3

Introduction .................................................................................................... 4

History ........................................................................................................... 4

Strengths ........................................................................................................ 7

Weaknesses ................................................................................................... 11

Opportunities .................................................................................................. 13

Threats ......................................................................................................... 15

Company Evaluation ........................................................................................ 17

Recommendations ........................................................................................... 20

Conclusion .................................................................................................... 21

References ................................................................................................... 22

Abstract

Cirque du Soleil is a fusion of Broadway, gymnastics, street artistry, cinema, and circus-like thrills. It is a privately held company built on the creativity of artists with artists being defined as the performers of the grand spectacle. The artistry transcends cultures and languages and reaches into the emotions of all involved. The creativity is at the heart of the company. The creativity underlines the company success and is critical to its viability. This paper delves into how creativity is the foundation of the company and how such creativity has guided the business decisions to date. It identifies several corporate qualities which explain various strengths and weaknesses as well as several outside forces posing as potential opportunities and threats. The paper closes with concluding remarks and recommendations for the currently successful Cirque du Soleil.

Cirque du Soleil is a privately held company which has evolved in the past three decades to become a corporation with revenues exceeding one billion dollars. The success of the company has been based on the visionary direction of one its founders, Guy Laliberté. The Laliberté vision was to create and is to maintain a company whose artists are free to develop and learn the creative art of expression. The company has mastered the ability to draw on emotions of people with little depth in strategy. The width of the product offered crosses cultural and language divides and unites many in the spirit of creativity.

Cirque du Soleil is in its maturity stage of its organizational life cycle, particularly as situated in the entertainment industry in North America. Cirque du Soleil does have to cope with various influences from its external and internal operating environments. And, with the eventual resignation of the company's visionary and founder, it is becoming increasingly important for the company to develop succession strategies and develop tighter strategies regarding growth and product development. These strategies will help the company to draw on its internal strengths in order to capitalize on opportunities and to reduce threats, continuing to set itself apart from all the rest.

History

Organizational Background

Cirque de Soleil was established in 1984 by a group of street performers in Quebec City. The group was commissioned to perform at a local festival. The organization started with few people in the beginning, but, with time, the organization grew in size. By the end of 2001, the organization had 2,100 employees and 500 artists worldwide. The company nearly tripled in size in the following ten years. At the end of 2011, Cirque du Soleil had 5,000 employees and 1,500 artists, representing 57 nationalities all under its Circus of the Sun banner (Eng, 2011).

Guy Laliberté and Daniel Gautier established the organization, equally sharing the ownership but splitting the business responsibilities. Laliberté was responsible for creative production while Gautier handled business management affairs including outside business partnerships and company finances. After 14 years of shared ownership, Laliberté bought Gautier's shares and became sole owner of the company. Laliberté currently serves as the president and chief executive officer. The company has evolved from a dual owner to a single owner private company, but ownership was not the sole change undertaken by the company.

Cirque De Soleil evolved through the years going from a small local phenomenon to one internationally regarded. During the mid 1990's, the company attempted decentralization of management from Canada to North America, Europe and Asia to better support the shows in different parts of the world. However, the decentralization fell apart. The management eventually recentralized in Montreal, Canada. Although Cirque de Soleil started with small-scale performances it was always open to globalization. Under the visionary work of Laliberté, Cirque de Soleil performed outside of Canada for the first time in 1987. The show was taken to Los Angeles, California. Laliberté was able to bring the show to America thanks to a loan secured with the Canadian Government. The Los Angeles show became successful, garnering devoted audiences to Cirque de Soleil. The success in America helped finance and led to future worldwide shows for Cirque de Soleil, which eventually started recruiting artists from all around the world.

The Cirque du Soleil Vision

Guy Laliberté has never compromised the creative side of the show. Instead, he embraced and continues to embrace creativity. Recall Laliberté managed the creative production of both the touring and permanent shows from the outset. He also took part in performances, showing his gifts as a fire-breather and stilt walker. Part of the original