Abstract
Cirque du Soleil is an entertainment company that has been in operation for 29 years offering services across the world. Since its establishment, the company first engaged in offering entertainment services with elements of the traditional circus like the many entertainment companies in Canada until the year 2004 when it decided to employ a new strategy in the operations.
In the year 2005, the company had to revise the strategies of operation to retain the image as well as gain competitive edge in the market. The company introduced the blue ocean strategy in its operations to explore opportunities in the market as well as establish a brand that does not have any competitor. To build its image the company operates with a multi cultural workforce as a way of appreciating different cultures in the world.
Introduction
Cirque du Soleil is a Canadian entertainment company that staged its first performance in the year 1983 but later offered the services to other parts of the world. The company was initially known as an entertainment company, which staged entertainment shows with elements of traditional circus, opera, and theatre.
In the year 2004, Cirque settled a case against HIV discrimination by paying US$ 600,000 to Matthew Cusick one of the performers who had filed the case. To retain the image of the company the management had to review its policies by ensuring that there is no discrimination within the company and this resulted to the formation of a new strategy to operate the business (Tischler, 2005).
The company settled on the strategy of creativity and innovation to gain competitive edge in the market. Cirque had a unique way of recruitment and selection with a multi-cultural workforce where each employee worked where he or she was best talented. The company, which had begun with 73 performers in the theatre, expanded in the year 2007 when the number of performers increased to 3,000 from different backgrounds (Hogg, 2005).
Literature review
There are several driving forces for a company to move from the red ocean strategy to a blue ocean strategy. Due to accelerated technology in the world space, industries have been forced to produce and supply what is new and has high demand in the market in order to be competitive. In addition, the emergence of globalization has led to the free trade among nations, which has accelerated creativity and innovation in organizations (Hamel, 1998).
Through the research that was conducted investigating the performance of companies, applying blue ocean strategy verses the red ocean strategy in their operation it was discovered that the blue waters yield a lot of revenue and profits compared to the red ocean strategy. Studies indicate that competition on the same line of business has made it hard for companies to penetrate their brands to the market once the competitors are established in the same market (Zook, 2004).
Research methodology
The research was conducted within the company whereby the sample of the study was the employees and the management of Cirque de Soleil. There is use of both qualitative and quantitative approach as primary research in collecting the required data as well as the analysis.
The structured questionnaires were used to collect the self-reported data that is the qualitative and quantitative data. The semi-structured interviews in the form of questions were also used to collect the quantitative data for analysis. The study employed both methods to collect data as a way of maximizing the possible results.
Findings
The blue ocean strategy
Cirque du Soleil is a company that employed the blue ocean strategy as a way of creating value on the services it rendered to the customers to survive in the competitive entertainment industry. The company therefore engaged in the practice of innovation and creativity to ensure that it came up with new practices to render to the market.
The company, which used to stage shows of tradition circus, opera and theatre like any other entertainment company in Canada, reinvented its services to differentiate them from any other circus industry in the market (Zook, 2004).
The company worked hard to come up with innovations and creativity that were different from the normal traditional circus in the market hence creating a new demand of services.
All the presentations by Cirque included stories, different styles of circus by employees who represented the culture of the place where they came from. This eliminated all what was common in the traditional circus like the animals and the commonly known performers. By doing all these, the company provided unique services to the market that attracted many customers (Chan & Mauborgne, 2002).
In the process of coming up with new services the company, had to ensure that it reduced the costs associated with production of the traditional circus for it to offer services to the customers at reduced price as a way of attracting and retaining the potential customers. Cirque made sure that it used the available opportunities in the market through producing sophisticated theatrical narratives as a way of eliminating the barrier. This created a market for the company where there is no competition (Khutko, 2007).
The company came up with new ways of marketing the products so that it can attract and retain customers through the entertainment according to the preferences of the customers.
Circus redefined its audience by targeting the educated as well as the sophisticated. It therefore had to change the face of opera, which was mainly for children in the traditional circus to fit into the needs of adults as well as families. Through such changes, the company was able to create a live entertainment, which had new demand in the market with no competition (Screen Source, 2002).
Through the innovativeness and creativity of the employees, the company introduced a new line within the business, which included the sale of accessories and apparel as a way of generating more income. The sale of tickets, t-shirts and license agreements generated revenue amounting to 85% per cent of the company income. This enabled the company to survive as well as expand its business as other companies in the Circus industry were declining (Tischler, 2005).
In the application of the blue ocean strategy, the company invested on the future, as it focused on the increased revenue for the company. At the beginning, Cirque invested money and time to design new sets and costumes. The company had spent US$ 165 million in creating the theatre at Las Vegas. With the high expenditure, the company had focused on how to get the opportunity like the one in the year 2007 where it had estimated revenues of more than US$ 600 million (Hogg, 2005).
Organizational structure
Through the innovation and creativity strategy Cirque has facilitated the growth and expansion of the company not only in coming up with new designs of shows but also diversification. The company is therefore based on the structure that recognizes the value of the employees within the organization. For the employees to be innovative and creative they require a favorable working condition where they are able to settle and take their time in coming up with new ideas beneficial to the company (Gladwell, 2000).
In the company, the artists were recognized as people who represented the value of the company and they were therefore served well by other employees like the tour staff who were to cater for their needs. Each category of employees within the company had their roles to perform as a way of achieving the success of the company.
As much as the artists were viewed as people representing the value of the company, they were not the people at the top hierarchy in the organization. They were the most productive people in the company and hardworking. The artists did not have the authority to make decisions of the company but they formed the base of the organization (Hogg, 2005).
The other members of staff were also said to be offering supportive services, which enabled the company to achieve its goals. They are the people who could make decisions on the practices of the company as well as serve the interests of the artists as the main role in the organization.
The support staffs therefore are in the next level within the circle on which the company operates. The other categories of the employees within the organization are also defined as being in the same circle as the supportive staff since their major role is to look at the interests of the artists who form the basis of the organization. The director of Cirque Vincent Gagne always emphasized that the tours and the technicians’ role was to serve the interests of the artists (Khutko, 2007).
Recruitment and selection
Cirque had a multi cultural workforce since it employed people from many parts of the country without discrimination. By the year 2007, the company had 3,000 employees from 40 countries. To manage the employees, the company recruited a dynamic management to cater for the need of the diverse workforce.
In order to apply the strategy of Blue Ocean the company changed its strategy of recruitment to ensure that the employees were innovative and creative to come up with the new ideas. By employing people from different cultures, the company was able to offer services that catered for the interests of all people across the world (Hamel, 1998).
During recruitment, they had to select the candidates on the basis.of creativity since they were already engaged in the strategy of innovation and creativity. They also assessed the commitment of the person since they had an organizational structure that required people who are committed for the success of the company.
The attribute of team player was considered during recruitment since the company wanted responsible people as well as team players for them to interact easily with people of different cultures without discrimination (Zook, 2004).
During selection, the company chose people who were experienced in the field for them to offer services of high quality to the clients. Cirque could therefore select the members from competitive sports who were later trained as artists to sing, act as well as play the music. For the company to succeed it always retained employees who were highly talented because their position in the theatre could be suspended if they were not available to offer the best to the audience all the time (Screen Source, 2002).
Management lessons
The following are the management lessons that any manager can learn from Cirque de Soleil and apply to succeed in the organization.
- Align the employees. In the organization, it is necessary for each employee to be focused on the main goal of the entire program. In the case of Cirque, the artists could perform with the aim of satisfying the audience while other members of staff supported them to perform their best (Chan & Mauborgne, 2002).
- Set and communicate the company’s expectations. The artists of Cirque as well as other workers in the organization were aware of their roles and the reason as to why they had to perform them. This made the employees perform their best since they knew what they were supposed to achieve at the end (Gladwell, 2000).
- The organizations should define clearly the roles of each employee, the results expected from them by the management, the task to be accomplished to achieve the results as well being informed about how the rating of their performance is done (Chan & Mauborgne, 2002). This will enable employees to perform better in their duties.
- Create a great team. Great team players result to great success because through teamwork employees are able to apply their skills and experience to come up with sustainable solutions for better decisions or better performance. The Cirque Company improved on its teamwork, which enabled it offer the best to the audience through combined talents (Digital History, 2004).
- Plan. Planning can seem to be a boring exercise to managers but again a very beneficial act to all programs that are run in the company since it helps in decision-making. When planning it is important to consider all the possible variables and options before making decisions (Balmer, 2001).
- The management should know the formulas that can work best for the success of the companies and apply them. In the case of Cirque, they are able to move from one place to another performing a unique show from time to time, which are appealing to the eyes as well as ears of the clients. They have therefore been able to balance all the performances to attract more customers across the world (Susan, 2012).
- The management should work hard to ensure that it is aware of the changing trends of the customer’s demands to survive in the competitive market. The company has to have the vision as much as it will want to satisfy the demands of the customers and know the best way to attract and retain them (Hamel, 1998).
Conclusion
Cirque de Soleil is one of the companies that has successful applied the blue ocean strategy to gain the market advantage. To shift successfully from the red ocean strategy to a blue ocean strategy a company has to revise its culture for it to accommodate the changes. Cirque has therefore set various managerial lessons that other managers and employees can emulate to win a competitive edge in the market.
References
Balmer, J. (2001). The new jet set. Retrieved from Barron’s.
Chan, W. & Mauborgne, R. (2002). Charting your company’s future. Harvard business review, 80(6), 76-85.
Chan, W. & Mauborgne, R. (1993). Procedural justice, attitudes and subsidiary top management compliance with multinational’s corporate strategic decisions. The academy of management journal, 36(3), 502-526.
Digital History. (2004). Chronology of film history. Web.
Gladwell, M. (2000). The tipping point: How little things can make a big difference. New York: Little Brown & Company.
Hamel, G. (1998). Opinion: Strategy innovation and the quest for value. MIT Sloan Management Review, 29(2), 8.
Hogg, C. (2005). Cirque du Soleil and the future of entertainment. Digital Journal, 12(24).
Khutko, A. (2007). Cirque du Soleil’s Guy Laliberte named Ernst & young 2007 world entrepreneur of the year. www.ey.com, 6(5).
Screen Source. (2002). US movie theatre facts. Web.
Susan, J. (2012). Management lessons from Cirque du Soleil. Web.
Tischler, L. (2005). Join the circus. Retrieved from Fast Company.
Zook, C. (2004). Beyond the core: Expand your market without abandoning your roots. Boston: Harvard Business School Press.