Cirque du Soleil Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Cirque du Soleil Case Analysis

Legal

Cirque’s tour duration is about three years and it is not allowed to present other shows before the period of three years. One of the players – Cirque Oz in Australia did not allow Cirque to get permit to have its presence in Australian region. This was primarily due to the reason that after Cirque left the Australian market; Oz experienced significant economic growth. The company has been growing quite well after Crique’s exit, and in order to reduce the threat of competition it restricted Cirque to get permit to enter Australian market again. Therefore, such threat might be posed to Cirque by other players as well in regards to reduce the competitiveness in their respective market.

Alternatives:

Alternative 1 – Geographical Expansion

Finding regions where the inflow of tourist is higher as compared to other regions for the fixed locations’ shows.

Pros:

Free trade is expected to bring reduction in the barriers like competition threat from regional players, taxes and tariffs.
It significantly provides the organization with an access to enter the new markets,which might offer exponential growth opportunities.
International expansion is known to bring an improvement in the visibility of the non-specific regions in the world.
It would bring improvement in the audiences, providing the organization with opportunities to generate more profits.

Cons:

One of the disadvantages of internationalization is cultural and traditional barrier. However, cultural diversity is greatly encouraged at Cirque du Soleil.
It might result in the exploitation of the labor in order to bring reduction in production cost and increase the shows’ audience. (Collins, 2015)

Alternative 2 – Diversification of Activities

Pros:

It significantly provides assistance to the organization in leveling out of risk and volatility because the complete investment in one particular product would result in the all stock fall.
It provides growth opportunities,such as: operating both nationally and internationally, serving as a great way to generate more profits.

Cons:

Over product diversification tends to result in the average returns,influencing the growth potential of the organization.
There is an additional transaction cost found in association with the broad diversification of the products.
It makes an efficient management of product portfolio a difficult task to be managed; making the portfolio look not as great as expected.

Alternative 3 – Market Adjustment

Pros:

Offering low prices in comparison to other competitive players in the market would significantly result in an expansion of the company’s consumer base.
This provides the organization with cost-effectiveness in a manner that higher profit margins would allow the organization with anopportunity to bring an improvement in the capacity of audiences per show.
As consumer are likely to shift their focus towardscheap substitutes then offering low-price products would enforce the competitors to focus on other alternative strategic approaches.
Higher profit margins and an increased number of audiences per show might bring reduction in the number of shows,resulting in declined injury incidentsand improved safety of the performers.

Cons:

This would not allow the organization to achieve its production cost. Thus, despite improvement in the profit generation; the net income of the organization would be low.
The high-end audiences might be more as compared to low-end markets, which might affect the target audience of the organization.

Decision Matrix

Attributes	Alternative 1	Alternative 2	Alternative 3
Cost impact	4	4	8
Growth	8	8	6
Innovation opportunity	4	8	6
Ease of implementation	6	4	6
Total Score	22	24	26

Recommendation:

Based on the analysis and the evaluation of the alternative strategic approaches; themarket adjustment approach is recommended to the organization. This is primarily to develop the capability to survive the changes in the market’s dynamics. For this purpose, the organization is required to focus on the decentralization approach in terms of decision-making. Similarly, setting up the regional divisions followed by separate market research and marketing approaches through considering regional consultancy or management. Furthermore, the organization is recommended to focus on the market adjustment approaches, such as: change in the pricing policy in association with the production levelat the organization.

Conclusion:

Cirque has been performing well and has been growing rapidly in the circus industry across the world. But, there are a number of issues being faced the organization regarding the product pricing, competition, economic conditions and social factors. Due to such reasons; the organization is recommended to make adjustments with the current market environment, in order to build a capability to survive in tough economic situation, improving its survival rate...................................

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