Introduction
One of the most noted entertainers originating from Canada, Cirque du Soleil often does not need an introduction after it completely captured the minds of many people from different continents and managed to create a new space in the entertainment market. Cirque’s Blue Ocean strategy was directed at challenging the oldest conventions of the circus industry, offering the public a “new look” at a traditional entertainment form. The success of Cirque du Soleil can be attributed to two main components: innovation or entrepreneurship, and its Blue Ocean strategy. This paper will evaluate the drivers of innovation and entrepreneurial opportunities that have contributed to Cirque du Soleil’s success as well as analyse the view that the entertainer’s success can be attributed to the application of its Blue Ocean strategy.
Innovation and Entrepreneurial Drivers of Cirque’s Success
Cirque du Soleil is one of the largest world’s producers of circus entertainment. It was founded in Canada by Guy Laliberté and Gilles Ste-Croix, former street performers, in 1984. With the support of the Canadian government, the founders began their first tour of Quebec and soon managed to capture the attention of a wider audience (Heward & Bacon 2006). From the very beginning, the circus performances differed from those established by the conventional traditions: the shows of Cirque du Soleil included artists from different countries, were full of light effects and specially composed music and utilised unique costumes.
What was distinctive for Cirque is that it did not use famous artists in the performances despite this practice being popular among other circuses. Furthermore, Laliberté and Ste-Croix chose not to use circus animals, which could have drawn the attention of animal rights activists and resulted in public criticism (The Cirque du Soleil approach 2015). On the contrary, Cirque du Soleil focused on creating spectacular shows in which only human performers participated. The aim of the programs was to demonstrate the beauty and harmony of the human body; the shows featured hand-made costumes, the music that was specifically composed for the purposes of the circus, and unusual light effects which were capable of amazing even the pickiest customer (Heward & Bacon 2006).
Thus, it is possible to summarise that Cirque du Soleil utilised the Blue Ocean strategy from the very beginning. Other circuses tended to focus on providing their customers with shows which, to a considerable degree, were comprised of tricks made with animals, as well as of the performance of the key figures in the circus–the clowns. On the contrary, Cirque du Soleil, the inception of which was initiated by a number of street performers, managed to blend two approaches to live entertainment–circus and street performance–into one innovative mix, therefore giving a new meaning to the term “street performance” while at the same time transferring this show from the street into the indoor space of the circus and expanding it with new opportunities that were provided by this new environment, as well as by the status of an organisation that could employ many people. It might be possible to assume that the entrepreneurial drivers of this innovation included the new vision of the indoor circus originating from the previous experience of its founders, which was tightly related to the street performance (Mauborgne & Kim 2015; Reuters 2003). It appears clear that the establishers of this circus were driven by the passion for creating marvellous circus performance, and for contributing to the innovation of the sphere of live entertainment by making a new product which would inspire even the pickiest viewer.
Evaluating Cirque’s Strategy and Innovation Frameworks
Porter’s Generic Strategies Framework
The Cirque du Soleil enterprise can be analysed using Porter’s Generic Strategies framework that combines two key principles of competitive scope and competitive advantage. The correlation between the competencies exhibited by Cirque du Soleil is what defines the organisation’s competitive scope and advantage. To understand whether the position of Cirque in the industry can determine its profitability, it is crucial to examine four dimensions: cost leadership, differentiation, cost focus, and differentiation focus (Porter 1985). With regards to cost leadership, Cirque du Soleil sets high prices compared with competitors to create innovative, high-end entertainment experience (Blue Ocean Strategy 2016). This attracts the attention of all audiences: those that can afford the prices easily and those who are interested in performances but have to save up. The company differentiated itself from competitors through innovation and entrepreneurship, so its position against other entertainers such as the Ringling Brothers is much higher (Maugborgne & Kim 2015). While Cirque du Soleil does not seek a cost advantage in its target segment (University of Cambridge n.d.), it concentrates on the differentiation it its target audience. Such an audience does not have unusual needs; instead, Cirque du Soleil offers entertainment that is different from any other services in the industry.
Universal Competency Framework
A Universal Competency Framework is a unified framework that offers a rational and practical basis for understanding behaviours at work, as well as the likelihood of success in specific roles and environments (CEB, 2016). It will be applied within the context of innovation and entrepreneurship at Cirque du Soleil, form the basis of the company’s operations is the combination of key competencies described below.
- Talented workforce: Cirque’s process of research and development emphasises the training of artists for delivering peak performances (Merrithew 2013). All artists undergo extensive training at the Creation Studio (Smith 2009). This is also crucial because only humans participate in Cirque’s shows.
- Storytelling: the shows are supported by numerous narrative techniques; digital storytelling is one of the companies’ strongest points.
- Theme: Cirque defines themes for new shows (Avi 2012). Initially, the theme for a show is often vague and maybe only one word; however, as others begin contributing by bringing in new ideas, the creative process turns into a well-defined theme. The entrepreneurial approach to the creation of a new show is noteworthy, for the Cirque’s CEO dismisses the traditional approaches, and invites all ideas to the discussion instead, putting an emphasis on openness and constructive debates (Avi 2012).
- Technology. The company developed a cohesive IT infrastructure that supports every step of the value chain, ranging from the creation of shows to logistics (Rivard, Pinsonneault & Croteau 2011). Also, innovative ideas used by the research and development department include physical equipment for special effects (Kumparak 2016).
- The process of innovation: The company prefers to use the notion that ‘no idea is a bad idea’ method (Avi 2012, para. 2) to encourage a non-judgemental environment. This, in turn, promotes the culture of innovation and creativity, where disagreements and debates are used to the advantage of the business to spur new ideas and eliminate those that do not fit. The approach of seeking a consensus can lead to innovations to be used in future shows (Heward & Bacon 2006); it is the tension during the creative process that can truly lead to an innovative breakthrough.
Entrepreneurship and Innovation Model
The process of performance creation in Cirque du Soleil is specific in that research and development is viewed as a crucial element of creativity. When the importance of inspiration is recognised, the focus is made on investigative activities in order to improve already existing products or services or develop new ones (Research and development n.d.). The Centre for Research and Innovation of Performance (CRIP) at Cirque du Soleil is a separate office, which advances the available equipment, creates innovative acrobatic performances, and extensively studies the environment necessary for designing and planning new performances (Cirque du Soleil n.d.). CRIP plays the role of an “incubator” for entrepreneurship and fresh ideas developed to support the creative objectives of Cirques as well the company’s acrobatic performances and entertainment role in the long term. Specifically, CRIP develops projects that vary from automation to extreme sports, meaning that the research and development process is taken seriously inside Cirque du Soleil when it comes to entrepreneurship.
4Ps of Innovation Paradigm
The framework of 4Ps of innovation–Product, Process, Position, and Paradigm (Bessant & Tidd 2011)–can also be employed for analysing Cirque’s innovations. A firm can take various positions on each of these four dimensions, ranging from “incremental” to “radical” (Innovation strategy n.d.). For Cirque, these are as follows:
Product. The product of Cirque differs considerably from that proposed by other similar entertainment organisations. While other circuses often focus on providing their customers with shows which include a large number of tricks with animals, as well as rely on key performers such as clowns, Cirque du Soleil introduced numerous elements of street performance into its programme and made an entirely new product, which considerably contributed to its long-term success (The Cirque du Soleil approach 2015). Thus, Cirque is at the “radical” point on the Product scale.
Process. Cirque du Soleil emphasises the process of research and development; CRIP is a separate office which advances the available equipment, creates innovative acrobatic tricks, as well as extensive studies the environment (Cirque du Soleil n.d.). Therefore, it is possible to evaluate the Cirque’s position as that which is closer to the “radical” point of the Process scale.
Position. While other circuses focus on “coming to” clients, Cirque du Soleil has the position in which customers come to Cirque. In particular, the enterprise sells a large percentage of its tickets to the members of Cirque’s club (Moran 2016). The organisation also works as a content provider, participating in the production of television series and thus differentiating the position of the enterprise from the traditional position of circuses entirely. Consequently, the score of Cirque on the Position is also “radical”.
Paradigm. The paradigm of Cirque also differs from that of traditional circuses. As was noted above, it might be possible to state that Cirque transferred the street performance into the circus environment, thus considerably changing the meaning of the word “circus”. The Paradigm of Cirque is also “radical”.
Cirque’s Blue Ocean Strategy
Even though Cirque du Soleil recently experienced a decline in revenue and admitted that there was a need to “rebalance the business” (Berzon 2014), the company is still a premium one for managing a recognizable brand identity characterized by the great amount of attention paid to the innovation and entrepreneurship process. The Blue Ocean strategy assisted the company in creating a new slot in the market where the competition would be irrelevant (Hye-Jin 2015). Nowadays, Cirque du Soleil continues to redefine the traditional experience of going to the circus (Bessant & Tidd 2011, p. 202). While summarising the Blue Ocean strategy in the context of Cirque du Soleil, it is paramount to mention these aspects:
- The abandonment of the traditional circus look. No animals, rural venues, or conventional performances (The Cirque du Soleil approach, 2015).
- Streamlining and eliminating possible costs. The reduction of costs for Cirque du Soleil is associated with the absence of the need to feed animals and spend a considerable amount of finance on their transportation; in addition, this also allowed the circus to give performances in more places in the same period of time. Also, what is unique to Cirque is that people come to see it rather than the circus coming to them (Moran 2016).
- The identification of new customer segments not addressed by circuses previously. For example, Cirque du Soleil managed to capture the attention of an upscale urban audience that was looking for new experiences and innovative types of entertainment (The Cirque du Soleil approach 2015).
Eliminate, Reduce, Raise, and Create: the Approach for Successful Blue Ocean Strategy Implementation
In order to utilise the Blue Ocean Strategy, an entrepreneur needs to take the following four steps: eliminate, reduce, raise, and create (ERRE) (Layton 2009). The advent of television cinema meant that circus companies experienced increased competition during the 1980s. At that time, the circus industry was a “red ocean”, where the competition between performers and entertainers was harming the success of all the players in the industry. However, Guy Laliberté and Gilles Ste-Croix developed the idea that revolutionised conventional circuses and successfully attracted an additional audience. The Blue Ocean Strategy was characterised by two key components: differentiation and value innovation. The value curve of traditional circus entertainers highlights the importance of a star performer (usually a clown), as well as the participation of animals (Herald 2015). This meant that in the “red ocean” environment, entertainers competed for the most exotic animals and the most famous clowns to attract new clients to their shows (Herald 2015). Cirque did the opposite: it eliminated star clowns and animal performances in order to devote more attention to the key elements of circuses: humour, thrills, and fun (Herald 2015). The characteristics of the Blue Ocean strategy as utilised by Cirque du Soleil can be seen in the graph below, which shows the position of Cirque du Soleil against another popular entertainer, Ringling Brothers, as well as against smaller regional circuses that follow the traditions of established entertainment styles.
Figure 1 shows that Cirque du Soleil charges its clients a high price for its shows. The graph also provides information about the elements of the ERRE approach as employed by Cirque du Soleil:
- Eliminate: Cirque du Soleil does not rely on star performers, animal shows, aisle concessions or multiple show arenas, which is something that many other conventional circuses prefer to do; this part of the traditional circus programme was eliminated.
- Reduce: the enterprise reduced the amount of fun and humour in its shows in comparison to those of Ringling Brothers or other regional circuses.
- Raise: Cirque considerably raised the standards related to the unique venue, which considerably increases the capabilities of the performance.
- Create: the circus introduced themes, as well as art music and dance, into its performances, thus drawing much attention from the public.
The utilisation of the Blue Ocean strategy and the innovative approach to the upending the traditional principles of circus entertainment is what gave Cirque du Soleil worldwide recognition by audiences; it also continues inspiring its performers to create something new and unique.
Problems in the Strategy, and Marketing as Used by Cirque du Soleil
Over the decades of Cirque’s existence, the enterprise very rarely had to focus on the issues of marketing and promotion (Moran 2016). Because Cirque created and firmly secured its own market segment, it was faced with virtually no competition, whereas the unique attractiveness and the ability to enthral its audiences had been granting Cirque stable audience over decades; it is stressed that the tickets for its shows would be sold out long before the day of the performance (Moran 2016). This was also done using the company’s website, which allows its club members to order tickets online and enjoy certain other special features (Moran 2016). On the whole, the circus was represented in the market as completely unique, and very little promotion was required.
However, in the recent times, the circus has suffered a decline in its sales of tickets; this might be due to a number of reasons, for instance, because Cirque offers several different performances, and consumers might not be able to see the difference in details, thus thinking that the shows are similar (Berzon 2014). This is, perhaps, one of the very few problems that occurred while Cirque implemented its Blue Ocean strategy: consumers failed to differentiate between various products, not being able to tell the difference in details. Furthermore, the considerable expansion of Cirque led to the situation when their rarity stopped being such (Berzon 2014); it might be possible to state that this market niche became saturated to a certain extent.
Because of this, Cirque decided to employ marketing methods to re-capture its audiences. In doing so, Cirque lets its fans peek behind the scene; in addition, certain elements of the circus shows are also demonstrated on the Internet (Moran 2016). It is stated that a circus can afford to do so because the experience of watching the live performance is considerably different from that of watching it online; consequently, demonstrating certain elements of the show on the Web might only attract additional clients (Moran 2016).
Conclusion
The analysis of Cirque du Soleil, one of the most popular live entertainers in Canada, the U.S., and several other countries across the globe, has revealed that the organisation has exceeded its competitors in the field to the extent that facilitated the implementation of a Blue Ocean strategy through the use of innovation and entrepreneurship. In particular, it should be pointed out that Cirque du Soleil, in fact, employed the Eliminate, Reduce, Raise and Create (ERRE) approach for establishing a completely new slot in the market–one in which there was no competition with similar organisations that also provide live entertainment. Cirque du Soleil eliminated several aspects of the traditional circus (such as animal shows) entirely and lowered the role of some others (fun and humour) considerably while making stress on the unique venue and introducing themes, artistic music and dance.
It should also be emphasised it is ineffective to compare Cirque with any other circus entertainers, for Cirque’s methods considerably differ from those of other circuses: it does not utilise animals in its performances, instead of focusing on storytelling and the use of the latest technologies for creating an unforgettable and enthralling experience for the viewers of its shows. The target segment of the organisation is rather vast and includes both the high-end audience that can easily afford to spend money on pricey tickets and people of moderate income that treat Cirque’s shows as a luxurious experience for which it is worth saving money in advance.
The entrepreneurship and innovation model was implemented by Cirque du Soleil in numerous ways; for instance, the organisation created its own research centre, the Centre for Research and Innovation of Performance, in order to enhance the existing products and develop new shows and performances which would satisfy the client. Such aspects as innovation and entrepreneurship are also reflected in the core competencies of the business; these competencies ranged from using the well-trained workforce to increased awareness of the latest trends in technologies, which was crucial for keeping the product offered by the business innovative. It is noteworthy that the position of the business on the 4Ps scale has been identified as radical on each of the four aspects, which also implies that the degree of innovativeness of the enterprise in question was exceptionally high. Also, Porter’s Generic Strategies framework has shown that the high prices set by the business permitted for creation of a unique experience for its clients, which set Cirque apart from its numerous competitors by allowing for differentiation in its audience, thus providing the basis for Cirque’s decades-long success by attracting numerous customers–not only those who favour circus shows, but also those who would not be interested in the traditional forms of live entertainment.
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