STRATEGY

MANAGEMENT OF CIRQUE DU SOLEIL

A business model de-ines how an organisation interacts with its environment to de-ine a unique
strategy, attract the resources and build the capabilities required to execute the strategy, and
create value for all stakeholders.

Building a successful business is a journey – not a destination. As such, business models, like the
businesses they represent, don’t stay static. Instead, they evolve over time as executives exploit
opportunities, respond to threats, and build capabilities.

When strategy, capabilities and value are well aligned with each other and also with the external
environment, a business model creates a “virtuous circle” of innovation, productivity and
increasing returns. In contrast, a poorly aligned business model creates a “vicious circle” that can
quickly spin out of control, destroying value.

How has the business model of Cirque du Soleil shifted from a virtuous to a
vicious circle?

Your audit of its business model for resident shows (Mystère, O, La Nouba, Zumanity, Kà, The
Beatles’ Love, Criss Angel Believe, Zaia, Zed, Viva Elvis) and for world touring shows (Michael
Jackson The Immortal World Tour) may be conducted by following such steps:

• Analyse the strategy

o Business context, customers, competitors and substitutes, business
network
• Evaluate resource requirements and capabilities
o Processes and infrastructure, people and partners, organisation and
culture, leadership and governance
• Assess value created for all stakeholders
o Internal and external stakeholders, business model drivers, -inancial
model and -inancing needs

How would you have sustained a virtuous circle or even have brought an
evolution of the business model of Cirque du Soleil if you were the
entrepreneurial founder and chief executive ofLicer?

Your recommendations in terms of business model evolutions may take into account the
following keys:

• Enhance
o Incremental improvements to an existing strategy or capability
• Expand
o Launch new product categories, enter new markets, or expand capabilities
• Explore
o Launch new businesses and build new capabilities
• Exit
o Exit a product or market or outsource a capability

You are required to write a 5-page dissertation, including the introduction

and the conclusion.