Cirque du Soleil

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Cirque du Soleil ULB - Gest D201 Intro to
Management Organisation Prof Ludo Van der
Heyden INSEAD Brussels, May 5th 2006
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The Circus Industry
RBBB dominates the industry for over 70 years
    The Greatest Show on Earth  Over 90
other circuses grossing between USD 50,000 1
million Demand stagnant near to zero
growth Strong and new substitutes cable,
movies, home video games like Play Station and
Nintendo Increasing sentiment against use of
animals some cities outlaw for health, safety,
and animal rights issues A Huckster Reputation

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CdS Challenges the Assumptions of the Industry
3 Ring One Ring Star Performers Non-Star
Performers Seasonal Yearly One
Show Multiple Productions Child
Audience Adult Audience Animals No
Animals Unrelated Acts Story/Theme No
Music Original Score Low Price High
Price High Push for Concession Sales Profits
from Tickets Emphasis on Fun/Thrills Emphasis
on Artistery/IR
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Le Cirque du Soleils Value Curve
CIRCUS
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Le Cirque du Soleils Value Curve
CIRQUE DU SOLEIL
CIRCUS
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Le Cirque du Soleils New Value Curve
THEATRE
CIRQUE DU SOLEIL
CIRCUS
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How the Company Wins

• Revenue Generation
• Accessing New More Profitable Pool of Customers
  Higher Price
• Multiple Productions more visits per customer
  Higher Volumes
• Leap in Value Pulls New Customers into the
  Industry

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Chief Competitor Field Entertainment, (Parent
company of Ringling Bros. BB Circus Ice Capades)
Annual Revenue (US Millions)
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Cirque du Soleil
Annual Revenue (US Millions)
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Cirque du Soleil AttendanceEstimates based on
available company information
AUDIENCE (millions)
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How the Company Wins

• Cost Reduction
• Eliminating High Cost, Low Value elements Stars,
  animals, trainers, insurance, transport costs
• Yearly productions faster recuperation of fixed
  costs of creating a production
• Leveraging untapped, high value, lower cost
  talent pool of Russia, China, Brazil

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How Customers Win CdS looks across the Circus
and Theater Industries
But is it a circus? Thats irrelevant. It is
what the audience thinks it is. It is Soleil.