...STRATEGY DISCUSSION Question 1: Red Ocean Analysis Explain why anyone applying Michael Porter’s “Five Forces” competitive analysis in 1984 would have told Guy Laliberté not to start another circus. Explain your reasoning. Applying Michael Porter’s Five Forces to Guy Laliberté’s decision to start ‘another’ circus would lead individuals to come to one of two conclusions, depending on how in-depth they understood Laliberté’s plan. On the surface level, his plan seems to be an inevitable failure - trying to become a new player in a market that is declining and facing new challenges in sustainability daily. Laliberté’s plan fits almost all of the criteria for struggle and potential failure according to Porter’s Five Forces. Breaking down each of Porter’s forces, it is clear that starting a new circus lends very little promise for Laliberté. First, Laliberté was facing supply issues to find talented circus acts that would draw in an audience. In order to acquire a high caliber of talented performers, a circus at the time was forced to put financial strain on their profits from ticket sales just to afford the acts themselves. Additionally, the power of buyers produced a real challenge at the time, as audiences were only interested in attending the circus if compelled by acts that were in turn too expensive for the circus to make a profit on. Laliberté was also facing tough competition in entering the circus industry. This space had been established by the century-old...
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...Since 1984 Guy Laliberté has been building Cirque du Soleil, an artistic circus that has amazed thousands of people in hundreds of towns. Cirque has worked hard on keeping their strengths unbeatable and weaknesses miniscule. In the process of making their weaknesses turn into strengths they have taken advantage of many opportunities available to them. Cirque has done so well at expanding their horizon is it difficult to find opportunities they have not taken advantage of; so, where will they go from here? They do have a few threats; yet even these do not seem to injury Cirque du Soleil. They may need to watch negative media attention and keep founder Laliberté under wraps. Although with Cirque’s popularity, little will affect this strong company that takes advantage of all opportunities and turns their weaknesses into strengths. Cirque du Soleil: The Circus of the Sun Shines 1. Mission Statement: Invoke, provoke and evoke the imagination, the senses and the emotions of people around the world. 2. Organizational strengths/weaknesses a) Strengths i. Unique: Cirque Du Soleil, French for Circus of the Sun, was founded in 1984 by Guy Laliberté in Baie-Saint-Paul, Canada for the 450th anniversary of Canada’s’ discovery celebration in Quebec City. (Roux, 2009) Cirque du Soleil now boasts 5 offices around the world: Amsterdam, Las Vegas, Singapore, and the headquarters in Montreal. The show that provides the audience with a mix of circus...
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...Blue Ocean Strategy MKT/421 Ken Metz May 5, 2015 Britney Jefferson The Blue Ocean Strategy were defined by professors W. Chan Kim and Renee Mauborgne. They wrote a book about The Blue Ocean Strategy back in 2005. The Blue Ocean Strategy involves the description of how the organization should try and proceed to find some way to work in the market place that is not bullied by the competition and also that is free of competitors. The blue ocean includes the potential industries that do not exist at present and all the untapped market spaces and demand demographics that will take shape as and when such potential industries take shape. Blue oceans can be brought into existence in two primary ways. One, as a completely new, unheard of industry can be created from within the red ocean by manipulating the functioning boundaries of an existing industry therein. (Chatterjee, 2014). Blue Ocean Strategy creates uncontested market space, make the competition irrelevant, create & capture new demand, break the value cost trade off, and simultaneous pursuit strategy of differentiation and low cost. The Blue Ocean strategy is quite important. This is because it allows some business to sell its products with no or little competition from other firms. It is also significant for some new business that does not have enough money for advertising and does not want to sell its products in some market where other industries have already established strong brands. According to Professor...
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...The most important task is to clearly define why the business is dying. In “Butch's Box Shop” case they already knew what was wrong. One of their biggest asset- wooden box factory was slowly but surely pushed out of business by cardboard and plastic. Simply, from their customers point of view those were better alternatives for them due to the price and usage. I believe they should not even spend resources on marketing for the wooden boxes, because no matter what marketing strategy they would use, cardboard and plastic boxes are just better for storing things like food and they cannot change that. What they can do is to come up with new product line. Their situation reminds me the book I just read. It is called Blue Ocean Strategy and it is all about how to turnaround your business. The main idea is that there are two oceans. There is a red ocean full of predators, and there is a blue, empty ocean. Blue Ocean Strategy is focused on blue undiscovered ocean. For example, everybody heard about Cirque Du Soleil, but who knows...
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...Porter’s Five Forces Model versus A Blue Ocean Strategy Porter’s Five Forces Model, provided by Michael Porter, is an external environmental analysis tool for a specific market. This model emphasizes that in any existing industry, there are five competition forces: threat of new entrants, power of suppliers, power of customers, threat of substitute products, and intensity of competitive rivalry. In addition, these five forces can influence and determine the profitability of the enterprise. Using the five forces model, one can analyze the industry attractiveness and the level of competition, which can then help the company to develop the business strategy. In the real world, strategic analysis and strategy formulations are important for company to gain the profitability. For example, IKEA focuses on operating efficiently and developing new product continuously for their business strategies. Also, the Five Forces Model has helped IKEA to maintain its low cost and obtain the huge profitability in the furniture industry over the years. The Blue Ocean Strategy takes the view that innovation, innovation that creates new market space, taps into unsatisfied consumer demand that finds uncontested market space in the hope of finding a blue ocean. A blue ocean exists where no firms currently operate, leaving the company to expand without competition. The core strategy is the value innovation, which means that the company should create new demand and make the competition irrelevant....
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...Blue Ocean Strategy: Article Summary Abstract The Blue Ocean Strategy (BOS) is a business strategy about capturing uncontested market space, thereby making competition irrelevant. The corner-stone of BOS is 'Value Innovation'. A blue ocean is created when a company achieves value innovation that creates value simultaneously for both the buyer and the company. The innovation (in product, service, or delivery) must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market. The "ocean" in the title refers to the market or industry: • Blue Oceans are untapped and uncontested market, which provides little or no competition for anyone who would dive in, since the market is not crowded. • Red Oceans, on the other hand, refers to a saturated market where there are fierce competitions, already crowded with companies providing the same type of services, producing the same kind of goods. The idea is to do something different from everyone else, produce something that no one has yet seen, thereby creating a blue ocean. Blue Ocean Strategy: Article Summary BOS explains that rather than competing within the confines of existing industry or trying to steal customers from rivals (Red Ocean Strategy), uncontested market space should be developed that makes competition irrelevant. Red oceans are all the industries in existence today—the known market space. In the red...
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...Cirque du Soleil Case Q1. Outline briefly the environmental factors contributing to the demise of the traditional circus, and compare the offering of the traditional circus with the offering of Cirque du Soleil. Q2. Analyse Cirque du Soleil’s Blue Ocean Strategy and assess the sustainability of the proposed diversification strategy. Environmental factors contributing to the demise of the traditional circus Legal & Political * Tough laws and taxation policies. * Lack of governmental assistance and financial support. Economic * The increasing cost of moving from place to place. * Cost of animal maintenance got larger. * Hiring star performers led to rise in expenses. * The US went into recession. Environmental * Growing concern relating to the mistreatment of animals. * Scarcity of large tracts of land to accommodate circus tents in the city. Technology * Introduction of new technologies such as the TV, game consoles, iPods and laptops. Sociocultural * Two working parent families with no time to bring their kids to the circus. * An increase in movie theatres, along with the TV becoming the new medium for family entertainment. Comparison between traditional circus and Cirque du Soleil’s offering | TRADITIONAL CIRCUS | CIRQUE DU SOLEIL | PERFORMANCE | Based on acrobats, ringmasters, jugglers, clowns and animals acts. Star performers. | Emphasis on artistry. Human performers, no animals, stagecraft &...
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...Abstract: This course work will concentrate on marketing analysis of the world’s leading circus company Cirque du Soleil. Based on the data given it will conduct a PEST, Porter’s 5-Forces, SWOT analysis and discuss the results, together with results paper will concentrate on marketing and positioning strategies and Ansoff’s Matrix, and also recommend strategy measures for achieving sustainable economic development outcomes. It was found that, first of all, Cirque du Soleil is making a profit while most of its competitors are fail to break even. Second, with its innovative and creative productions, the Cirque stays in a distinct position that none of its competitors can compete. Third, the Cirque’s shows ease to accept by the world and became more flexible due to the sufficient diversity in performers’ nationalities and with experience in multi-field. Table of Contents 1. Introduction………………………………………………………..5 2. PEST and Porter’s 5-forces analysis................................................5 3. SWOT Analysis................................................................................11 4. Marketing and positioning strategies...............................................14 5. Ansoff’s Matrix…………………………………………..………..16 6. Conclusion........................................................................................18 Bibliography.......................................................................
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...ANALYSIS The article in Harvard Business Review, Blue Ocean Strategy written by W. Chan Kim and Renee Mauborgne, gives an insight to how Cirque du Soleil has implemented a Blue Ocean Strategy when creating its business. This article provides examples for examining alternative purposes and approaches of Blue Ocean Strategies. It appraises the benefits that a Blue Ocean Strategy brings a company by expanding its growth and profit in a much faster speed. It achieves these benefits by creating new market space and making competition irrelevant. The analysis of Blue Ocean Strategy focuses on creating new markets and industries. Its methodology is to compare the Red Ocean Strategy with the Blue Ocean Strategy. The comparison gives detail to the most important difference between the two strategies, which is the market they target. While a Red Ocean Strategy is referring to an industry that is already well established in the market place and pretty much has attained its peak in popularity. In this Red Ocean Strategy if you were to come in as a new business it would be to compete at the same level and perhaps just trying to outperform your competitor in order to take a share of the demand already in existence for that industry. But, when talking about the Blue Ocean Strategy, the ideology gives a 360 degree shift. In a Blue Ocean Strategy the demand is created by introducing something completely new. You produce a new business which has not been introduced before and therefore,...
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...Blue Ocean Strategy Shovanda Davis MKT/421 July 13, 2015 Nnamdi Osakwe Blue Ocean Strategy Introduction This week we will discuss Blue Ocean Strategy in detail. We will provide a description of blue ocean strategy and its importance. We will also discuss a product or service that might be considered a blue ocean move and why. We will also talk about an alternative red ocean move for the same product or service along with the pros and cons of that strategy. Description of blue ocean strategy and its importance Blue Ocean Strategy is a term that describes how companies customarily work in "red ocean" conditions, where businesses viciously fight against each other for a share of the marketplace. Instead, according to the blue ocean strategy, organizations should find a way to work in a marketplace that is free of competitors (Arline 2015). Blue Ocean Strategy is where leading companies will prosper not by fighting competitors, but by creating "blue oceans" of recognized market space ready for growth (Arline 2015). Blue Ocean Strategy is important because it is easier for many companies to produce more of their product because of technology advances. It is also important to companies to enter the blue ocean to find new opportunities. Blue Ocean Strategy makes the competition irrelevant. Product or service that might be considered a blue ocean move and why There are several products and services that might be considered Blue Ocean. Cirque du Soleil is an example...
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...Blue Ocean Strategy Paper The blue ocean strategy in marketing is a business theory that helps search for ways to gain uncontested market space, this is seen as a unique approach to building a customer base. The following essay will analyze the blue ocean strategy and its importance, while providing a product or service that might be considered a blue ocean strategy. Lastly, an alternative red ocean move for the same product or service along with the pros and cons of that strategy will be discussed. Blue Ocean Strategy was developed by W. Chan Kim and Renee Mauborgne. “It describes how companies traditionally work in "red ocean" conditions, where businesses viciously fight against each other for a share of the marketplace. Instead, according to the blue ocean strategy, organizations should find a way to work in a marketplace that is free of competitors.” ("Blue Ocean Strategy", 2015). The purpose of the Blue Ocean strategy is to create an uncontested market place while making the competition irrelevant. By doing so this creates and captures new demands and breaks the value-cost trade off. In result, this aligns the whole system of a business’s activities in pursuit of differentiation and low cost. This strategy is important for businesses because in order to make your competition irrelevant, you must leave the red ocean and go to the blue ocean. Once in the blue ocean, you only need to create demand for your product or service. Examples of Blue Ocean Moves There are...
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...Visi Pramudia http://visipramudia.wordpress.com/ BLUE OCEAN STRATEGY Authors: W. Chan Kim – Renee Mauborgne How to Create Uncontested Market Space and Make the Competition Irrelevant Visi Pramudia http://visipramudia.wordpress.com/ I. THE STRATEGY Visi Pramudia http://visipramudia.wordpress.com/ New Market Space known market space RED OCEAN Represent all the industries in existence today BLUE OCEAN Denote all the industries not in existence today space Circus Industry Traditional Circus: • Target Market : Children • Dependent to : Star performance, animal shows • High fun & humor • High Thrills & dangers unknown market Cirque du Soleil: • Target Market : Adults • Not Dependent to Star performance & animal shows • Reduce fun & humor • Reduce Thrills & dangers • Unique Venue • Theme & Theater Low Cost, High Price High Cost, Low Price Visi Pramudia http://visipramudia.wordpress.com/ The Cornerstone of Blue Ocean Strategy • Value innovation is created in the region where a company’s actions favorably affect both its cost structure and its value proportion to buyers • Cost savings are made by eliminating and reducing the factors an industry competes on • Buyer values is lifted by raising & creating elements the industry has never offered • Over time, costs are reduced further as scale economies kick in due to the high sales volumes that superior value generates The Simultaneous Pursuit of Differentiation and Low Cost Visi...
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...IMPERIAL, Kirsten Mireille P. Blue Ocean Strategy STRATMA K37 a) Blue ocean strategy differs from traditional, conventional strategies that embody the value-cost trade-off and aim to compete with rivals. For me, a difference between blue ocean and red ocean strategies is the way they perceive strengths. It could be said that red ocean strategies tend to view strengths as those which the company does better compared to its competitors. In contrast, blue ocean strategies view strengths as those which the company is best at doing, regardless of its competitors. Rather than competing with rivals, blue ocean strategies create a new market space and see competition as irrelevant. They embody value innovation instead of the value-cost trade-off, aligning innovation with utility, price, and cost positions. Instead of comparing themselves with their competitors, blue ocean companies focus on integrating its own functional and operational activities. Also, compared to red ocean strategies that choose between differentiation and low cost, blue ocean strategies pursue both. All in all, red ocean strategies stay in the comfort zone, while blue ocean strategies get out of it – that’s why it’s more risky. They are all about being unique and creating and capturing new demand. Thus, creativity also contributes to the success of blue ocean strategies. b) Cirque du Soleil achieved Blue Ocean by reinventing the circus. Their business model involved making a whole new circus concept and appealing...
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...instead of higher salaries) Cirque du Soleil is providing the alternate to shrinking circus industry and called circus of the future. It was based on the blue ocean strategy and still after 25 years it is considered as blue ocean industry. It is based on the unique concept and creativity and maintains the quality and consistency over more than 2 decade. It performs five continent and more than 90 cities. Cirque du Soleil was founded in 1984 and grown from 73 employees in 1984 to now they have around 5000 employee. The biggest challenge for them is to maintain and attract these special tenanted employees or I should call them performer with competitively low wages. Cirque believes its unique approach to managing a worldwide workforce that runs the gamut from acrobats to administrative staff suits its business approach. Cirque adopted the unique approach to manage their workforce which is not totally based on higher salary. There compensation system is based on low salary but better benefits. They valued the noneconomic benefits like training in different places and different technique, good food which feels like home, shuttle services to work from home. Cirque motivates their employee towards their work where employees work with passion. Every employee feels like working in very specialized and unique place like Red Sox and Disney world and feels proud performing every night. Cirque tries to recruit artist as couple to give them family environment. Cirque created unique program called...
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... The blue ocean strategy in the environment of marketing is an extraordinary way to embark on creating a monopolistic customer base. It describes how the blue ocean strategy looks to find ways to build a new market segment that has no current existing businesses and without competing in a crowded marketplace with existing companies. As new technological innovations emerge daily, blue ocean strategy is rapidly growing. The paper will intel the characteristics of the blue ocean strategy while providing ideas of how to employ them into the business environment. Description and Importance of Blue Ocean Strategy Blue Ocean Strategy is a non-fiction business book written in 2005 by W. Chan Kim and Renee Mauborgne. Kim and Mauborgne sought to find a more vigorous strategy approach than Harvard Professor Michael Porter’s “five forces”. They argued that Professor Porter’s strategy would have businesses remaining in the “red ocean” where there’s heavy competition and a very crowded marketplace. The importance of the Blue Ocean Strategy is to encourage existing business customers to move from the red ocean which is characterized as a bloody, shark infested waters competition marketing environment to the blue ocean waters than has no competitors and ample amount of space to evolve new beginnings. Kim and Mauborgne used the Cirque du Soleil as an example of how the Blue Ocean Strategy can be successful. “Despite a long-term decline in the circus industry, Cirque du Soleil profitably...
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