BLUE OCEAN STRATEGY

Evolution of the Circus Industry

Even clown Can Do it

Presented by Goup No.Aditi Kapoor

Prashant Sharma
Seena Alex
Shifali Bhutani
Gaurav Dabas

RED OCEAN

Red oceansare all the industries in existence today the

known market space, where industry boundaries are
defined and companies try to outperform their rivals to
grab a greater share of the existing market. Cutthroat
competition turns the oceanbloodyred. Hence, the term
'red'oceans.

BLUE OCEAN

Blue ocean denote all the industries not in existence today- the unknown
market space, untainted by competition. In blue oceans, demand is
created rather than fought over. There is ample opportunity for growth
that is both profitable and rapid.

There are two ways to create blue oceans

Companies can give rise to completely new industries, as ebay did with the
online auction industry.

A blue ocean is created from within a red ocean when a company alters the
boundaries of an existing industry. As will become evident later, this is what
Cirque did.

Red Ocean v/s Blue Ocean Strategy

Red Ocean

Blue Ocean

Compete in existing market space

Create uncontested market space

Beat the competition

Make the competition irrelevant

Exploit existing demand

Create and capture new demand

Make the value/cost trade-off

Align the whole system of a companys activities with its strategic

choice of differentiation or low cost.

Break the value/cost trade-off

Align the whole system of a companys activities in pursuit of

differentiation and low cost.

PESTEL ANALYSIS

POLITICAL

Tax issues

Stability

ECONOMICAL

Energy efficiency

Global crisis reduced purchasing power

Limited number of touring cities

SOCIAL

Cultural entertainment preferences

Religios views

Demographic chart

PESTEL ANALYSIS

TECHNOLOGICAL

Influence of web based free contents

Automatization of production leading to lower costs

Higher CAPEX due to short lifecycles of new technologies

ENVIRONMENTAL

Strict local logistics regulation (eg CO2 emmision)

LEGISLATION

Working permits

Visa policy

SWOT
WEAKNESS

STRENGHTS
-innovative, unique show
-diversified product portfolio movies,
TV shows, merchandise
-flexible working force, devoted artists
-established brand name
-well organized logistic

OPPORTUNITIES

-expand to larger number of cities

-diversification of the product portfolio
which could fit to different audiences
-increase number of impermanent
location based shows

-high overheads and management costs

-sole owner and decision maker
-a business model that could be easily
copied
-a lot injuries that need to be prevented
-high staff turnover

SWOT

THREATS

-real competition that could enter the

market
-to become too commercial and loose its
spirit
-overdependence on the existing owner
-economic downturn will lead to customers
choosing lower cost substitutes

PORTERS FIVE ANALYSIS

Threat of substitute products-HIGH

Conventional circus-animals,clowns,etc

Low cost substitutes-movies,TV, internet

Other substitutes-theatres,concerts, cinema

In economic downturn customers-choose low cost entertainment

Barriers to Entry LOW

Low to moderate entry barriers

Low to moderate costs of equipment

Moderate initial employee costs

PORTERS FIVE ANALYSIS

Bargaining Power of Customers VERY HIGH

Product is highly differentiated/unique

The service of Cirque du Soleil is difficult to be directly replaced

Not a product satisfying basic needs;

luxury good

Bargaining Power of Suppliers LOW

High number of suppliers for technical equipment and logistics

Limited number of suppliers for tents and scenes

Relatively low supplier switching costs

PORTERS FIVE ANALYSIS

Competitive Rivalry MODERATE

Few competitors like Cirque Oz compete locally

Lots of circuses globally

Instead of five forces, Mr. Kim and Ms. Mauborgne talk about four
actions that can help you create a blue ocean strategy. The actions are
found by answering these questions:

Which of the factors that the industry takes for granted should be
eliminated?

Which factors should be reduced well below the industrys standard?

Cirque du Soleil reduced much of the thrill and danger associated with
conventional circuses.

Which factors should be raised well above the industrys standard?

In the case of Cirque du Soleil that included animals, star performers, and the
three separate rings.

Cirque du Soleil increased the uniqueness of the venue by developing its own
tents, rather than performing within the confines of existing venues.

Which factors should be created that the industry has never offered?

Cirque du Soleil introduced dramatic themes, artistic music and dance, and a
more upscale, refined environment.

ISSUE

They re-invented circus. Everybody has seen it. Now what?

ALTERNATIVES

Expand geographically

Find new audiences go to new places

Find places with high inflow of tourists for fixed location shows

Continue diversifying commercial activities

Movies, amusement parks, music, commercial goods

Regional approach market adjustment

To fit to diverse conditions in current markets

THANK YOU