Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships
The case describes the history and business model of Cirque du Soleil (CdS). The case allows for a rich discussion and analysis of Cirque du Soleil's business model with an emphasis on how it interacts with that of MGM Mirage. Le Cirque and MGM's business models complement one another: MGM makes important capital investments in theaters tailored to CdS's shows that are located in the middle of MGM casinos, CdS acts as a magnet for traffic for an exclusive clientele that spends large amounts of money at the casino. CdS's partnership with MGM has been tremendously profitable. This raises the question of why hold up and opportunism have not destroyed competitive advantage for both entities: What features in CdS and MGM Mirage's business models have resulted in such a successful partnership? The case is set at a juncture where Daniel Lamarre (CdS's CEO) is looking for new opportunities for growth. Lamarre is pondering the likelihood of success of Cirque's first resident show in Asia at Tokyo Disney Resort, its entry in the Macao market, and a new partnership with two subsidiaries of Dubai World, the sovereign wealth fund of the Emirate. The question is: Can Le Cirque find a new model of complementary relationships that will be as profitable as its relationship with MGM Mirage?
Authors :: Ramon Casadesus-Masanell, Maxime Aucoin
Swot Analysis of "Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships" written by Ramon Casadesus-Masanell, Maxime Aucoin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mgm Cirque facing as an external strategic factors. Some of the topics covered in Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships case study are - Strategic Management Strategies, Financial management, Growth strategy, International business, Joint ventures, Leadership, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships casestudy better are - – increasing energy prices, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, etc
Introduction to SWOT Analysis of Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mgm Cirque, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mgm Cirque operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships can be done for the following purposes –
1. Strategic planning using facts provided in Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships case study
2. Improving business portfolio management of Mgm Cirque
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mgm Cirque
Strengths Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mgm Cirque in Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships Harvard Business Review case study are -
Effective Research and Development (R&D)
– Mgm Cirque has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Mgm Cirque digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mgm Cirque has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Mgm Cirque is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Mgm Cirque has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Mgm Cirque is one of the most innovative firm in sector. Manager in Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Strategy & Execution field
– Mgm Cirque is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Mgm Cirque in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Mgm Cirque is one of the leading recruiters in the industry. Managers in the Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships firm has clearly differentiated products in the market place. This has enabled Mgm Cirque to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Mgm Cirque to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Mgm Cirque is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ramon Casadesus-Masanell, Maxime Aucoin can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Mgm Cirque has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Mgm Cirque has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mgm Cirque has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships are -
Workers concerns about automation
– As automation is fast increasing in the segment, Mgm Cirque needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships, is just above the industry average. Mgm Cirque needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Mgm Cirque 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mgm Cirque is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships, it seems that the employees of Mgm Cirque don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Mgm Cirque has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Mgm Cirque has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Mgm Cirque even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships, in the dynamic environment Mgm Cirque has struggled to respond to the nimble upstart competition. Mgm Cirque has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Mgm Cirque has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships can leverage the sales team experience to cultivate customer relationships as Mgm Cirque is planning to shift buying processes online.
Opportunities Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Mgm Cirque can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Mgm Cirque can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mgm Cirque in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Mgm Cirque can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mgm Cirque in the consumer business. Now Mgm Cirque can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mgm Cirque can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mgm Cirque can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Mgm Cirque can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mgm Cirque to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Mgm Cirque to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Mgm Cirque has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mgm Cirque can use these opportunities to build new business models that can help the communities that Mgm Cirque operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Learning at scale
– Online learning technologies has now opened space for Mgm Cirque to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Mgm Cirque can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Mgm Cirque to increase its market reach. Mgm Cirque will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships are -
Environmental challenges
– Mgm Cirque needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Mgm Cirque can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mgm Cirque in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Stagnating economy with rate increase
– Mgm Cirque can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Mgm Cirque in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Mgm Cirque needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mgm Cirque can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mgm Cirque with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mgm Cirque can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships, Mgm Cirque may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Mgm Cirque.
Technology acceleration in Forth Industrial Revolution
– Mgm Cirque has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Mgm Cirque needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Mgm Cirque will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Cirque du Soleil--The High-Wire Act of Building Sustainable Partnerships is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Mgm Cirque needs to make to build a sustainable competitive advantage.