Cirque Case Study
MBC 635
Instructor’s Solution for Cirque du Soleil Tour Planning
Fall 2012
Discussion Questions: Tour Planning at Cirque du Soleil: HEC Montreal Centre for Case Studies, HEC025‐ PDF‐ENG, March 1, 2011. 1) The main decisions facing Cirque is whether Istanbul is an attractive destination and if so, whether it partners with Turkish Television and Entertainment Society (TTE) and/or with the City of Istanbul/Ministry of Culture and Tourism (MCT). To begin your analysis, please enumerate the advantages and disadvantages for each of the two proposals. (2 pts) In general, Turkey appears to have good market potential. Istanbul performances are expected to exceed 100,000 tickets if they are released for sale 8 months before the event. However, Cirque du Soleil has no experience in Turkey, knows little of its cultural interests, administrative procedures, taxes and immigration policies, or even whether there is a box office network. Reportedly, red tape and poor communications between ministries and departments can complicate operations. Most teams will be able to identify at least two key advantages and two disadvantages for each partner. Partner MCT + City of Istanbul Advantages Leaves full autonomy and “control of chain of value creation” with Cirque. No profit sharing “Choice” venue assured Free rent & municipal services could reduce fixed costs – which I assumed were major components of the 1.5M costs incurred with each setup‐teardown ‐‐ by 20%. Disadvantages Cirque bears full financial risk. Limited sponsorship income No intention to pursue other project opportunities in the region – this is a one and done. Requested show (Kooza) is booked in Orange County until 2.22.2010; int’l transfer needed. MCT lacks experience in event logistics; ability to coordinate with other gov’t entities is doubtful. Advertising/promotion Potential sponsorship revenue expenses, and costs of securing 50%
Instructor’s Solution for Cirque du Soleil Tour Planning
Fall 2012
Discussion Questions: Tour Planning at Cirque du Soleil: HEC Montreal Centre for Case Studies, HEC025‐ PDF‐ENG, March 1, 2011. 1) The main decisions facing Cirque is whether Istanbul is an attractive destination and if so, whether it partners with Turkish Television and Entertainment Society (TTE) and/or with the City of Istanbul/Ministry of Culture and Tourism (MCT). To begin your analysis, please enumerate the advantages and disadvantages for each of the two proposals. (2 pts) In general, Turkey appears to have good market potential. Istanbul performances are expected to exceed 100,000 tickets if they are released for sale 8 months before the event. However, Cirque du Soleil has no experience in Turkey, knows little of its cultural interests, administrative procedures, taxes and immigration policies, or even whether there is a box office network. Reportedly, red tape and poor communications between ministries and departments can complicate operations. Most teams will be able to identify at least two key advantages and two disadvantages for each partner. Partner MCT + City of Istanbul Advantages Leaves full autonomy and “control of chain of value creation” with Cirque. No profit sharing “Choice” venue assured Free rent & municipal services could reduce fixed costs – which I assumed were major components of the 1.5M costs incurred with each setup‐teardown ‐‐ by 20%. Disadvantages Cirque bears full financial risk. Limited sponsorship income No intention to pursue other project opportunities in the region – this is a one and done. Requested show (Kooza) is booked in Orange County until 2.22.2010; int’l transfer needed. MCT lacks experience in event logistics; ability to coordinate with other gov’t entities is doubtful. Advertising/promotion Potential sponsorship revenue expenses, and costs of securing 50%