This week I move from the controversial to the creative. It’s the week of ghouls and goblins after all, so I decided to profile a company I’m particularly fond of–and who just happens to wear costumes 24-7-365….
Folks, when building a strategy I don’t just point clients to leaders in their own industries but ones far afield–and do so intentionally. We don’t learn by staying in our own bubble and we don’t innovate only through introducing new products and services.
In fact, amazing things happen when you re-engineer the old into the all-new (and the costumes don’t hurt either).
Take the tired Big Top and enter Cirque Du Soleil, a company with innovation in its blood. French for “circus of the sun,” this $600 million entertainment empire wields so much brand power that 5% of all Las Vegas tourists cite Cirque as their main reason for visiting. That’s 1.8 million event-goers annually, not counting all the tourists who tack on a show while there. Volumes like these are proving Vegas is the city of Sin…and Cirque.
Cirque Du Soleil has never had a flop and never busted budget. That’s saying a LOT for a company founded by two high-school dropouts (one of whom fittingly breathes fire). What’s more, tourists drop an extra $30 at each of the many resorts the shows are held at in addition to ticket prices ranging $50-$150. Mind you, it’s taken fair Broadway until 2005 to start charging an average ticket price of $100, while Cirque’s only been around for two decades.
Why does Cirque embody my favorite kind of innovation? What formula did Cirque devise to be so spectacular, so spellbinding? A set of strategic decisions catapulted them to fame, namely:
By not following the leader and paving their own positioning road to riches Cirque is trendsetter, too. Just look at all the zero-dialogue performance-art shows in the last decade (e.g. Blue Man Group, Stomp, Slava’s Snow Show). The company’s reputation is so strong that, in exchange for half the profits, the Las Vegas resorts–uh, and Disney World, too–agree to spend tens of millions on building custom theatres for the elaborate, expensive productions. So Cirque uses OPM (Other People’s Money) to innovate. That’s just clever.
But the Big Top isn’t the only game in town.Have any examples to share of companies that re-engineered an industry into a remarkable new sector? The more industries the better since it’s innovative practices from all over the business landscape that we can use to improve our businesses.
P.S.: Cirque’s latest buzz is its $140 million, Beatles-inspired production, aptly named “Love”, playing at the Mirage in Las Vegas–with the blessings of McCartney, Ringo and even Yoko.
uh… yes, there are several more examples. all of them, including the one you so originally analyzed above, are included in the excellent book
“Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant” by W. Chan Kim and Renee Mauborgne
David: I bought the book on Amazon 2 days ago–maybe we can all chat it here when I get through it. Perhaps I’ll showcase some of its gems in a post.
Thanks for the great book tip…and Boo! for Halloween.
CK,
Although an old example, it remains relevent. When Howard Schultz purchased Starbucks in the ’80s, it did not sell coffee drinks or the Third Place Experience.
In fact, if you wanted an espresso back then, you had to be in a city that had espresso bars or make it yourself. Coffee companies sold bulk only. (Duncan Donuts sold coffee in styrofoam and diners did, as well. But specialty coffees existed only in cities such as Boston, NYC and San Francisco.)
Howard’s vision was to bring a taste of Italy to America, so he reinvented Starbucks. We can argue it needs another revinvention but to us coffee/espresso lovers, Starbucks saved the day.
Lewis: Starbucks, and blazing the coffee-as-experience trail, is a great example of re-engineering a tired category.
There’s a movie coming out with Tom Hanks as a coffee barista and shows how starbucks changed the character’s life. At least that’s what I understand. Maybe that will give the brand a boost.
The Big Apple circus has also done a good job of approaching its category in a new light….similar to Cirque, but more accessible to kids, in my mind.
Good observation, Lewis. Another tired category & experience ripe for wholesale reengineering: movie theaters.
the movie market, even if it is still making a lot of money, is in someway agonising. if i give a look at how they promote their movies: it’s a flat strategy. commercials have the same structure, the fear of having a weak opening is clashing against the chance to have higher ticket sales in the forthcoming weeks, etc.
the do defend moby dick but we are in star wars era. big money won’t come any longer from the movie theatre but from other source: the majors which understand this earlier will survive.
cirque du soleil is a cirque making money out of many traditional cirques around the world that suffer or close.
Movie theaters are an interesting area … really mainstream releases are just largescale advertising campaigns for DVD releases (where they really make the money).
Of course, as the business models change and become (ever more) digital, the opportunity will come to reinvent theaters as experiential palaces. Weird — I am thinking Xanadu.
Of course there could well be a whole new alternative about to unleash itself.
I just had my first Cirque experience a couple months ago. They really are just brilliant. You can tell that they’re not just in it for the money. It’s in those little things that you know they could have cut and gotten away with. Those guys are dedicated artists, who just happen to be making a ton of money because of it.
Great post.
P
Gavin & Ann: Good example on theaters–many theaters that have been doing well promote an “experience” where viewers are able to order food and pitchers of beers so it serves as “dinner, drinks and a movie” right at the same venue. I’ve been to a couple and they’re tons of fun.
Gianandrea: I like how you hit on “flat” strategy. Cirque is so dynamic and, when I look at companies who’ve re-engineered their sectors, a dynamic strategy is critical.
Paul: Yep, these guys are dedicated to producing an original, passionate product–each and every time. I love how they say they “don’t want twins”.
The theatrical movie experience is very ready for reinvention! I’m glad to see everyone on board with this… maybe we can forward this over to the guys at Regal for their thoughts?
The best movie experience I ever had was the opening night of Lethal Weapon — at Mann’s Chinese on Sunset in LA. The place is so big, the experience was closer to a football game than a movie. That, and watching “George of the Jungle” (hang on) with my then-six year old in the pool, sitting in an inner tube, at the Fairmont Princess in Scottsdale in July. Unique settings that fit the creative, the audience, and the mood. Who wouldn’t want to see Casablanca in a bar?
Maybe we need to create a ‘virtual movie exhibitor’ that screens movies ‘on location’. Hmmm.
Stephen: Thanks for your idea, I will work to get a contact over at Regal to read these comments. Fingers crossed.
Yes, Mann’s Chinese Theater is an experience (I just got a private tour of the place last month. Wow!)
The Fairmont Princess experience sounds quite good–and much fun. I could see charging a decent premium for your ideas and right now movies need to compete at the box-office since DVDs are coming out so soon thereafter. No wonder I love seeing fan-frenzied movies on opening night…it’s a terrific experience.