Cirque Case Study Essay

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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
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relationships could increase  Cirque may have to surrender Instanbul tix sales by 10%. some control over the “chain of Opportunity for additional value” to create a package that performances in Ankara as well as TTE sees as financially viable Eastern European cities where Cirque has little experience. Will accept a fixed show fee contract or cost‐sharing contract. Choice of show is not a major concern. Very experienced event managers in Turkey and Eastern Europe, including places Cirque has never performed.

TTE

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MBC 635

Instructor’s Solution for Cirque du Soleil Tour Planning

Fall 2012

2) Evaluate the financial aspects of the two proposals. (4 pts) a. Compare the estimated potential revenues from all sources (box office, promotional revenues, and sponsorships) for the two proposals. If appropriate, provide a range (pessimistic, most likely, optimistic) for each. b. Compare the estimated costs (Installation, Operations, Fixed and administrative, and any extraordinary expenditures associated with either proposal). For this question, you may assume that Cirque will only consider a show that is already in Europe, and thus would not involve an international transfer. c. Estimate the contribution to profit for the two proposals. Some variability in assessments of the financial aspects of this case seems inevitable. For brevity, I’ve reported my best guess about potential revenues,

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