How did Cirque du Soleil become so big, and what lessons does it teach us?

The circus industry was (and remains) a highly competitive and saturated market, where many players compete to ‘steal’ customers from each other.

In the book Blue Ocean Strategy, renowned business professors Chan Kim and Renée Mauborgne describe the circus industry as a ‘red ocean’ of competition. Firms fight to secure their share of a static or shrinking market. Battles turn the waters red.

The traditional circus industry was in decline when Cirque du Soleil came onto the scene. Cirque realized that it wouldn’t be a good idea to compete with large established circuses, such as Ringling Bros. and Barnum & Bailey.

Cirque du Soleil came up with a new value proposition that eliminated all the unnecessary and costly elements that traditional companies took for granted. It discarded everything not essential – such as animal acts, expensive star performers and multiple show arenas.

In their place, Cirque du Soleil ramped up the theatrical, storytelling element. It combined the best elements of circus and theater. As a result, it could charge several times more for tickets than traditional circuses, and attract a new kind of customer.

Cirque didn’t try to compete with traditional circuses which target children and families, but neither was it in the same market as theaters catering to ultra-sophisticated audiences.

In short, by totally reinventing the circus and attracting adults, Cirque du Soleil escaped all competition. It created for itself a ‘blue ocean’ of virtually unlimited demand.

As Kim and Mauborgne put it: “Red oceans represent all the industries in existence today. This is the known market space. Blue oceans denote all the industries not in existence today. This is the unknown market space.”

Cirque du Soleil was able to create a blue ocean for itself – a new category of entertainment with virtually no competition. To date, its productions have been seen by over 150 million people in over 300 cities around the world.

That’s the power of “blue ocean” strategy. What other industries are ripe for the blue ocean treatment? Which one could you tackle and make yourself rich in the process?