Send in the Clowns - Value Innovation in the Stagnant Circus Industry

In 1984, a small band of Canadian street performers set out to breathe life back into the tired circus industry. In creating Cirque de Soleil, a unique amalgam of circus, opera, theater, and spectacle, founders Guy Laliberté and Daniel Gauthier turned what used to be traditional circus shows for kids into unconventional entertainment, primarily targeted to adults. Matt Williamson, Professors Chan Kim, Renée Mauborgne, and Ben Bensaou, explore how this troupe went about creating a new market space, a strategy that has proven highly successful and hugely profitable.

by Ben Bensaou,Chan Kim,Renée Mauborgne

In 1768, Englishman Philip Astley stumbled upon a clever idea. He set up a ring, trained a few horses and sold tickets to an equestrian act. His idea caught on and the modern-day circus was born. Soon after, famous names like P. T. Barnum, George Bailey and the Ringling Brothers expanded on the idea, bringing clowns, acrobats, jugglers, and animal tricks to small towns across America. But the Great Depression and World War II combined to knock the air out of the once thriving circus industry, which hobbled along until 1984, when two clever Canadians succeeded in seeing something others couldn’t.

Their story is brought to us by Matt Williamson, INSEAD MBA 2000, under the supervision of INSEAD’s W. Chan Kim, The Boston Consulting Group Bruce D. Henderson Chaired Professor of International Management, Renée Mauborgne, INSEAD Distinguished Fellow and Affiliate Professor of Strategy and Management, and Ben Bensaou, Professor of Technology Management and Asian Business.

In Part A of the case we take a historical spin through the milestones of the circus industry, from its glory days in 1919, when Ringling Brothers and Barnum & Bailey Circus had a staff of 1,200 and commanded a train of 100 rail cars, to the debilitating effects of the Great Depression and World War II. Along the way, changing social interests, competition from television and film, and urban sprawl all do their part to change the face of the circus industry.

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