Cirque du Soleil's lucrative market share is likely to provide incentives for new entrants, however, because of the high barriers to entry, risk of new entrants is deemed moderate.
There are large start-up costs associated with the circus industry. The financial cost is high due to the unique equipment, talent and infrastructure they require to perform on a worldwide scale. There is also huge customer loyalty to the show and the type of performance it provides. Corporate events are even tied in with Cirque du Soleil's performance because of its ability to appeal to sophisticated adults in the business community.
The bargaining power held by suppliers of equipment is moderate due to the specific nature of equipment used by Cirque du Soleil. The equipment used tends to be unique depending on the performance and made with quality and safety in mind. The bargaining power of requirement suppliers is controlled through the economies of scale that Cirque du Soleil possesses, with 22 different performances worldwide and 5 changing themes concurrently running. As they are likely to be a major customer for any supplier, Cirque du Soleil's business is highly valued, the potential to push Cirque du Soleil to find other sources of equipment is sufficient to discourage suppliers from overcharging.
Bargaining power of buyers is relatively low mostly due to the nature of the service Cirque du Soleil provides. As a premier event defined by innovative performances, both classy and exciting, it is appealing to a wide range of audiences. The reputation and uniqueness that Cirque du Soleil promotes entices corporations to purchase tickets for clients, staff and families to treat themselves to a special night. In essence Cirque du Soleil commands the ability to charge higher amounts for each ticket than its closest circus competitors.
There are no direct substitute products for the Cirque du Soleil experience.
