Circus Industry Case Study

The increasing power of suppliers and the threat of substitute products or services were the main reasons that made the circus industry appear unattractive in the early 1980s.

The increasing power of suppliers was the first reason that made the circus industry unattractive in early 1980s. In order to maintain the tent setting, a symbolism in the contemporary interpretation of circuses, a huge space was required. Therefore, circus tents were usually located in rural areas where attendance was low and often only one show would be held per day. Local work labor became a critical cost in the circus industry. The stage setup and equipment transportation are labor intensive and dangerous in the circus industry. The unionization of local labors and tightening restrictions on the use of child labor led to the increasing power of suppliers and diminishing profit potential. Problems such as the increased time spent in negotiating with unions, extra work hours, and increased worker benefits demanded by laborers contributed to rising costs. Extra time spent for stage setting and extra costs to stay in a city also increase costs. All of these factors contributed to the erosion of profits in the circus industry.

The threat of substitute products or services also decreased the attractiveness of the circus industry. The buyer’s cost of switching to the substitute is low. Circus performances are region restricted and time limited. Buyers can easily find other recreational activities to do when it becomes economically inconvenient to attend a circus performance. Therefore, in the early 1980s after the end of the postwar “baby boom,” the birthrate decreased and number of target audiences decreased. Also, due to the economic policies implemented in early 1980s, many poor and middle-class families suffered economically. This caused them to turn towards other cheaper recreational options such as sports and television shows. At the same time,