Porter’s Five Forces Analysis
I. Rivalry – There is a medium level of competition amongst rivals, due to the unique business strategy of Chipotle. However, more consumers are pursuing healthier lifestyles which will increase the demand of high-quality, fresh, organic food. If this comes to fruition, the competition amongst rivals would become higher.
II. Threat of New Entrants – In the food industry, consumers’ attitudes are based on their brand loyalty and preference. Although the capital for the new entrants could be low, the brand loyalty is difficult to establish in the short-run; therefore, the threat of new entrants is low.
III. Threat of Substitutes – The threat of substitutes is at a medium level because the differentiation of Chipotle’s
External environment analysis plays an important role in shaping the overall industry. It helps keep the business ahead of its competitors and providing opportunities for implementing innovative ideas. Based on demographic, Chipotle focuses majority of its sales on “Millennials”, who are between the ages 18 and 24. “Serving high quality food with reasonable prices” and the ability to customize your meal with a variety of different options in a fast paced environment is something many consumers are attracted to especially the younger generation. Chipotle’s first restaurant was established in Colorado but now they have restaurants all throughout the United States, Canada, United Kingdom, and so much more, located primarily in urban areas.
The company is driven by a strong set of values, even if some of those decisions increase its costs internally. This is especially the case with the sourcing of its ingredients and meats. In fact, the high-quality ingredients and advanced cooking methods used by Chipotle are second to no other fast-food chain. Among recent developments, the leader in fast-casual dining concepts plans to become absolutely GMO-free by the end of 2014. Although the aim is not new, it shows Chipotle’s commitment to bring fresh ingredients to the table. Besides offering high-quality meals to its customers, the portions are generously sized and the value is unmatched. There are very few places that can fill you up for less that $10 with quality food, and not junk. The triad of fresh, pure ingredients, cutting-edge cooking methods, and tremendous portions gives Chipotle a mouthwatering appeal.
Lawry’s sauce poses a serious threat to A1. Both firms have great brand awareness and unique value propositions. Though they have unique value propositions both the products are positioned close by regards to their offerings (Exhibit 3). Provided that Lawry is successful with its marketing campaign the launch threatens to cannibalize A1’s market share resulting in a hit in its profit. Nevertheless, A1 can leverage its strong market presence to ward off Lawry’s threat whilst at the same time it can also establish itself as a prominent player in the growing marinades market, already having 10% of the existing
The threat of new entry for the industry is low, as considered by high costs and intense price competition, which make the industry’s profit margins very low. In the United States the market is concentrated, where the 50 top firms, including: Wal-mart, Kroger, Safeway
Simpson, S. (2015). Chipotle Mexican Grill Inc.: Strategy with a Higher Mission or Farmed and
C. Thesis Statement- The purpose of this presentation is to demonstrate why Chipotle is an undisputed leader in the growing fast food casual.
In order to right the ship that is America’s food industry, we need to recognize the monopolies in the U.S food industry. These massive food conglomerates must be broken up in order to create competition in the market. This will allow the completion to dictate the market. More companies means more competition, and when companies compete, the consumer wins.
When Chipotle was revealed as the source of multiple outbreaks of illnesses that sickened nearly 600 people in 13 states in 2015, it came at a significant cost. We closed stores, spent several months under investigation by the CDC and other health organizations, and we faced a criminal investigation in connection with the incidents. With significant decreases in same store sales, operating margins as well as a 44% drop in our net income for the final quarter of 2015, it is evident that this crisis plunged Chipotle to a never before seen depth.
When Chipotle first opened in 1993, the goal was to serve quality food fast, but not be considered “fast food.” To avoid falling under the fast food stigma, Chipotle strives to find the best ingredients with respect to animals, farmers, and the environment. In order to achieve these goals, Chipotle has created a matrix organizational structure that is divisional by location and functional by authority. Chipotle recently expanded internationally to the United Kingdom, Germany, and France, each following strict guidelines assigned by corporate employees from their headquarters in Denver, Colorado. Similarly, each location is functionally organized according to authority: regional manager, district manager, store manager, assistant manager, and
Now we will look at some of Chipotle’s biggest competitors. Although there are many, we will be looking at the ones that are similar in genre of food and the fast and fresh concept. The main three competitors that have been identified are Moe’s Southwestern Grill, Qdoba and Fuzzy’s Taco Shop. All three competitors have their own unique competitive advantages and distinguish themselves separately amongst their
Abstract This paper explores the business strategies Chipotle is using for operations. Analyzing financial and operations data to discuss areas of concern as well as areas where Chipotle Mexican Grill is doing well. Discussions will include the importance of Chipotle’s menu preparation strategy and menu integrity. The marketing strategies
Thus, to conclude this section, it is clear to see that consumer behaviour in Ireland is rapidly changing. Economic circumstances, and the rapid pace of technology seems to be main influences which are affecting the way consumers make decisions to purchases certain brands of products from Irish supermarkets. And so, successful marketing requires that companies study this behaviour, and try to use the information to create important, lasting relationships and increase value for Irish consumers.
There were fierce competitions among the producers that have scale and scope of operations which were similar to each other. For instance, the Pepsi Co. and Coca Cola companies have developed the strategy and infrastructure, which are hard for the local sellers to complete with them. However, there were still many producers including new entrants that try to access the market and compete seriously with low price and differentiation- strategies among rival...
These forces include the intensity of rivalry from traditional competitors, threat of new market entrants, threat of substitute products and services, bargaining power of customers and bargaining power of suppliers (Laudon & Laudon, 2007). See diagram below for more information. Traditional Competitors (competitive rivalry). McDonalds traditional competitors include many of the other fast food outlets across the country, i.e. Burger King, Taco Bell, KFC, Wendy’s. It has been shown by Professor Michael Waterson (2004) that the presence of a Burger King, for example, will increase the likelihood that McDonalds will open nearby.
Threats of New Entrants: The threat of new entrants into the processed food industry is quite low. There are a great number of existing companies in the industry which deters potential entrants. Market share is tough to obtain and the current competition has already obtained fair shares within the industry. Current