Understanding the number of competitors and their capabilities in a particular market is a key function of building strategy. If a company is competing against another company offering the same product or service, it faces limitation in regards to both supplier and buyer power. Customers will always tend to go to the place where they get the same product for a cheaper price, while supplier will tend to flock to places where the deal is considerably high. For CMG, a key differentiation in its competition within the fast food industry is designated I its ability to meet a one of a kind fast food experience where customers experience fine-dining similar to high0end hotels, but a low prices. CMG additionally differentiates totally with its rivals in the sense that they struggle to offer healthy and high-quality food that positively impacts the society.
Threat of Substitute Products or Services
The ability of customers finding a proxy to a particular service or product is always a threat in business. The result is often a weakened business position for a particular company. For CMG, it is no different. However, the brand that the company has built over the years offers protection to the company because of loyalty. The fact that CMG offers a healthy menu for its foods also offers little option in reason for the customer to substitute its products.
Threat of New Entrants
It is not easy for competitors to enter the market operated by CMG. Apart from traditional competitors, few new entrants have delved into this industry due to the following reasons; economies of scale, high entry barriers, specialist knowledge, and time/money costs. This allows CMG to focus only on traditional competitors such as McD...
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Chipotle Mexican Grill, Inc. (2014). Chipotle Company About Us. In Chipotle.com. Accessed on 27th May, 2014 from http://www.chipotle.com/en-us/company/about_us.aspx
Harvard Business Review. (2008). The Five Competitive Forces That Shape Strategy. HBR. Accessed on 27th May, 2014 from http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1
University of Oregon Investment Group. (2012). Chipotle Mexican Grill, Inc. UOIG. Retrieved on 27th May, 2014 from http://uoinvestmentgroup.org/wp-content/uploads/2012/04/CMG-Update.pdf
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