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
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.
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
Chipotle’s Chief Executive Officer, Steve Ells has been reputed for having started the restaurant chain in a unique way which has contributed to its apparent success over its main competitors. Chipotle business has grown exponentially from when it was first formed with most of this growth attributed to the founder’s control process in the business. When Steve Ells first got into the industry, he acknowledged the need for promoting innovation and
Chipotle competitive advantage or Strengths has come from the ingredients that come from sustainable sources. According to the MarketLine article about Chipotle Mexican Grill SWOT analysis "Chipotle serves food using naturally raised meat (pork, beef and chicken) and dairy cattle... in 2014 the company served over 155 million pounds of naturally raised meat." Chipotle cares for their customers because they are not giving us food that has hormones and addictive substances. Their competitive advantage has changed the company culture and mission Statement nowadays they called it now food with integrity, the idea that their food is made with the respect for the animals and the
Such factors may include threat of new entrants, power of suppliers, power of buyers, product substitution, and the intensity of rivalry among competitors (Hitt, Ireland, & Hoskisson, 2013). Since Chipotle was opened in 1990, they have already become a well-established company within the industry. In order for Chipotle to continue having a competitive edge in the market, they must heavily compete with companies or restaurants such as Qdoba that offer a wider variety of menu options for lower prices. Chipotle directly works with suppliers, usually in local areas, to permit more competitive prices to buy their products. Since Chipotle focuses so greatly on product quality, the supplier’s power plays an enormous role in Chipotle’s ability to obtain their raw
As you know, Chipotle values our “food with integrity” promise and our customers respect that. However, the recent E Coli outbreak has caused Chipotle’s financial performance and reputation to suffer significantly and staying with our current business model is not our best option. Therefore, I recommend we rebrand and reposition Chipotle to ensure our long-term success.
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
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 Chipotle is using to increase operations and strategies used to compete against rivals in the competitive environment. Concluding with an overall evaluation of Chipotle’s business portfolio.
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
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.
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.
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