Chipotle Case Analysis
Chipotle Case Analysis-By Team PYSHEN
Strategic Issue:
Chipotle plan to find out a correct and effective strategy to continue its sustainable growth and to maintain its profitability by penetrating high market share while competing with its powerful rivals in the fast-casual food industry.
External Environment analysis:
GENERAL: 1. Demographic: Population size (O): potential increase in US; Age structure: mainly servicing adult between 18-49 years old; Geographic distribution (O): 39 states in the US, 1 in British and 2 in Canada; Ethnic Mix: N/A; Income Distribution: medium or high income (Customers willing to pay the premium). 2. Economic (T): stagnate, increasing food cost price (demotic 3.9%, global 37%) and customers’ dwindling budgets. 3. Political (T): ICE shifts its focus; PETA asked to use CAK; definition of healthy food. 4. Sociocultural (T): Higher wage for CIW. 5. Technological: Prevailing Social media (O); Tortilla grill machine (T). 6.Global: Cultural differences for new stores (T) in international markets. 7. Physical Environment: N/A.
INDUSTRY: 1. New entrants (H): Low Barrier, small economies scale, product taste better, and small capital requirements. 2. Suppliers (L): customized food, many local farms. 3. Buyers (H): low switch costs, sales represent all revenue. 4. Substitute (H), low switch cost, many choices. 5 Rivalry (H), many equally balanced competitors; low storage cost.
Internal Environment Analysis:
Tangible Resources: Financial (S): High ROI (approx. 10%) and operation cash flow. (V) Capacity to borrow: N/a. Organizational: autonomy in operation, strong incentive. (V). Physical: 22 independent distributers with high qualities. (R), hard to get “A” location, and higher cost of construct, new stores’ sales are cannibalized by existing ones. (W), local supplier and regional distributer, which reduce cost of transportation (V, R, I) Tech: No tortilla grill (W). Intangible resources: Human (S): Restaurateur program to train
Strategic Issue:
Chipotle plan to find out a correct and effective strategy to continue its sustainable growth and to maintain its profitability by penetrating high market share while competing with its powerful rivals in the fast-casual food industry.
External Environment analysis:
GENERAL: 1. Demographic: Population size (O): potential increase in US; Age structure: mainly servicing adult between 18-49 years old; Geographic distribution (O): 39 states in the US, 1 in British and 2 in Canada; Ethnic Mix: N/A; Income Distribution: medium or high income (Customers willing to pay the premium). 2. Economic (T): stagnate, increasing food cost price (demotic 3.9%, global 37%) and customers’ dwindling budgets. 3. Political (T): ICE shifts its focus; PETA asked to use CAK; definition of healthy food. 4. Sociocultural (T): Higher wage for CIW. 5. Technological: Prevailing Social media (O); Tortilla grill machine (T). 6.Global: Cultural differences for new stores (T) in international markets. 7. Physical Environment: N/A.
INDUSTRY: 1. New entrants (H): Low Barrier, small economies scale, product taste better, and small capital requirements. 2. Suppliers (L): customized food, many local farms. 3. Buyers (H): low switch costs, sales represent all revenue. 4. Substitute (H), low switch cost, many choices. 5 Rivalry (H), many equally balanced competitors; low storage cost.
Internal Environment Analysis:
Tangible Resources: Financial (S): High ROI (approx. 10%) and operation cash flow. (V) Capacity to borrow: N/a. Organizational: autonomy in operation, strong incentive. (V). Physical: 22 independent distributers with high qualities. (R), hard to get “A” location, and higher cost of construct, new stores’ sales are cannibalized by existing ones. (W), local supplier and regional distributer, which reduce cost of transportation (V, R, I) Tech: No tortilla grill (W). Intangible resources: Human (S): Restaurateur program to train