Chipotle: SWOT Analysis
Strengths * Positive brand image with customer loyalty * Providing healthy food, sourcing food locally. * A big amount of free cash flow to continue growing. * Strong management skills from top managers | Weakness * The priced menu items are quite high than some competitors. * Reducing of available source of ingredients nearby. | Opportunities * International expansion * adding of locally crafted beers to be more competitive | Threats * Rising food costs * Rising employee expenses |
Strengths
* Reputation – Chipotle has a reputation among consumers for being an ethical, charitable, and healthy choice. Chipotle’s first ever TV advertisement sums this up perfectly. * Quality local food sources – Aside from providing healthy food, sourcing food locally cuts down on shipping expenses. Communities look forward to Chipotle establishing locations in their area, not only for the great taste, but also for the benefit to the local economy. * Balance sheet – $573.9 million in cash, $3.6 million in debt, and $220.8 million free cash flow will provide the company with plenty of money to continue growing. * Management – Founder and CEO Steve Ells is more than capable of executing Chipotle’s growth plan. The company also has a reputation for hiring from within, so the execs know the business very well.
Weaknesses
* Price – Chipotle’s menu is priced well above competitors like Taco Bell. Where you’d be hard pressed to find anything that costs more than $5 at Taco Bell, that’s the least you’ll pay at Chipotle. Obviously, Taco Bell doesn’t think you should have to pay más in order to live más. * Availability of specific sourced foods – As it turns out, it’s really hard to grow a lot of produce year round in most of the United States. Chipotle inevitably must source certain ingredients from further away, or do away with certain menu items all together during colder months.
Opportunities
* International expansion – Chipotle is only
Strengths
* Reputation – Chipotle has a reputation among consumers for being an ethical, charitable, and healthy choice. Chipotle’s first ever TV advertisement sums this up perfectly. * Quality local food sources – Aside from providing healthy food, sourcing food locally cuts down on shipping expenses. Communities look forward to Chipotle establishing locations in their area, not only for the great taste, but also for the benefit to the local economy. * Balance sheet – $573.9 million in cash, $3.6 million in debt, and $220.8 million free cash flow will provide the company with plenty of money to continue growing. * Management – Founder and CEO Steve Ells is more than capable of executing Chipotle’s growth plan. The company also has a reputation for hiring from within, so the execs know the business very well.
Weaknesses
* Price – Chipotle’s menu is priced well above competitors like Taco Bell. Where you’d be hard pressed to find anything that costs more than $5 at Taco Bell, that’s the least you’ll pay at Chipotle. Obviously, Taco Bell doesn’t think you should have to pay más in order to live más. * Availability of specific sourced foods – As it turns out, it’s really hard to grow a lot of produce year round in most of the United States. Chipotle inevitably must source certain ingredients from further away, or do away with certain menu items all together during colder months.
Opportunities
* International expansion – Chipotle is only