Memo 1
Lecture 4 – Internal Environment Assessment
MOS 4410: Strategy
Case: Chipotle Mexican Grill
Case Memo 3
Assignment Questions (you can use bullet points for all questions except #6. Please use sentences to explain your position):
1. What are the conditions in Chipotle’s general environment? Are these threats or opportunities?
Demographics
Target millennium
Is a strength because they respond well to their advertising strategy
Also a weakness because they are normally more price-conscious
Economic
There prices are much higher than their competition which is a weakness when the economy is bad, because customers are more likely to go with the cheaper substitute
Food prices are expected to rise, which may cause chipotle to raise there prices even more which will be a huge weakness, and may deter some customers
Consumer spending may go down
Sociocultural
Target individuals who care about sustainable, ethical and fresh food
Huge strength because this is why people are willing to spend more
Starting to use local farms
Huge strength because by supporting the community, the community is more likely to support them
Using solo panel and being more environmentally friendly is a trend people really like which makes it a strength
2. What are the conditions of Chipotle’s industry environment? What makes you successful in this industry?
Threat of new entrants is quite low because the fast food industry is mostly composed of big chain restaurants which makes it hard to come into: this helps to make them successful because they are already a large business
Power of suppliers is medium because negotiation between suppliers and buyers do take place; but in the end thy have more power because food prices are fluctuating they have to charge more sometimes
Product substitutes: high
Though taco bells Cantina Bell is lesser quality ingredients they are the same type of items on the menu
Qdoba also focuses on quality so they products are probably very similar
MOS 4410: Strategy
Case: Chipotle Mexican Grill
Case Memo 3
Assignment Questions (you can use bullet points for all questions except #6. Please use sentences to explain your position):
1. What are the conditions in Chipotle’s general environment? Are these threats or opportunities?
Demographics
Target millennium
Is a strength because they respond well to their advertising strategy
Also a weakness because they are normally more price-conscious
Economic
There prices are much higher than their competition which is a weakness when the economy is bad, because customers are more likely to go with the cheaper substitute
Food prices are expected to rise, which may cause chipotle to raise there prices even more which will be a huge weakness, and may deter some customers
Consumer spending may go down
Sociocultural
Target individuals who care about sustainable, ethical and fresh food
Huge strength because this is why people are willing to spend more
Starting to use local farms
Huge strength because by supporting the community, the community is more likely to support them
Using solo panel and being more environmentally friendly is a trend people really like which makes it a strength
2. What are the conditions of Chipotle’s industry environment? What makes you successful in this industry?
Threat of new entrants is quite low because the fast food industry is mostly composed of big chain restaurants which makes it hard to come into: this helps to make them successful because they are already a large business
Power of suppliers is medium because negotiation between suppliers and buyers do take place; but in the end thy have more power because food prices are fluctuating they have to charge more sometimes
Product substitutes: high
Though taco bells Cantina Bell is lesser quality ingredients they are the same type of items on the menu
Qdoba also focuses on quality so they products are probably very similar