Chipotle SWOT Analysis Analyzes, Chipotle started as a restaurant in Denver, Colorado in 1993 and was founded by Steve Ells. The company mainly sells burritos, burrito bowls, tacos, tortilla chips, salads, sodas, fruit drinks, tea drinks, organic milk, beer, and margaritas. Chipotle takes pride in its fresh and responsibly sourced ingredients which are free from any artificial flavors, colors, added hormones, or preservatives. Chipotle was one of the first among national restaurant brands to source organic ingredients. When it comes to the meat that Chipotle uses, it is the first national restaurant brand to use meat that is only responsibly-raised.
Did You Know? For Halloween night, Chipotle offers a discount on all meals from their menu when you dress up in costume.
Chipotle Mexican Grill is a well-known American restaurant founded by Steve Elles in 1993 in Denver, Colorado. Chipotle is renowned for serving the Tex-Mex (Mexican American) dishes to over one million people every day. Chipotle has 2724 restaurants which are mostly located in the USA as well as in a handful of international areas, i.e., Canada, France, Germany, and the United Kingdom.
This can only be achieved through a firm with extensive knowledge, experience and innovative strategies. To determine the strengths of the company potential, weaknesses, opportunities and threats, it is necessary to conduct a SWOT analysis by Chipotle.
Chipotle At A Glance – Chipotle SWOT Analysis
Company: Chipotle Mexican Grill, Inc.
Founders: Steve Ells
Year of establishment: 1993
CEO: Brian Niccol
Headquarters: Newport Beach, California, U.S.
Employees (Dec 2020): 88,000
Ticker Symbol: CMG
Annual Revenue (Dec 2020): US$5.98 Billion
Profit net income (Dec 2020): US$355 Million
Products & Services: Fast food and beverages | Burritos | Burrito bowls | Tacos | Salads | Tortilla chips | Guacamole
Company Website: www.chipotle.com
Top Chipotle Competitors
Competitors: Taco Bell | Qdoba Mexican Grill | Moe’s Southwest Grill | Rubio’s Coastal Grill | Baja Fresh | Freebirds
Chipotle SWOT Analysis – SWOT Analysis Of Chipotle
SWOT Analysis Of Chipotle analyzes the brand based on its strengths weak points, weaknesses, opportunities, and threats. With Chipotle SWOT Analysis it is clear that the advantages and disadvantages are internal factors, while threats and opportunities are external elements. Here we are going to talk about Chipotle SWOT Analysis. Below Is The Detailed SWOT Analysis Of Chipotle.
Chipotle Strengths – Chipotle SWOT Analysis
1. The provision of delicious food: Food that is delicious Chipotle Mexican Grill is widely known for serving a basic normal menu for its patrons that consists of tacos, salad burrito bowls, burrito bowls and burritos.
2. Classic method of cooking: The restaurant follows the traditional cooking methods for the preparation of their food, which includes fresh ingredients including cutting knives, pans and pots and grills, as well as stoves and ovens.
3. High-Quality Food: Chipotle is well-known for making use of fresh ingredients in the making of their food. Their menu is often described by the slogan ” Food with Integrity.”
4. Fresh food Fresh Food Chipotle does not have an oven or freezer in the restaurant. There are walk-in refrigerators that are stocked with fresh food items including spices, herbs and rice. And they make fresh foods like lime rice, guacamole, salsa, and meat each day by hand.
5. Reasonable Costs: To ensure that customers are happy, Chipotle Mexican Grill provides top-quality food and service, while making sure that the cost paid is affordable for the customers. The cost for their menu vary between $1.40to $8.00.
6. Large Network of Restaurant Chain: Chipotle is a large chain of restaurants. In 2020 Chipotle had 2,724 outlets across the globe, with the majority situated in the US and 40 other locations out of within the United States spread across Canada as well as Canada, the UK, France, and Germany.
7. Responsibly-Sourced Meat: With an unwavering focus on the environment and animal well-being, Chipotle Mexican Grill insists on using animals nurtured with respect, “Responsibly Raised,” without the recourse to non-therapeutic antibiotics or hormones,.
8. Maintaining Close Relations with Suppliers: The primary focus of Chipotle is in the purchasing high-quality, fresh ingredients, which is essential to ensure the highest levels of quality and safety at the restaurant. This is possible because of the close relationship with their trustworthy suppliers..
9. Digitally Friendly: Chipotle is extremely digital-friendly and has created an app for ordering in order to ease customers’ wait times during lunch and the dinner rush hours. You can place orders for food on Chipotle’s mobile app just a few minutes prior to going to the restaurant. This means you’ll be able to reduce the line to pay for your meal in just a few seconds. Chipotle’s e-commerce adoption has led to the company’s revenues rising for 2020, increasing it by 7.1 percent up from $5.6B during the year 2019 and $5.98B by 2020. This was a time when other establishments had been struggling to survive. The majority of Chipotle’s locations remained open for take-away orders due to the strong digital platform that it has built in the year 2017. The company’s digital sales accounted for 46.2 percent of its all sales revenues for 2020.
Chipotle Weaknesses – Chipotle SWOT Analysis
1. Dependence on the small quantity of suppliers: For the main ingredients, which are made up of pork, chicken, and beef Chipotle Mexican Grill depends on a few suppliers. In terms of quality Chipotle’s primary focus organization is quality, however, it also has led to significant controversy like the spread of E.coli in the year 2015.
2. High Salt Content: High Sodium Content Chipotle is known to contain high levels of sodium within its meals items, which could cause hypertension.
3. The menu is limited to food items: Chipotle’s menu does not offer a wide selection of food items since it’s restricted to tacos and burritos. In the end, customers are spending a lot on their competitors’ outlets including Panera Bread.
4. Unfavorable pricing: in this difficult moment, consumers are more worried about getting worth for their dollars. However, Chipotle decide to raise the cost of their delivery menus by 9% in 20 of its most popular markets. For instance it is $8.95 for pick up instead of $10.10 for delivery. A study of 25 chains from July of 2020 revealed that Chipotle raised the price of delivery of its most popular meals. Similar to other chains, Chick-fil-A raised the price of delivery menus by 29.8 percent, compared to 20.3 percentage increase for Starbucks in addition to 19.6 percent for McDonald’s. Chipotle’s pricing policy is not a good one and could cause its loyal patrons to choose its rivals.
5. Bad Food Safety: In the year 2018, over 1000 patients fell ill after eating Chipotle’s burrito restaurants. Chipotle was accused for infringing on food safety standards and was forced to pay $25 million in April 2020 to settle the allegations. It’s the largest fine ever imposed to a company by the U.S. Justice Department in an investigation into food safety. This is a serious flaw because customers are reluctant to dine in restaurants that are that are linked to outbreaks of food-borne illnesses.
6. The Overreliance on the US Market: Chipotle boasts 2 724 locations in all. The majority of them are in the US and there are only 40 restaurants outside within the United States, including 19 in Canada and six restaurants in the UK and a few located in France in France and Germany. Relying heavily on North American market is risky. Any issues on the market could be a major impact on the bottom line of the company.
Chipotle Opportunities – Chipotle SWOT Analysis
1. Expanding to International Markets: Chipotle has only a few of its restaurants outside of the U.S. As of Dec 2018, Chipotle operated 2,452 restaurants in the US but only 37 in the international market. This means that it must take advantage of this opportunity to increase its presence within its global market.
2. Digital Orders: As of December 2020 46.2 percent of Chipotle’s annual revenues ($5.98 Billion) comes from digital sales. The transition to digital sales is mainly caused by the pandemic. Chipotle increased its online sales substantially in 2020. It was up 174.1 percent by 2020. However, there’s the potential to increase its online (mobile delivery, catering and delivery) orders.
3. Change due to intense competition: The restaurant industry in the US is expanding rapidly in relation to its casual dining segment, its quick and speedy casual service which creates the possibility for Chipotle to improve its offerings according to its ambience and condition, brand’s image, location, service quality, presentation cost, and the quality of their food.
4. Training and keeping the best-performing employees The key to retaining the best employees: As restaurants in the US are becoming more competitive, and the regulation in the US is becoming more stringent, Chipotle can gain a competitive edge over its rivals through retention in its staff. This can be achieved through investing in the training of new employees, offering a high-paying salary, etc.
5. Option to drive-through (Chipotle): Chipotle drive-through option Chipotle plans to increase the drive-through service (also called Chipotle) within its establishments. This will increase ease of access and convenience for its customers, which will result in an increase in sales. The year 2020 will see Chipotle established 100 new restaurants that include Chipotle.
6. Delivery service: The company is launching a delivery service in conjunction together with Door dash, Uber Eats and Grub hub A delivery service that is in partnership with Door dash will let customers receive free delivery on all orders that exceed $10. Chipotle’s digital sales grew substantially (174 percent year-over-year) in 2020 due to the success of e-commerce and new strategic partnership agreements that include Uber Eats and Grub hub.
7. Introduce healthier choices: The number of conscious consumers is growing quickly. Chipotle has reintroduced their ” Lifestyle Bowls” in January of 2020. It includes healthier diet options such as keto and paleo. These new options on the menu attracted more new customers , and are among the most sought-after meals with regular customers. Chipotle could draw more customers in by offering products that promote health and well-being.
Chipotle Threats – Chipotle SWOT Analysis
1. The loss of trust among customers because of food-borne illnesses: Chipotle was hit by a string of health-related events that ranged from norovirus to E.coli and salmonella-related outbreaks which affected hundreds of customers across various states. This led to a number of customers have stopped eating at Chipotle. Chipotle has been plagued by the food safety scandal as evident by the decrease in sales the years 2015 and 2016.
2. Volatility in the prices of ingredients and materials sourced: Fluctuations in the prices of the ingredients, paper, fuel, and other supplies or materials can also affect business profitability. Prices of products are also dependent on seasonality, climate changes, and government regulations.
3. Third-party delivery partners can be a factor for the growth or failure of the business: Since the company relies on delivery partners to fulfill delivery orders, mistakes on the part of these partners can affect the brand image and customer satisfaction. Any potential closures by any of these partners or price increases in delivery can also affect the company’s sales.
4. Legal Procedures against Chipotle Legal Proceedings against Chipotle :The false claims made by Chipotle regarding the low calorific amount of its food could impact the image of Chipotle as a brand.
5. The challenges of attracting and retaining employees to keep them :Due to the rising demand for eating out in restaurants and the an increase in the economy overall The labor market is experiencing a downturn and is regarded as tightening. To attract new employees it was decided to conduct there was a day-long hiring spree was carried out in the name of Chipotle Mexican Grill.
6. Supply chain issues: Supply chain problems Due to the implications of strict rules governing the feeding and rearing of animals thousands of Chipotles faced difficulties with the supply of their pork.
7. Fined for violating Child Labor Law: In January of 2020 Chipotle has been fined $1.4 millions for violations of child labor laws within the State of Massachusetts. As per The New York Times, Chipotle allows 16-17-year-old employees to work more than 9 hours a day, which is in contravention in Massachusetts State law.
8. Market uncertainty: In 2020 the world’s food industry was negatively affected by the uncertainty on the global market. Chipotle’s sales fell by 16% during March alone, resulting in lower profits in the quarterly period from $88 million in Q1 of 2019 and $76.38 millions in the quarter which ended March 31st and ended on March 31, 2020. While Chipotle has seen a rebound in Q2 as well as quarter three of the year, the business requires stability in its market to regain its high-profitability and growth it had prior to the financial crisis.
9. More unified unions and stronger Collectives: The strength of workers’ unions and collectives is an issue that looms over every business that needs employees. In April 2020, the top leaders of Chipotle’s employees successfully convinced a federal appeals tribunal to reinstate an action collectively filed in the name of over 500 of their employees. If the court decides in the favor of employees, Chipotle will have to invest millions of dollars to meet the federal overtime regulations. More unions could hurt Chipotle’s profits.
10. Growing Competition: The ever-growing competition within the Tax Mex business may pressurize Chipotle and result in negative impacts on its share of the market.
Chipotle SWOT Analysis Template
This is the SWOT report that Chipotle has done. Please let us know if you have additional suggestions to add.
Let us know What do you think? Did you find the article interesting?
Write about your experiences and thoughts in the comments below.