Chipotle Strengths And Weaknesses

544 Words 3 Pages
Weaknesses
In respect with the weaknesses, Chipotle’s weak presence outside of the U.S. is one of them. As December 2016, Chipotle had only 29 restaurants outside of the U.S. domestic market, distributed across Canada, UK, France and Germany. Because of the limited number of stores abroad, Chipotle has lower brand awareness among the consumers in the international markets (CMG, 2017).
Another weakness is that there are limited suppliers in the market that meet Chipotle’s Food with Integrity standards, which demand the suppliers to practice ethical and sustainable farming. For instance, in the 2015, Chipotle identified a pork supplier that failed to meet the company’s standards and stopped its purchases from this supplier. As a result, Chipotle
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as 2016. With a low unemployment rate of 4.9% in October 2016 and an increased median household income, the consumer confidence has been improving in the U.S. (Euromonitor International, 2017c). The high consumer optimism implies that consumers are more willing to spend and hence more likely to eat out. This might increase Chipotle’s restaurant sales and allow the company to further expand its business.
Moreover, the increasing health awareness among the U.S. consumers could also contribute the future growth of the company. Greater awareness about the risks of obesity has changed many consumers’ mindsets, driving American consumers to eat healthier and to choose natural ingredients over highly processed food (Euromonitor International, 2017c). Chipotle, which is firmly committed with Food with Integrity philosophy, may appeal more consumers as they become more health-conscious.
Another opportunity for the company could be the introduction of new menu items. Although Chipotle allows its customer to customize their orders by adding different ingredients, the company still has comparatively focused menu with limited choices. By adding new menu items, Chipotle can boost the sales through attracting curious diners or new
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More restaurant chains are inclining to the concept of fast casual and starting to offer more premium products and services. Even traditional fast food chains like McDonald’s are taking measures to adapt the current consumer taste that demands higher quality and fresher food. Hence, Chipotle may face increasing competitive pressure in the market, from not only fellow fast casual restaurants but also other dining outlets.
Another threat could be the increase in food and supply costs. A clear example is the sharp increase in the avocado prices in 2016 that had negatively impacted Chipotle’s food costs and so its profit margins (CMG, 2017). Because Chipotle uses higher quality and thus more expensive food ingredients than many other quick service restaurant chains, the company might even be more sensible to the changes of ingredients costs.
The increase in labor costs could also a threat to Chipotle. In effective as of January 2017, nineteen states in the U.S have raised the minimum wages (NCSL, 2017). The increase in minimum wages might adversely affect Chipotle’s labor costs and hence its

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