PESTEL Analysis: Chipotle Analysis Of The Fast Food Industry

1120 Words 5 Pages
Overview

In order to develop a successful strategy for a business, it needs to analyze both the external factors of the industry and the internal factors of the business. There are many tools that can be used to analyze the external environment. This paper will analyze the fast food industry, where Chipotle Mexican Grill, Inc operates, by using PESTEL analysis and Five Forces model.

The PESTEL Framework

It is an analytical tool that describes a framework of external factors that is used for strategic planning and managing. The framework studies and analyzes six different factors, including political, economic, sociocultural, ecological and legal forces. It helps businesses in identifying and analyzing external factors that influence the
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The first factor is that consumers nowadays have become more health-conscious about what they eat. That might lead fast food restaurant companies to add healthier selections within their menus to adapt to this trend. Second, changes in customers tastes and preference have a significant impact on fast food businesses. For instance, US consumers became more demanding for authentic ethnic cuisine like Latin American foods (Passport 2016). Third, growing ethnic diversity is one the factors that affects fast food restaurant companies. Increasing the immigration rate has lead to an increase in ethnic diversity, which require companies to understand different cultures and tastes and try to meet them. Fourth, consumers tend to request additional services from these restaurants, including drive-through service, online ordering, and home delivery options. These services affect businesses due to the increasing costs. If a business promotes to offer more convenience for its customers by offering home delivery, the delivery might cost the business more than the delivered meal …show more content…
First, environmental lobbyists and many of the governments are pressuring the fast-food restaurant companies to become more sustainable and developing green, environmentally-friendly products. This factor influences businesses’ performance and their brand image because many governments levy huge fines upon companies for polluting. On the other hand, businesses are rewarded for having positive efforts toward the environment. Second, the environmental awareness increases among consumers, and they appreciate the companies in adopting CSR programs. Consumers in the industry are willing to switch brands easily if they realize a business is ignoring its environmental duties. Therefore, that could be a significant opportunity for fast food restaurants to position themselves as ‘green’ in order to gain customer loyalty and change or improve the bad image that associated with companies in this industry. Third, there are some common environmental factors that might impact businesses’ performances such as waste disposal laws, environmental protection laws, and energy consumption. However, that might benefit businesses, for example, in reducing costs, increase efficiency, and satisfying all the

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