The restaurant industry has several companies that compete with one another in the corporate market. Chipotle Mexican Grill is an example of a company within the restaurant industry that has to outdo its many competitors to dominate the market. This paper examines Porter's Five Forces of Chipotle Mexican Grill, the technology and innovation trends for the company, assessing the situation regarding its recent development, and evaluating if its organizational structure supports or obstructs its innovation.
Five Porters Model for Chipotle Mexican Grill
Threats of New Entrants
Various options or alternatives exist for Chipotle Mexican Grill in the corporate market. The cost for entrance and establishment of competitive companies is not high, which makes it easy for brands to penetrate into the market. However, Chipotle has a brand loyalty and image, which makes the company have a market advantage over new entrants. Thus, for new companies to compete with Chipotle, it will take some time. The threat for Chipotle regarding new entrants is therefore still moderate.
Threat of Substitutes
Many substitutes exist as far as food products are concerned. Substitutes for Chipotle include not only Mexican food from Taco Bell brand but also from other global brands. These companies compete regarding the quality, the menu, marketing strategies, and the price among other factors. To survive in the market, Chipotle offers affordable food products as well as convenience in delivery. Other companies counter the advantage that Chipotle has over them through maintaining a good image for their brand and better marketing strategies (Gilliard, Hoffman, & Baalbaki, 2017). In this regard, it is notable that Chipotle faces high threat from existing substitutes.
Bargaining Power of Suppliers
The restaurant industry has many competitive players, which makes suppliers have many options for their goods. Suppliers have to compete among themselves regarding quality and prices to sign a contract with food restaurants. However, Chipotle needs to be careful in choosing their suppliers as they have a direct impact on their final services and products. Wei, Low, and Schiffauerova (2018) explain that these suppliers should have a good reputation in the food industry to avoid losing its brand image. Suppliers' bargaining power for Chipotle is, therefore, very moderate.
Bargaining Power of Buyers
Buyers have many options or alternatives to choose from in the restaurant industry. Notably, a range of food companies exist that meet buyers' needs of quality food and price. Chipotle needs to retain existing buyers and attract more to achieve profitability. Thus, its buyers have very high power of bargaining (Gilliard et al., 2017).
Food chains have strong rivalries in the present markets. Many cuisines give Chipotle competition. For instance, it faces rivalry from Panera, Taco Bell, Moe's, and Qboda, among others. Chipotle has intensified its efforts to improve its brand image. In this regard, Chipotle experiences a high level of industry rivalry (Gilliard et al., 2017).
Innovative and Technology Trends That Chipotle Uses
The company, Chipotle Mexican Grill, has innovatively capitalized on the current trend of green consumption behavior to its advantage (Namkung & Jang, 2013). It has incorporated the sale of high-quality organic food, which has attracted the contemporary customers who believe in environmental conservation. Chipotle Mexican Grill has invested in flat-screen panels that are instrumental in making its workers to easily fulfill many off-site orders (Zabeen, Wei, & Lu, 2016). The use of flat-screen panels and adopting green products will be helpful in improving sales and productivity of the company as they attract many customers.
Assessing Chipotle Mexican Grill Situation regarding Its Recent Development
Chipotle has over the years experienced growth regarding customers and productivity. The company engages in corporate infrastructure ownership and emphasizes on selection of store managers who can execute its strategies to meet its growth opportunities. The company also engages in interactive ordering process that enables its consumers to personalize experience and meals. Also, it empowers its workforce through rewards and development systems that facilitates innovation and employee retention. Moreover, the company has initiated a centralized procurement purchasing that seeks to reduce operating costs and promote collaborations and partnerships with suppliers. It is essential to understand that these partnerships not only reduce transportation costs but also solve challenges that deter quality food. It has also utilized social media g to market its products aimed at lowering its cost (Swenson & Olsen, 2017).
Opinion on Whether Organization Structure of Chipotle Mexican Grill Promotes or Hinders Innovation
The organizational structure of Chipotle incentivizes hard work as well as limiting attrition. This structure makes the company to expand effectively. According to Stevens and Lunsford (2014), the structure places an employee at the entry level on assembly lines and then rises to become a restaurateur finally. This particular organization chart is prudent for Chipotle Mexican Grill since it promotes expansion and innovation as it instills its employees to its culture.
Every company requires developing strategic innovations to survive in the competitive markets. Chipotle Mexican Grill has experienced growth in its size and productivity. The Chief Executive Officer of Chipotle needs to understand the company's competitive analysis as well as the current trend in the market and initiate corporate infrastructure ownership, an interactive ordering process, and so on. By so doing, Chipotle will outdo its competitors and dominate the market.
Gilliard, D. J., Hoffman, D. L., & Baalbaki, S. (2017). Is Chipotle Mexican Grill Successfully Recovering from Its Food-Related Incidents?. Journal of Marketing Development and Competitiveness, 11(4), 34-48.
Namkung, Y., & Jang, S. S. (2013). Effects of green restaurant practices on brand equity formation: Do green practices matter?. International Journal of Hospitality Management, 33, 85-95.
Stevens, N. L., & Lunsford, R. (2014). Beyond the burrito: Chipotle Mexican Grill's brand extension. Journal of Business Cases and Applications, 12, 1.
Swenson, R., & Olsen, N. (2017). Food for thought: Audience engagement with sustainability messages in branded content. Environmental Communication, 1-16.
Wei, W., Low, J. F., & Schiffauerova, A. (2018). Nobody wants to buy sour milk: supply chain performance measure matters. International Journal of Logistics Systems and Management, 29(1), 62-81.
Zabeen, S., Wei, J., & Lu, X. (2016). Development of E-business solutions for fast food restaurants. International Journal of Services and Standards, 11(1), 60-80.
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