CASE ANALYSIS

Case Analysis and Questions

Case Analysis and Questions

Section A: Case Study

Introduction of Chipotle

Clearly, the food sector is running very successfully throughout the world, where every company is looking for a gap in the market. Chipotle is one of the most successful fast food restaurants in the country. It is a quick service restaurant that has achieved lot of success and also left its original market to capture the masses with its good quality. One of the main objectives of the company is to offer the best product at the most suitable price. There are some interesting facts about this franchise which makes it the fast food chain leader in the world.

Quick serve restaurant that doest compromise its quality and provides customer satisfaction which is the reason they have customer loyalty. The main strategic priorities of the company are to provide excellent service to its customers by emphasizing on the quality and to look after the customers` preferences and priorities at the top most level. However, there are a lot of competitors emerging rapidly all over the country as well as the world. This is the reason why the restaurant has to come up with effective strategies to maintain and gradually increase its popularity and sales. This paper will come up with different strategies for Chipotle for the upcoming five years.

External Environment

PEST Analysis

Political Factors

The political surrounding can be strongly affected marketers decisions. There has been increased regulation of business in recent times. The fast-food delivery service market was highly affected by the introduction of (GST) Goods & Service Tax which resulted in the changes of prices in fast food delivery services while the prices of other food items remained unchanged (Blattberg et al, 2009, pp. 57). Therefore, the fast food delivery services industry gives more emphasis on service rather than product stating that the customer will not get such type of service in their homes to differentiate them.

Economic Factors

Food prices, worldwide have shot up over the decade or so. Food cost is the highest expense in the chain's total costs; thus inflation of food costs would result in profit margins being squeezed. For e.g. in the case study, it says that the cost of chicken has increased from $1.20 in 2001 to $2.50 in the year 2004. That is an increase of over 100% percent. Chicken segment of the fast food industry is particularly hurt by this sudden price rise, as customers are not ready to pay more for their meals (Linstead et al, 2009, pp. 56). Labour cost is second in the terms of total costs of the restaurant chains. Restaurants are trying to provide better service to customers, thus are employing more experienced employees who demand better pay, health insurance and pensions plans. All of these factors has resulted higher labour costs for the resultants. Thus, higher food costs coupled with high labour costs has not only increased the overall costs of the restaurants chains but coupled with higher growth of incomes of people has decreased ...