Chipotle Swot Analysis

2603 Words Apr 20th, 2013 11 Pages
Chipotle’s History:

Chipotle Mexican Grill was originally opened in 1993, in Denver, Colorado. By 1996, there were eight Chipotle serving the Denver area. Chipotle brings on outside investors in 1998, and by 1999 McDonald’s became Chipotle’s majority holder. The company went public in 2006 and listed under NYSE with symbol: CME. As of Dec 2011, the company operates 1,230 restaurants in the U.S., two in Toronto, Canada, and two in London, England. The founder and CEO, Steve Ells, started with a philosophy known as “Food With Integrity” in 2001. This philosophy encompasses the fact that Chipotle wants to offer food that is “sustainable sources – naturally raised meat – locally or organically grown – and fresh” (Chipotle Mexican Grill,
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Chipotle’s wages are higher than industry competitor. According to averages from job-application.com, cashier’s wages for fast food industry averages $7.25 - $8.50 while Chipotle’s average wage is $8 - $10. Part of this higher labor costs was because Chipotle is facing obstacles to hiring and training qualified personnel in local market. As highlighted in the annual 2011, “Our business could be adversely affected by increased labor costs or difficulties in finding the right employees for our restaurants.” • “Food With Integrity” mission statement at risk. As identified in the 2011 annual report, organic and natural foods take a much longer time to grow and it also take much longer time to qualify suppliers. Due to the weak economic environment, many large suppliers do not see the benefit in sustainable farming practices thus was forced to revert to the traditional practices. To meet the demand of Chipotle’s expansion, a few of Chipotle’s markets reverted back to serving the conventionally raise beef in early 2012. This can potentially make Chipotle to become less popular among its customer and sales could decline as a result. • Expanding into markets with a diversified tastes and unfamiliar local market. Chipotle expansion to London and Paris may encounter difficulties as culture, taste preference, spending habits and lack of qualified suppliers for Chipotle’s high quality food standards could adversely impact the newly open
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