Chipolte External Factor Evaluation Paper
Student Name
Professor: Eugene E. Johnson
BUS 479 CORE – Strategic Management
05 May 2014
Chipolte External Factor Evaluation
Analysis of the External Environment Within the fast casual segment, there are certain external trends and forces that Chipolte must address. Some of these trends and forces can lend themselves to being opportunistic in nature; however there are some that can threaten the well-being of the restaurant. The success of a company ultimately depends upon how well it can use its strengths to take advantage of external trends. By utilizing an External Factor Evaluation Matrix (EFE) a company’s chief strategist can analyze and determine crucial external opportunities and threats important to the future of their …show more content…
Currently, there are numerous initiatives for developing LEED and other sustainable buildings. These buildings are very environmentally friendly, and offer advantages to the communities that they are erected within. At the head of this curve is Chipotle, which has received the first certifications for LEED-designed restaurants (fastcasual.com, 2008). Using sustainable buildings to house its restaurants is not only advantageous because it would appeal to customers, but there are also other governmental incentives in the form of tax credits and deductions (irs.gov, 2011). Thus, not only are sustainable buildings great for attracting and maintaining new customers, but it also makes great business sense …show more content…
The first of these potential threats pertains to rising food prices. The fast casual segment must especially take note of this because it already uses the highest quality ingredients which lead to higher costs. However, if food prices continue to rise, the industry would be forced to either cut costs or raise the prices on its menu. This is a very touchy subject as the restaurants within the segment cannot afford to raise prices too high without facing adverse effects to its normal business operations. The ease of entry into the market is also another threat that the organization must combat. Although fast casual restaurants offer a distinct experience for consumers, its products are not necessarily revolutionary by any means. This leaves them somewhat vulnerable to competitors to enter the market and attack the brand; especially given the low startup costs for restaurants. However, with adequate marketing and utmost customer satisfaction, these restaurants can maintain their customer base and thwart any potential
Professor: Eugene E. Johnson
BUS 479 CORE – Strategic Management
05 May 2014
Chipolte External Factor Evaluation
Analysis of the External Environment Within the fast casual segment, there are certain external trends and forces that Chipolte must address. Some of these trends and forces can lend themselves to being opportunistic in nature; however there are some that can threaten the well-being of the restaurant. The success of a company ultimately depends upon how well it can use its strengths to take advantage of external trends. By utilizing an External Factor Evaluation Matrix (EFE) a company’s chief strategist can analyze and determine crucial external opportunities and threats important to the future of their …show more content…
Currently, there are numerous initiatives for developing LEED and other sustainable buildings. These buildings are very environmentally friendly, and offer advantages to the communities that they are erected within. At the head of this curve is Chipotle, which has received the first certifications for LEED-designed restaurants (fastcasual.com, 2008). Using sustainable buildings to house its restaurants is not only advantageous because it would appeal to customers, but there are also other governmental incentives in the form of tax credits and deductions (irs.gov, 2011). Thus, not only are sustainable buildings great for attracting and maintaining new customers, but it also makes great business sense …show more content…
The first of these potential threats pertains to rising food prices. The fast casual segment must especially take note of this because it already uses the highest quality ingredients which lead to higher costs. However, if food prices continue to rise, the industry would be forced to either cut costs or raise the prices on its menu. This is a very touchy subject as the restaurants within the segment cannot afford to raise prices too high without facing adverse effects to its normal business operations. The ease of entry into the market is also another threat that the organization must combat. Although fast casual restaurants offer a distinct experience for consumers, its products are not necessarily revolutionary by any means. This leaves them somewhat vulnerable to competitors to enter the market and attack the brand; especially given the low startup costs for restaurants. However, with adequate marketing and utmost customer satisfaction, these restaurants can maintain their customer base and thwart any potential