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Elaborative SWOT Analysis of Chipotle – One Of The First Chains Of Fast-Casual Dining Establishments

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We have previously written an article on the Marketing Moves of Tasty Chipotle; this time we are back with another blog on Chipotle named SWOT analysis of Chipotle.

If you are planning to fly to the US and want to eat some delicious Mexican food especially Tacos & Burritos then Chipotle is for you. Chipotle is the first chain that gave birth to fast-casual dining establishments in the United States. The company’s reputation is strongly associated with providing fresh meal items, and its marketing and branding based on “food with integrity” focuses on sourcing ingredients from ethically minded suppliers.

Even though Chipotle is a 1990’s brand, its marketing tactics have been updated with the latest trends. Chipotle markets its product offline as well as online. But, Chipotle’s central focus has been digital marketing since the beginning of digital marketing popularity. 

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This blog has been written to gain a thorough understanding of Chipotle company, its products, its popularity, net revenue, and to give an authentic picture of the SWOT analysis of Chipotle.

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About Chipotle

SWOT Analysis of Chipotle - Chipotle App on Google Play
(Chipotle App on Google Play, Source: Google Play)

Chipotle Mexican Grill is a well-known American restaurant that was founded in Denver, Colorado in 1993 by Steve Elles. Chipotle serves Tex-Mex (Mexican American) cuisine to over one million customers every day. Chipotle has 2724 restaurants, mostly in the United States, but also in Canada, France, Germany, and the United Kingdom. 

Chipotle Mexican Grill has been able to facilitate a casual dining experience. It can also be seen in assembly-line service and the approach to fresh food preparation.

Chipotle invests maximum budget on marketing and advertising to create and spread brand awareness across its target market. It also gives Chipotle a competitive advantage, allowing the company to achieve dominance in the industry.

 

Quick Stats on Chipotle
Founder Steve Ells
Year Founded 1993
Origin California, U.S.
No. of Employees 88,000
Company Type Public
Market Cap $ 54.36 Billion (2020)
Annual Revenue $ 5.98 Billion (2020)
Net Income/ Profit $ 355 Million (2020)

 

SWOT Analysis of Chipotle - Chipotle Products
(Chipotle Products, Source: Chipotle Offical Website)


Products by Chipotle

  • Tacos
  • Burritos
  • Mexican Style Cusine 


Competitors of Chipotle

  • Taco Bell
  • Qdoba Mexican Grill
  • Moe’s Southwest Grill
  • Rubio’s Coastal Grill
  • Baja Fresh
  • Freebirds

Now that we understand the company’s key business, let’s look after the SWOT Analysis of Chipotle.


SWOT Analysis of Chipotle

SWOT Analysis of Chipotle can show how a well-established company uses its opportunities to ensure its growth. It can show how the company takes advantage of its strengths to use the opportunities while working on its weaknesses. SWOT Analysis of Chipotle will also reveal its expansion plans.

To better understand the SWOT analysis of Chipotle, refer to the infographic below:

SWOT Analysis of Chipotle - SWOT Infographics of Chipotle

Now first let’s begin with the strengths of the company from the SWOT analysis of Chipotle.

Strengths of Chipotle

  • Classic Method of Cooking: When preparing their food, the restaurant uses classic methods of cooking that include fresh ingredients, cutting knives, pots and pans, and stoves and grills.
  • High-Quality Food: Chipotle is known for using fresh ingredients in its food preparation, which is often marketed as “Food with Integrity”.
  • Fresh Food: Chipotle’s restaurants do not have a microwave or a freezer. They have walk-in refrigerators stocked with fresh ingredients such as herbs, spices, and rice, among other things. Every day, they hand-make fresh food from scratches, such as guacamole, lime rice, salsa, and meat.
  • Reasonable Prices: To ensure customer satisfaction, Chipotle Mexican Grill provides high-quality food while ensuring that the prices charged are reasonable for their customers. Their menu prices range from $1.40 to $8.00.
  • Large Network of Restaurant Chain: In 2020, Chipotle operated 2,724 restaurants worldwide, with most being located in the US and 40 locations outside of the United States spread across Canada, the UK, France, and Germany.


Weaknesses of Chipotle

  • Reliance on a Small Number of Suppliers: Chipotle Mexican Grill relies on a small number of suppliers for its main ingredients, which include chicken, pork, and beef. When it comes to quality, the entity’s focus is on integrity, but this has resulted in major controversies, such as the E.Coli outbreak in 2015.
  • High Sodium Content: Chipotle’s food is known for having a high sodium content, which can lead to high blood pressure.
  • Lack of Variety: Chipotle’s menu is limited to primarily burritos and tacos, resulting in a lack of variety. As a result, their customers spend relatively large amounts of money at their competitors’ locations, such as Panera Bread.
  • Food Safety: More than 1,000 people became ill after eating at Chipotle’s restaurants in 2018. Chipotle was sued for food safety violations and agreed to pay $25 million in April 2020 to settle the charges. It is the largest fine ever imposed by the United States Justice Department in a food safety case. This is a significant weakness because customers are hesitant to eat at restaurants associated with outbreaks of food-borne illness.
  • Excessive Reliance on the US Market: Chipotle has a total of 2,724 locations. The majority are in the United States, with only 40 restaurants outside of the country. It is risky to rely solely on the North American market. Any market challenges can have a significant impact on the company’s bottom line.


Opportunities for Chipotle

  • Expansion into International Markets: Chipotle has only a few restaurants outside of the United States. As a result, it should seize this opportunity to strengthen its brand in the international market.
  • Digital Orders: As of December 2020, digital orders accounted for 46.2 per cent of Chipotle’s annual revenue ($5.98 billion). Pandemics have accelerated the shift to digital sales. Chipotle’s online sales increased significantly in 2020, growing 174.1 per cent. Nonetheless, there is a significant opportunity to expand its online (mobile, delivery, and catering) orders. 

SWOT Analysis of Chipotle - The Future of Farming All in Hand With Digitalization - By Chipotle
(The Future of Farming All in Hand With Digitalization – By Chipotle, Source: Instagram)

Stunning Fact: Chipotle latest digital marketing strategies went the revenue up from $776.4 Million for last year to $ 2.4 Billion for the current year which is a stunning hike of 200%. All that included is telling stories about their farm-fresh ingredients with a flawless content strategy on social media platforms and ensuring a seamless digital experience for its customers. Digital innovation is their priority, said Chipotle’s CEO & VP of digital strategy.   

If you will go through the above links you will find how digital innovation helps one business to grow drastically. That’s how learning various sets of digital marketing skills is important and advantageous whether for a business or to grow a career with opportunities.

  • Training and Retaining Top-Performing Employees: Chipotle can gain a competitive advantage over its competitors by retaining its employees. It can be ensured by investing in new employee training, offering a competitive salary, and so on.
  • Collaboration with Delivery Partners: Chipotle’s digital sales increased by 174% year over year in 2020, thanks to effective e-commerce adoption and new strategic partnerships with Uber Eats and Grubhub.
  • Introduce Healthier Alternatives: The number of health-conscious consumers is rapidly increasing. Chipotle has the opportunity to attract more customers by offering health and wellness-focused options.


Threats to Chipotle

  • Customer Distrust as a Result of Food-Borne Illness: Chipotle was involved in several health-related incidents, which include swine flu, E.Coli, as well as salmonella outbreaks, which sickened hundreds of customers across several states. As a result, many Chipotle customers quit eating there. The company has been plagued by the food safety scandal since 2015, as evidenced by a decline in revenue figures from 2015 to 2016.
  • Legal Action Against Chipotle: Chipotle’s false claim about the low-calorie count of its food may have an impact on the brand’s reputation.
  • Supply Chain Issues: As a result of the implementation of strict policies governing animal feeding and raising, hundreds of Chipotle locations experienced difficulties obtaining pork.
  • Market Uncertainties: In 2020, the food industry was harmed by global market uncertainties. Chipotle’s sales fell 16% in March 2019 alone. Even though Chipotle rebounded in the second and third quarters of 2020, the company requires market stability to return to the high profitability and growth it enjoyed before the crisis.
  • Growing Competition: Growing competition in the Tex Mex industry may put pressure on Chipotle and hurt its market share.

This ends our elaborative SWOT analysis of Chipotle. Let us conclude our learning below.

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To Conclude

Chipotle is growing exponentially in the U.S. market due to the benefits of digital marketing, but somehow it is lagging to provide a variety of Mexican dishes to fulfil customer needs. Also, Chipotle is facing food safety challenges that can be cured by taking hygiene factors into account.      

If not, then Chipotle has to again face some strict legal actions in the future. If Chiptole start converting these weaknesses and threats into opportunity then soon is the day when Chiptole will gain the highest market share than its competitors.

Talking about the competition where marketing plays a crucial role, taking advantage of technology not merely in this industry in which every other company is focusing on digital marketing to rise ahead of each other.

If you have the curiosity to learn you may check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.

We hope this blog on the SWOT analysis of Chipotle has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.

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Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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