Chipotle Industry Analysis Essay

The threat of new entrants in the market of Mexican Food restaurants, which serve food at a fast pace, is relatively high. It is easy to see how the barriers for entry into this type of industry would be low. The food is relatively easy to make, the locations to hold this type of restaurant are nearly endless, and the need is there. In this industry there are very few companies that hold a large amount of the available market share, thus making it relatively easy for new companies to get started. For Chipotle, their suppliers are the key to the type of business that they wish to portray to their target market. As a GMO free food chain, it is integral for the food which they buy has been raised with the utmost care and integrity. As such, this gives the suppliers a strong hold on the bargaining power, as the number of suppliers of this type is rather limited. The threat of substitute products for Chipotle is relatively high, due to the fact that the number of options available to the average consumer are nearly endless. Whether that be choosing to eat at home, or one of the many other restaurants that are available. It has been found that consumers who eat at Mexican restaurants such as Chipotle, also frequent restaurants with different ethnic backgrounds.

A consumer who walks into a Chipotle, any Chipotle knows they will be paying the same exact price they would at any other Chipotle. This is because Chipotle has elected to have a standardized menu, which includes a standardized price point. It can also be said that for a consumer who enjoys the fare served in Chipotle, it would be relatively expensive in terms of both time spent as well as money, to find a similar product from any other restaurant. That being said, as Chipotle has a fixed price on their fare, it gives them a low amount of power over their buying, as any change in cost comes directly out of their gross profit margins until they decide to raise their menu