The primary external factor that was found to be affecting Chipotle Mexican Grill is the competition. David (2017) defines it as one of the most critical factors that have to be taken into consideration when discussing a business’s environment. Chipotle has to contend with both other fast-food locations, including ones that also serve Mexican food, and traditional restaurants. The efforts of these various organizations to reach a competitive advantage can lead businesses that fail to innovate to struggle. As such, Chipotle should observe its competition and develop responses to its actions as well as original initiatives.
The second crucial external factor would be brand awareness, with which the business struggles. Chipotle Mexican Grill (2018) highlights challenges related to past food safety incidents and lack of international reputation. The public may associate the brand with danger, which reduces its popularity and, therefore, revenue. Moreover, Chipotle is not a well-known company outside of the United States, especially when compared to competing businesses such as McDonald’s, which makes international expansion challenging. In the future, Chipotle will have to restore its reputation and increase its reputation if it plans to continue its expansion plans.
The final external factor that will be discussed is sustainability, in which Chipotle may have an advantageous position. Public interest in the topic is increasing, and companies that use unsustainable methods are viewed negatively. However, according to Villan (2017), Chipotle uses a broad range of sustainable practices, including innovative ones such as participation in the development of smart cities. The strict measures that it uses in its sourcing can be seen as an appropriate response to the food safety incidents, which can improve Chipotle’s reputation.
References
Chipotle Mexican Grill. (2018). 2017 annual report & proxy statement. Web.
David, F. R. (2017). Strategic management concepts and cases: A competitive advantage approach (16th ed.). Pearson.
Villan, W. J. (2017). Chipotle Mexican Grill Cooperating to the Development of Smart Cities. Business Management Dynamics, 6(9), 12-24.