1. S. W. O. T. ANALYSIS
STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS
CHIPOTLE MEXICAN GRILL
Steve Greene
Principles of Management 101-140
Mr. Ron Hoffman, Instructor
Greenville Technical College
July 25, 2016

2. PRESENTATION OUTLINE
 Business Overview
 Chipotle Strategic Management
 3 Strengths
 3 Weaknesses
 3 Opportunities
 3 Threats
 Do Strengths Outweigh Weaknesses? Do Opportunities Outweigh Threats?
 2 Short-term Business Strategies
 3 Personal Observations

3. CHIPOTLE BUSINESS OVERVIEW
 Chain of about 2000 fast-casual Mexican food restaurants.
 Cafeteria style design, limited order selections.
 Started in 1993. 100% ownership. No franchises.
 Successful store growth. Good profit margins. Huge market share.
 Fulfills public interest in healthy food, sustainable agriculture, and animal welfare.
 Recovering from 2015 food contamination outbreaks.

4. STRATEGIC MANAGEMENT
Mission Statement
Vision Statement
Grand Strategy - Defensive

5. THREE STRENGTHS
 Good Financial Strength.
- Strong balance sheet
 Customer experience and food order personalization.
- Made by you
 Throughput efficiencies.
- “Four Pillars of Great Throughput.”

6. THREE WEAKNESSES
 Not Franchising.
- Incurred all of the 2015 sales shortfalls.
 Limited Supply Chain.
- Small farms had challenges ensuring optimal food safety conditions.
- Limited number of qualifying suppliers lowers Chipotle pricing power.
 Dependence on the U.S. Market.
- U.S. consumer discretionary spending

7. THREE OPPORTUNITIES
 Sales growth of the fast-casual restaurants.
- Over 11% increase in 2015
 U.S. Demographics.
- “Generation Y” and Hispanic demographics.
 Diversification.
- More Menu Choices
- Sister Restaurants

8. THREE THREATS
 Public Perception.
- More outbreak cases could ruin perceptions of Chipotle food quality.
 Stronger competition in the fast-casual category.
- June 2016 Harris Poll.
 Increased Sales Promotions.
- Food discounts and advertising campaigns needed to regain customer trust.

9. DO STRENGTHS OUTWEIGH THE WEAKNESSES? YES.
 2015 revenue and earnings growth, 10% and 7% respectively.
 First-mover advantage from 1993 still creates barriers for competition.
 Improving food safety procedures in its stores and supply chains.

10. DO OPPORTUNITIES OUTWEIGH THREATS? YES.
 Extensive sales promotions are bringing loyal customers back.
 Similar restaurants bounced back from worse contamination cases.
 Wall Street analyst positive ratings. Sequoia Capital’s July 2016 investment.

11. Strategies to help Chipotle further succeed in the short term. First of two.
 Spending $10 million in 2016 to help its smaller food suppliers ensure safer foods. Spend more.
 Make thorough specifications of qualifying foods in long-term contracts with existing suppliers.
 Keep up barriers making it more challenging to compete on a differentiated niche.
1) Continue to strengthen supplier relationships.
Michael Porter’s Differentiation Strategy.
A business strategy to offer products or services that are of a unique and superior value
compared to those of competitors, but to target a wide market.

12. Strategies to help Chipotle further succeed in the short term.
2) Further improve food safety program.
 Use more DNA testing to identify harmful bacteria.
 Thoroughly train its employees on food safety.
 Further centralize food preparations to gain greater process control.
 More actively oversee the operations for preparing and cooking of pork, chicken, and steak.

13. Three Observations on Completing this S.W.O.T. Analysis.
 No news is good news.
 Inspect what you expect.
 Consider franchising.

14. Conclusion and Questions

15. Presentation Sources:
SWOT Analysis: Chipotle Mexican Grill, Inc.
Value Line. Written be Jason Dalavagas
February 22, 2016
http://valueline.com/Stocks/Highlights/SWOT_Analysis__Chipotle_Mexican_Grill,_Inc_.aspx#.V3QJ0zHOezl
Chipotle Mexican Grill
Wikipedia, the free encyclopedia
Numerous contributors with many contributions in 2015
https://en.wikipedia.org/wiki/Chipotle_Mexican_Grill
CDC Rejects Chipotle's Contention That The Center Botched the E. Coli Crisis
Newsmax of Bloomberg News. No author listed.
May 6, 2016
http://www.newsmax.com/US/CDC-rejects-chipotle-contention/2016/05/06/id/727637/
Chipotle Dethroned as America's Favorite Tex-Mex Brand.
CNNMoney. Written by Aaron Smith
June 10, 2016
http://money.cnn.com/2016/06/10/news/companies/chipotle-mexican-food-rank/index.html
Chipotle Still Hasn't Answered One Question about the Business — And it Could Mean Doom for the Company.
Business Insider. Written by Hayley Peterson
June 13, 2016
http://www.businessinsider.com/chipotle-recovery-update-2016-6
Chipotle's Tipping Point for the Natural and Organic Food Industry.
CNBC. Presented by Jim Cramer
June 16, 2016
http://www.cnbc.com/2016/06/16/