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Chipotle Mexican Grill (CMG) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Chipotle Mexican Grill (United States)


Based on various researches at Oak Spring University , Chipotle Mexican Grill is operating in a macro-environment that has been destablized by – increasing energy prices, supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, increasing household debt because of falling income levels, there is backlash against globalization, etc



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Introduction to SWOT Analysis of Chipotle Mexican Grill


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chipotle Mexican Grill can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chipotle Mexican Grill, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chipotle Mexican Grill operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.




SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix


SWOT analysis of Chipotle Mexican Grill can be done for the following purposes –
1. Strategic planning of Chipotle Mexican Grill
2. Improving business portfolio management of Chipotle Mexican Grill
3. Assessing feasibility of the new initiative in United States
4. Making a Restaurants sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chipotle Mexican Grill




Strengths of Chipotle Mexican Grill | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Chipotle Mexican Grill are -

High brand equity

– Chipotle Mexican Grill has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chipotle Mexican Grill to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Successful track record of launching new products

– Chipotle Mexican Grill has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chipotle Mexican Grill has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.

Strong track record of project management in the Restaurants industry

– Chipotle Mexican Grill is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Digital Transformation in Restaurants industry

- digital transformation varies from industry to industry. For Chipotle Mexican Grill digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chipotle Mexican Grill has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Highly skilled collaborators

– Chipotle Mexican Grill has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Restaurants industry. Secondly the value chain collaborators of Chipotle Mexican Grill have helped the firm to develop new products and bring them quickly to the marketplace.

Superior customer experience

– The customer experience strategy of Chipotle Mexican Grill in Restaurants industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Analytics focus

– Chipotle Mexican Grill is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Restaurants industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

High switching costs

– The high switching costs that Chipotle Mexican Grill has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Diverse revenue streams

– Chipotle Mexican Grill is present in almost all the verticals within the Restaurants industry. This has provided Chipotle Mexican Grill a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.

Training and development

– Chipotle Mexican Grill has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Organizational Resilience of Chipotle Mexican Grill

– The covid-19 pandemic has put organizational resilience at the centre of everthing Chipotle Mexican Grill does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Sustainable margins compare to other players in Restaurants industry

– Chipotle Mexican Grill has clearly differentiated products in the market place. This has enabled Chipotle Mexican Grill to fetch slight price premium compare to the competitors in the Restaurants industry. The sustainable margins have also helped Chipotle Mexican Grill to invest into research and development (R&D) and innovation.






Weaknesses of Chipotle Mexican Grill | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Chipotle Mexican Grill are -

Increasing silos among functional specialists

– The organizational structure of Chipotle Mexican Grill is dominated by functional specialists. It is not different from other players in the Restaurants industry, but Chipotle Mexican Grill needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chipotle Mexican Grill to focus more on services in the Restaurants industry rather than just following the product oriented approach.

Low market penetration in new markets

– Outside its home market of United States, Chipotle Mexican Grill needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High bargaining power of channel partners in Restaurants industry

– because of the regulatory requirements in United States, Chipotle Mexican Grill is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Restaurants industry.

High dependence on Chipotle Mexican Grill ‘s star products

– The top 2 products and services of Chipotle Mexican Grill still accounts for major business revenue. This dependence on star products in Restaurants industry has resulted into insufficient focus on developing new products, even though Chipotle Mexican Grill has relatively successful track record of launching new products.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chipotle Mexican Grill is slow explore the new channels of communication. These new channels of communication can help Chipotle Mexican Grill to provide better information regarding Restaurants products and services. It can also build an online community to further reach out to potential customers.

Employees’ less understanding of Chipotle Mexican Grill strategy

– From the outside it seems that the employees of Chipotle Mexican Grill don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

Ability to respond to the competition

– As the decision making is very deliberative at Chipotle Mexican Grill, in the dynamic environment of Restaurants industry it has struggled to respond to the nimble upstart competition. Chipotle Mexican Grill has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Chipotle Mexican Grill supply chain. Even after few cautionary changes, Chipotle Mexican Grill is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chipotle Mexican Grill vulnerable to further global disruptions in South East Asia.

No frontier risks strategy

– From the 10K / annual statement of Chipotle Mexican Grill, it seems that company is thinking out the frontier risks that can impact Restaurants industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

Skills based hiring in Restaurants industry

– The stress on hiring functional specialists at Chipotle Mexican Grill has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Interest costs

– Compare to the competition, Chipotle Mexican Grill has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.




Chipotle Mexican Grill Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of Chipotle Mexican Grill are -

Low interest rates

– Even though inflation is raising its head in most developed economies, Chipotle Mexican Grill can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Restaurants industry, but it has also influenced the consumer preferences. Chipotle Mexican Grill can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Use of Bitcoin and other crypto currencies for transactions in Restaurants industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chipotle Mexican Grill in the Restaurants industry. Now Chipotle Mexican Grill can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chipotle Mexican Grill to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Chipotle Mexican Grill to hire the very best people irrespective of their geographical location.

Manufacturing automation

– Chipotle Mexican Grill can use the latest technology developments to improve its manufacturing and designing process in Restaurants sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Chipotle Mexican Grill can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Chipotle Mexican Grill to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Better consumer reach

– The expansion of the 5G network will help Chipotle Mexican Grill to increase its market reach. Chipotle Mexican Grill will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Chipotle Mexican Grill can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chipotle Mexican Grill can use these opportunities to build new business models that can help the communities that Chipotle Mexican Grill operates in. Secondly it can use opportunities from government spending in Restaurants sector.

Building a culture of innovation

– managers at Chipotle Mexican Grill can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Restaurants industry.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Chipotle Mexican Grill to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Learning at scale

– Online learning technologies has now opened space for Chipotle Mexican Grill to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Buying journey improvements

– Chipotle Mexican Grill can improve the customer journey of consumers in the Restaurants industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.




Threats Chipotle Mexican Grill External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of Chipotle Mexican Grill are -

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Chipotle Mexican Grill.

Regulatory challenges

– Chipotle Mexican Grill needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Restaurants industry regulations.

Technology acceleration in Forth Industrial Revolution

– Chipotle Mexican Grill has witnessed rapid integration of technology during Covid-19 in the Restaurants industry. As one of the leading players in the industry, Chipotle Mexican Grill needs to keep up with the evolution of technology in the Restaurants sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

Easy access to finance

– Easy access to finance in Restaurants industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chipotle Mexican Grill can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Chipotle Mexican Grill in the Restaurants sector and impact the bottomline of the organization.

Consumer confidence and its impact on Chipotle Mexican Grill demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Restaurants industry and other sectors.

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Chipotle Mexican Grill will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Chipotle Mexican Grill can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Chipotle Mexican Grill prominent markets.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Chipotle Mexican Grill business can come under increasing regulations regarding data privacy, data security, etc.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

Stagnating economy with rate increase

– Chipotle Mexican Grill can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Restaurants industry.

Increasing wage structure of Chipotle Mexican Grill

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Chipotle Mexican Grill.




Weighted SWOT Analysis of Chipotle Mexican Grill Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chipotle Mexican Grill needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of Chipotle Mexican Grill is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of Chipotle Mexican Grill is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Chipotle Mexican Grill to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Chipotle Mexican Grill needs to make to build a sustainable competitive advantage.



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