Restaurant industry is much differentiated and highly competitive. Each restaurant tries to differentiate their products in order to gain market share and capitalize the market. The growth of the industry is very high since there are new restaurants opening every day offering different products such as Chinese, Italian or Mexican food. The major characteristic of the industry is the supply/demand conditions. High quality foods such as the ones Chipotle offers cost more due to the limited supply and high demand. What makes Chipotle a leader in the industry is its ability to offer high quality products at a lower price than those of the competitors providing a competitive advantage and gaining market share. Threat of substitutes is high due to many different choices that customers have along with the fact that customers usually don’t have a strong loyalty for one restaurant and prefer variety when it comes to food. Bargaining power of suppliers poses a low threat in the industry but a high threat to Chipotle due to the fact that organic food suppliers can set their own prices due to low competition and high demand which will cause a problem for Chipotle in the long-run. …show more content…
Bargaining power of buyers is high as there are many substitutes readily available and preferences tend to change over time. Rivalry amongst competitors is strong since there are so many different fast food restaurants, sit-down restaurants, stores like WholeFoods Market etc available to the consumers with similar or completely different menus. Chipotle’s main competitors are Qdoba, Moe’s Southwest Grill and Taco Bell which all offer Mexican food, mostly organic with the same menus as Chipotle targeting the same