Chipotle: Customer Power In The Fast Food Industry

Companies like Chipotle require raw material to make the products they offer to their customers. This is where supplier power is created, if a company works with multiple suppliers then their suppliers have little or no power this is because it would be unexpansive to switch suppliers. When a company works with limited suppliers they have a higher supplier power because of how expensive it would cost them to switch supplier at this point the supplier also has the power to raise prices to capture some of the industry’s profits. Most restaurants get their supplies from different suppliers so for the most part supplier power is week within the industry, unless you are chipotle. Chipotle uses organic produce and free-range and antibiotic-free meats which requires them to work with a few selected suppliers which increases its supplier power. When it comes to the fast food industry which Chipotle plays a part in, Customer Power is a very important aspect of the industry. If customer power is strong, the customer has the power to set the price to what they would like to pay for the product. Customers in the fast food industry demand an experience which is unique and they also demand high quality food. They have the mentality of the customer is always right. This is why when setting prices Chipotle and other restaurants have to be

Usually fast food restaurants like Chipotle do not have to compete against one another this is because usually a check at a fast food restaurant will range from $7-$11, which means that if the restaurants stay within this price range they are most likely to not lose any customers. Chipotles tread of substitute products does not directly come from other fast food restaurants rather the substitute products would be a sit down restaurant, or the customer deciding to eat at