International Marketing Strategies of Chipotle Mexican Grill

This report provides a comprehensive international marketing analysis of Chipotle Mexican Grill. It begins with an introduction to the company and its global presence, followed by a situation analysis using PESTEL and Porter's Five Forces frameworks to assess the external environment and competitive landscape. An internal environment analysis is conducted through Porter's Value Chain analysis. The report includes a SWOT analysis to evaluate the company's strengths, weaknesses, opportunities, and threats. Market attractiveness is evaluated using the 12C framework, and strategic options are explored via the Ansoff Matrix. The report further delves into market selection and entry strategies, marketing mix elements (product, price, place, promotion), and potential risk factors. It concludes with recommendations based on the analysis. The report examines the company's expansion strategies, pricing models, and market entry modes, providing a detailed overview of Chipotle's international marketing approach.

Running head: INTERNATIONAL MARKETING ANALYSIS
International Marketing Analysis of Chipotle Mexican Grill
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1INTERNATIONAL MARKETING ANALYSIS
Table of Contents
1. Introduction......................................................................................................................2
2. Situation Analysis............................................................................................................2
2.1. PESTEL Analysis.....................................................................................................2
2.2. Porters Five Forces Analysis....................................................................................3
3. Internal Environment Analysis........................................................................................4
3.1. Porters Value Chain Analysis...................................................................................4
4. SWOT Analysis...............................................................................................................5
5. Market Attractiveness- 12C Framework Analysis..........................................................6
6. Strategic Options- Ansoff Matrix Analysis.....................................................................7
7. Market Selection and Entry Strategy...............................................................................8
8. Marketing Mix.................................................................................................................8
9. Risk Factors...................................................................................................................10
10. Conclusion and Recommendations..............................................................................10
References..........................................................................................................................12

2INTERNATIONAL MARKETING ANALYSIS
1. Introduction
Chipotle Mexican Grill is an American chain of fast foods situated in US, Canada, France
and Germany. The food chain is specialised in making tacos and mission style burritos and this
food chain is situated in more than 2000 locations (Akaka, Vargo and Lusch 2013). International
marketing considers that a company is making more than one marketing mix decisions all
through national boundaries. The objective of this paper is to analyze international marketing
strategies and global market position of Chipotle Mexican Grill. The paper will also focus on
conducting internal environmental analysis, marketing mix, ansoff matrix and risk factors
evaluation of the selected company.
2. Situation Analysis
2.1. PESTEL Analysis
PEST analysis has a considerable role in explaining factors that pose operating challenges
for Chipotle Mexican Grill.

3INTERNATIONAL MARKETING ANALYSIS
Figure 1: PEST Analysis
(Source: Armstrong et al. 2015)
 Political- There is a threat of military invasion that is to be monitored by the restaurant
along with other political factors before entering a market that includes trade regulations
and tariffs associated with services, important employee benefits and industrial safety
regulations (Armstrong et al. 2015).
 Economical- The restaurant might use a nation’s economic factor like inflation, growth
rate and economic indicators of the industry like restaurant growth rate and consumer
spending in order to forecast growth trajectory. While operating in a nation, the food
chain must be aware of economic growth rate, education level within economy and
economic growth rate.
 Social- Shares beliefs and attitudes of consumer group have a considerable role in a way
the marketers of Chipotle Mexican Grill understand consumers of a particular market and

4INTERNATIONAL MARKETING ANALYSIS
the way they design promotional message for the consumers of the industry (Cavusgil et
al. 2014). The restaurant must consider skill level and demographics of population,
culture and leisure interests.
 Technological- Technological factors that are considered by the restaurant include
technological impact on product offering, technological diffusion rate and value chain
structure impact in service sector.
2.2. Porters Five Forces Analysis
Porter’s five forces analysis of Chipotle Mexican Grill will facilitate in analyzing its
competitiveness and position within the market.
Figure 2: Porters Five Forces Analysis
(Source: Armstrong et al. 2015)

5INTERNATIONAL MARKETING ANALYSIS
 Threat of new entrants- There are several alternatives for the restaurant in the market
that does not indicate the market is saturated and new entrants will not enter (Chipotle
2017). This threat is moderate for the restaurant as because of brand loyalty and image
the restaurant has competitive advantage over others.
 Threat of substitutes- Food has several substitutes in the market and Chipotle Mexican
Grill has substitutes in the market in the form of Taco Bell and the food chains that serve
food from all through the world. The restaurant faces high substitute’s threat despite
offering perfect combination of affordability and convenience.
 Bargaining power of suppliers- The restaurant has moderate bargaining power as the
suppliers tend to compete among themselves in consideration to quality and price
(Czinkota and Ronkainen 2013). Considering the same, the restaurant must be cautious in
selecting suppliers as they are vital in developing final product.
 Bargaining power of buyers- Buyers have high bargaining power for the restaurant as
the restaurant’s job is to retain and attract buyers as there are numerous restaurants that
address needs of quality and price of food with increased competition in the market (De
Mooij 2015).
 Industry rivalry- There is high industry rivals in the market in consideration to food
chains. As the restaurant is facing high rivalry in the industry from restaurants of
different cuisines. As the restaurant is facing losses it is thing to rebuild its brand image
through launching new marketing campaign.

6INTERNATIONAL MARKETING ANALYSIS
3. Internal Environment Analysis
3.1. Porters Value Chain Analysis
Value chain analysis is used to conduct internal evaluation of Chipotle Mexican Grill in
order to gain competitive advantages along with creating and sustaining effective performance.
Value chain serves as a tool of disaggregating a business in to strategically important activities
(Grant 2016). In case of Chipotle Mexican Grill, major value adding activities include inbound
logistics, outbound logistics, operations, sales and service along with marketing. Logistics
function of the restaurant is to purchase food in behalf of its franchisee along with arranging
delivery within restaurants. Logistics of Chipotle Mexican Grill include shipment and
procurement of raw materials to the suppliers, shipment and procurement of finished goods
among the distraction centres and suppliers along with warehousing at every distribution centre
(Kraus et al. 2016). This also includes delivery to restaurants to every food, packaging along
with operating supplies. In order to improve the logistics operation, the restaurant combines
several food processing plants focused on just operation.

7INTERNATIONAL MARKETING ANALYSIS
Figure 3: Value Chain Analysis
(Source: Armstrong et al. 2015)
Supporting activities of the restaurant can be considered as human resource development,
procurement and associated technology (Knight 2015). The restaurant uses electronic
procurement system and it had set logistics trend for the restaurants with online ordering process.
It was also observed that more around 12% of the restaurant’s franchises ordered food supplier
through electronic medium. Revamping the supply chain with technology and software made it
simple in responding effectively and quickly to needs of consumers. Training all staff is provided
to work in better manner that made the restaurant in gaining continuous consumer loyalty for
attaining competitive advantages.

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4. SWOT Analysis
Strengths
 A recognized brand in UK and Canada
 Online delivery and order facility
 Every restaurant is owned by the
company and is not franchised
 Strong presence with more than 1200
branch locations
Weaknesses
 Increased presence in Canada and US
 Limited items in the menu
 High priced menu because of organic
ingredient used
Opportunities
 Expansion within untapped nations and
regions
 Including new items within the menu
 Increasing trend of health
consciousness among consumers
Threats
 High competition among other business
rivals
 Changes in raw materials price
 Economic instability
5. Market Attractiveness- 12C Framework Analysis
12C framework serves as an analysis tool concerning international markets that considers
explaining twelve facts as explained under for Chipotle Mexican Grill:
 Country- France is situated in borderline of North Atlantic Ocean and its social
background is signified by an aging population along with increasing income inequality
(Majaro 2013).
 Culture- Ethnic composition considers Nordics and Mediterranean ethnic composition
and the major religion of people in the nation is Roman Catholic.

9INTERNATIONAL MARKETING ANALYSIS
 Concentration- The nation is spread across cities and certain autonomous regions.
Moreover, the big towns are situated in east and south coast with urban population
percentage of 77% among total population (Mathews et al. 2016).
 Consumption- The fast food market is threatened by substitutes from other fast food
joints with its annual growth rate increasing slowly.
 Choices- Competition among fast food chains is strong because of several direct
competitors that offer food for different consumer segments including children and health
conscious consumers.
 Commitment- Trade system of the nation does not encompass any quantitative
restrictions or vital licenses in order to trade with European Union member states other
than special products (Onkvisit and Shaw 2015).
 Contractual Obligations- Regulatory and legal framework in the nation is comparable
and transparent with other EU countries and is open to foreign investments.
 Channels- Easy access is provided to European and Latin American markets all across
its geographical locations. The nation also has well constructed infrastructure with
effective air, water and rail transportation.
 Currency- Currency of the nation is Euro with a considerable exchange rate and inflation
rate of France amounting to 4.5% in 2016 (Skarmeas, Zeriti and Baltas 2016).
 Capacity To Pay
 Communication- Media landscape in France does not have any specific regulations
which need to consider while operating in fast food market.
 Caveats- Four challenges might be faced by the market that includes low growth and
increased competition.

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6. Strategic Options- Ansoff Matrix Analysis
Ansoff matrix analysis of Chipotle Mexican Grill indicates that if the restaurant enters
new cities within France rather than Paris this can fall under its market expansion strategy
(Schmid, Grosche and Mayrhofer 2016). Moreover, if the restaurant expands their menus this
can serve as an effective market penetration strategy.
Figure 4: Ansoff Matrix Analysis
(Source: Armstrong et al. 2015)
From analyzing the Ansoff matrix of the food chain certain strategic options for success
of the business can be provided as described under:
 The restaurant must follow a market expansion strategy that can serve as a process of
proving service or product to a broader consumer segment of a present market or within a
new psychographic, geographic or demographic market

11INTERNATIONAL MARKETING ANALYSIS
 The restaurant must offer its products to young adults and teenagers and they are an
environment friendly generation and they are the major consumers of fast food.
Moreover, it should also use social media that can be one of the major sources of
Chipotle advertisement (Papadopoulos and Heslop 2014).
 The restaurant must enter new cities in order to have strong consumer network all
through the France and must also enter within an actual competition with different fast
food chains.
7. Market Selection and Entry Strategy
Chipotle Mexican Grill operates through franchisees all through the nations worldwide.
This market entry strategy offers the company a cheaper way of expansion within other nations
along with providing control over use of business operations and brands. In entering new
markets, the restaurant has decides to open a subsidiary which can franchise and operate every
outlet within the company’s territory (Papadopoulos and Heslop 2014). The level of investment
made by the restaurant is committed to these markers differs across such distinct modes.
However, in case of Chipotle Mexican Grill it is observed that it internationalizes expansion cost
to a great extent based on type of governance in every market and develops the expansion path in
and across several markets. The restaurant enters new markets through joint venture with local
partner or through master franchising agreement.
8. Marketing Mix
Marketing mix of Chipotle Mexican Grill is analyzed in order to evaluate the actions,
strategies or tactics employed by the restaurant for promoting is products or brand.