Question

Can anyone do a Pestle Analysis of Chipotle ? Opportunities and threats of each category ?

Answer 1

Pestle Analysis of Chipotle:

Chipotle is a brand name operating in the chain of restaurants across the world and has its market in dozens of countries and serve millions of people. It is also exposed to the external environment and hence it is important to conduct a PESTLE analysis for the same:

Political (P): the company faces number of political instability which also affects its way of doing the business. Some of the political forces affecting the business are:

• The level of bureaucracy and interference of the Government into its business from time to time.
• The issuance of Anti- trust laws by the government also sometimes act against the restaurant and its workings.
• The intellectual property protection rules and regulations framed by the government and frequent changes made in it.
• The changes made to the mandatory employee benefits to be provided to the employees by the restaurant industry also affects the workings.

Economic (E): there are number of unstable economic forces also that influence how the company will operate and how well will it function and earn. Some of the economic factors affecting the business are:

• The instability in the exchange rates and in the financial markets also influence the workings of the business.
• The phase of the business cycle in which the economy is operating also affects all the industries working under the economy.
• The growth rate of the economy influences how well the company will operate and earn the profits.
• The rate of inflation in the economy affects the prices to be charged from the customers and the overall working of the company.

Social (S): the culture of the society in which the business is operating also influences the working and the operating functions of the business. Some of the social factors that affect the business and its operations are:

• The level of education of the society where the company offers its products is of grave importance for deciding the working of Chipotle.
• The culture of the place and the locality where it is set up also influences the workings and earnings of Chipotle.
• The entrepreneurial spirit of the society and how cooperative are the society members also influences the workings of Chipotle.

Technological (T): technology plays a very important role in the working and development of the business and decides how well it will face the competition and survive in the market. Some of the technological factors affecting the business are:

• The rate at which the technology is diffused with each other in the market decided how strongly the company will operate.
• The recent technological developments made by Chipotle's rivals in the market influences the workings of the company.
• The impact of the value chain structure of Chipotle in the service sector influences the workings and its operations.

Environmental (E): the business when operates in the market has to abide by certain environmental rules and regulations and also look at the welfare and protection of the environment. Following are some of the environmental factors such as:

• The changes made to the laws and standards related to the environment and its protection influence the business and its workings.
• The waste management strategies followed by Chipotle also influences how well it will run its business.
• The attitude of Chipotle towards the support of the renewable energy influences the workings of the business.
• The changes made by the air and water pollution regulations will affect Chipotle and its business to a great extent.

Legal (L): the legal framework and the actions taken by the legal authorities is responsible for how well the business will function and face the competition in the external environment. Following are some of the legal forces influencing the business and its functions:

• The laws relating to copyright issues and intellectual property rights influence Chipotle and its workings.
• The laws relating to the environment and its protection is responsible for the working of the business to a large extent.
• The health and safety laws framed by the government influences Chipotle and its workings.
• The formulation of the anti- trust laws in Restaurant industry and all across the country influences Chipotle and its workings.