Chipotle Restaurant and the Myers Corporation - Case Study Example

Contemporary organization assessment Author’s name Institutional affiliation Contemporary organization assessment Introduction Strategic management is one of the fundamental prerequisites of any organization seeking success. Owing to this fact, each and every organization should be able to analyses its competitive effectiveness, the risks involved, its business environment and the necessary sources of competitive advantage (Knemeyer et al., 2015, 302). Using two case studies of Chipotle restaurant and the Myers Corporation, this paper will explain and analyses the external business environment, the five forces of competition and the sources of completive advantage Terminologies External business environment basically refers to the macro-environmental factors that affect the business operations (Liu et al., 2015, 108). By way of example, the external environment of a business comprises of the political factors, economic, legal, social, environmental and technological factors Five competitive forces refer fundamentally to the porter’s stipulated assessment that enables an organization to realize its present position as far as competition is concerned. The five forces include the power of buyers, power of suppliers, threat of substitutes, threat of new entrants and the threat of substitutes (Huang, 2013, 554). Sources of sustainable advantage are the cost leadership strategies, differentiation and segmentation strategies that are employed by a company in order to realize competitive advantage (Knemeyer et al., 2015, 302. In order for a firm to compete effectively with other organizations, it should address their cost strategy, differentiation and technological strategy so as to produce acceptable and high quality products. Case Study Firms analysis External Business environment The Macro-analysis or rather external business environment assessment is sometimes referred to as PESTEL analysis. In this case, the external environment of any business organization comprises of social factors, political factors, economic factors, legal factors and technological factors (Liu et al., 2015, 108). Political factors The organization’s business operations are basically influenced by the state and government policies. By so saying, it means that Chipotle restaurant and the Myers Corporation entire operation are also governed or rather under the control of state regulations and rules (Liu et al., 2015, 108). One of the fundamental reasons why the governed regulates and controls Chipotle restaurant is because of issues like operation license, health issues, employee laws as well as tax issues (Huang, 2013, 554).. Both Myers Corporation and Chipotle restaurant follows to the latter the policies and laws stipulated by the local government and foreign investment rules and policies most especially on its renowned franchise business strategy. By so doing, any form of political instability will act as a major blow on Chipotle restaurant business operation as well as the Myers retail store corporation Economic factors It is universally recognized that economic factors often arise as one of the primary issues of any organization’s business operations. For instance, most of the organizations were heavily hit by the 2008 economic slowdown. By so saying it means that, any form of economic crisis, will in one way or the other influence the way an organization conducts its business dealings. In this case, Chipotle restaurant is faced by a number of economic challenges which basically revolves around the difference in the tax and revenue measurement scale in different countries of operation (Liu et al., 2015, 108). Moreover, the monetary and currency fluctuations also affect the distribution channel of Myers Corporation. Furthermore, the local economy also plays a crucial part in the day to day operation of both Chipotle restaurant and the Myers business corporation. In other words, if the state of the local economy is wanting or rather critical, individuals remain conservative and they in most cases refuse to spend more money on food franchises and luxury items. As result, the daily operations of Chipotle restaurant and the Myers corporation store are affected tremendously (Liu et al., 2015, 108). Social factors The nature and the standards of living of individuals are being revolutionized and this shift in demand for change is affecting organizations operations tremendously (Li et al, 2015, 200). In this case, individuals in this 21st century generation expect a more elegant and high quality services coupled with the latest technological trends from a hospitality organization such as the Chipotle restaurant. Additionally, this changing demand trends are as well different from region to region. For instance, the Muslims avoid pork whereas the Hindu people have a great love for vegetables (Knemeyer et al., 2015, 302). Therefore, in order to satisfy all the customer requirements, Chipotle restaurant and Myers Corporation have set up well-stipulated goods and services catalogues based on research. Technological factors It is universally believed that the impact of technological innovations is one of the major considerable measures necessary to meet consumer expectations (Knemeyer et al., 2015, 302). In this case, as other food stores such as Pizza Hut and KFC compete with each other in the market, Chipotle restaurant has ensured the availability of all the technological access that may influence customers prompting customer loyalty (Liu et al., 2015, 108). In the case of Myers, it has established Quick and easy payment devices, speedy and modern distribution channels, wireless internet, customer entertainment equipment that ensures that its service delivery is on point so as to continue its business growth. Environmental factors Chipotle restaurant is often criticized for employing non-biodegradable substances which are harmful elements for its food service cups and plates. Additionally, Styrofoam tumblers and containers are as well employed in Chipotle restaurant food store for meals against the environmental principles. However, for the greater better benefit of the environment, Myers Corporation was advised by the environmentalists before commencement of their operation to be in the know about the dangers posed by polystyrene and the non-biodegradable materials (Huang, 2013, 554).. Legal factors Each and every organization is mandated to follow and obey some regulations and rules in order to run its business operations well. For instance, stuff laws, registration. Taxes and safety rules are some of the procedures and rules that a company must follow (Vecchiato, 2015, 263). For instance, in most Muslim nations, it is of great significance to have an authorization from Halal and in this case, Chipotle restaurant should see to it that they take note of the consumer’s belief on food authorization. Therefore, in simple words, Myers corporation store and the Chipotle restaurant obey the legal process, for the benefit of the whole society as well as the company (Knemeyer et al., 2015, 302). Therefore, as a renowned restaurant Chipotle should at all times see to it that all the legal laws and procedures are obeyed. Five force analysis Threat of new entrants If the new entrants have a considerable brand name, the net revenues and the existing market value of the company in existence will be greatly affected (Li et al, 2015, 200). In this case, if DJ happens to establish another food store in an area where Myers corporation store is already operating, it will hinder and deteriorate some market value for Myers (Weber et al, 2015, 35). The same case applies to the Chipotle; if MacDonald’s happens to establish a fast food store where Chipotle is operating. However, it is also difficult to establish a very good location to establish a new business entrant. Power of suppliers Since any company requires raw materials for its products and raw materials in most cases are delivered by suppliers, the company depends therefore entirely on the suppliers (Li et al, 2015, 199). Owing to this, both the Chipotle restaurant and the Myers have ensured that the nature of the existing relationship with the suppliers is in such a way that it does not affect the company’s operation (Stroh, 2015, 101). Buyer’s power The buyer’s power in restaurants and food stores is played by the customers. By so saying, it means that, customers have the power to spend their money the way they want for whichever good they wish (Fotr et al., 2015, 97). In this case, most of them chose better quality products, standard service coupled with cheap prices (Weber et al, 2015, 33). Therefore, both Chipotle restaurant and Myers try to provide outstanding service in an effort to have and attract a maximum number of consumers from the competitive market (McMillan, 2010, 15) Threat of substitutes If the product of the retail store is easy to substitute, then it may affect the companies operation tremendously (Nyuur, 2015, 237). In this care, if other food stores can as well produce food stuffs just like Chipotle restaurant then the net revenues of Chipotle restaurant would be affected. In this case therefore, Chipotle restaurant has ensured that its products are made with effectiveness and sustainability that has ensured its specialty with its customers (Huang et al., 2013, 554). Moreover, Myers has stipulated a policy that ensures that its products are uniquely differentiated in the product market. Threat of rivalries The competitive nature and position of any company revolves around the power of its competing firms and the number of its competitors (Ibarreche, 2015, 237). The main competitors of Chipotle restaurant are local producing restaurants such as Pizza Hut and some other multinational corporations like MacDonald’s and Subway while the main competing threat of Myers is DJ. Chipotle restaurant has ensured that it remains a step ahead by taking competition as one of their sole missions in order to achieve their desired destination (Tiers, 2013, 46). Myers on the other hand has engaged in focused cost leadership by producing goods and services at acceptable price levels (Hannigan et al, 2015, 155). Sources of competitive advantage of MacDonald’s The most common sources of competitive advantage that are possessed by both the Chipotle restaurant and the Myers corporation store revolve around its cost leadership and differentiation strategies. By so saying, it means that, Chipotle restaurant has ensured that, its product prices are lower as compared to other local restaurants such as Pizza Inn and Pizza Hut (Chenchen et al., 2015, 554). Additionally, Chipotle restaurant makes food products targeting mainly the youth, children and most especially the young urban families. Moreover, since it is operating locally, it encourages production of food based on culture (Tiers, 2013, 47). Myers on the other hand possesses the ability to differentiate its product in a unique way and in the process, command a premium price value (Schaan, 2015). Furthermore, its products are made with high quality and in the process; it allows Myers Corporation Store to get engaged in more valued business activities than other competing firms. In other words, its products are made in such a way that consumers deem acceptable. Conclusion Most hospitality organizations and retail stores just like any other organizations are closely interrelated with their consumers (Huang, 2013, 554). In this case, each and every organization should set up its business strategy in such a way that it is able to meet customer expectations while at the same time achieving their organization goals and objectives (Tiers, 2013, 53). By so saying, it means that, business environment and the competing forces should be evaluated and analyzed well by an organization before and during its business operation in order to realize its objectives. A successful organization is one that has a good business strategy. References Chenchen; Huang, O'Brien, Kathleen M, (2015).The Impacts of Perceived Environmental Uncertainty, Outlook, and Size on Strategic Planning in Private Clubs: Journal of Hospitality Marketing & Management.24.5 (2015): 554. 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