6 and CMGs recent battles with EColi will surely create a negative mindset for

6 and cmgs recent battles with ecoli will surely

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increasing (Friedman & Roeder, 2012, p. 6) and CMG’s recent battles with E.Coli will surely create a negative mindset for customers and health conscious individuals. Consumers of fast-casual eateries do seek affordable and convenient meals, but at the same time care more about the origin and preparation of the food also (Friedman & Roeder, 2012, p. 6). Which will help CMG gain their footing back as the company also cares about the origin of the food, just like consumers do. Because the main ingredient or inputs into products for restaurants are food, commodity prices create a high dependence for companies like CMG (Friedman & Roeder, 2012, p. 6). Fortunately, increased prices of one commodity food group may be offset by an opposite move for another commodity group (Friedman & Roeder, 2012, p. 6). It is difficult to predict commodity prices though and “increasing global demand has caused commodity prices to increase on average, and this squeezes margins for the industry as a whole” (Friedman & Roeder, 2012, p. 6). It has been suggested that those companies who are able to leverage their brand equity to increase prices without losing business will be better able to withstand rising commodity prices (Friedman & Roeder, 2012, p. 6). Competition is a variable when looking at fast casual eateries whose competition is based mainly on price, location, variety, brand and service (Friedman & Roeder, 2012, p. 7). Effective marketing and franchising is another way for these fast casual restaurants to with stand the ebbs and flows of business. By 2010, franchised and multi-establishment companies accounted for 65% of industry revenues, while only accounting for ~10% of total establishments (CMG operates as a multi-establishment) (Friedman & Roeder, 2012, p. 7).
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On a whole, CMG has many factors working in their favor when looking at the industry and environment as a whole and while there are areas of concern (E. Coli and costs of their ingredients), consumer preferences lean towards the product that CMG seeks to offer. Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (1999). Strategic management: Competitiveness and globalization : concepts and cases . Cincinnati, Ohio: South-Western College Pub. Friedman, J. & Roeder, J. (2012). Chipotle Mexican Grill . University of Oregon Investment Group.
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