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Opportunities:Build long-term contracts with suppliersCreate competitive advantage over rival companiesIncrease in speed of serviceThreats:Closely related substitute products Speed of service in comparison with fast-food marketNew fast-casual restaurant enteringThe Five Forces Analysis reveals how multiple moderate-to-high threats within the industry can create a hostile battle between competing businesses. The industry has a low barrier to entry, but sustaining oneself against competitors like Chipotle, Moe’s, and Qdoba would be rather difficult.Appendix D: Driving ForcesCustomer PreferencesThe increase in health-conscious consumers has re-shaped the food industry. Businesses that fail to follow the preferences of their customers tend to lose them. By providing a wide range of food options, companies have attracted new demographics. When Chipotle introduced tofu to their menu and ensured their meats were cruelty-free, they welcomed a new crowd of vegan customers. Restaurant AtmosphereMany fast-casual restaurants construct their store layout intentionally in a way to create a friendly atmosphere. By offering an “open kitchen design”, businesses show that they are not hiding anything they do when preparing customers’ meals. This transparent design is built in each of the three leading fast-casual Mexican restaurants. Technological Change Advances in technology have made it easier for customers to have their orders ready for pick up or delivered. This also decreases long lines and helps employees be able to keep customers happy due to quick service. Opportunities:Application for orderingMore options for customers with dietary restrictionsThreats:Open kitchen design can also allow customers to see any flaws in the processWide variety of food can be costlyThese Driving Forces reveal the risks of cost vs. quality. While some factors may appear profitable, they can also be expensive. The use of organic food can increase sales, but the cost of the produce from suppliers may exceed these benefits. 7
Appendix E: Strategic Group MapOpportunities:Increase geographic coverage (domestically and internationally)Differentiation of products and qualityThreats:Similar substitutes (burritos, salads, tacos, bowls) The fast-casual Mexican food industry is comprised of 3 major competitors: Chipotle, Moe’s, and Qdoba. Taco Bell is incorporated into this competition due to their similarity in products and target demographics. Companies like Chipotle and Taco Bell take advantage of having a larger market, but Chipotle is viewed as a higher cost restaurant. Appendix F: Key Success FactorsKey Success FactorsAdvantageCost EfficiencyLowering development and occupancy costs = decreased average cost of building a new restaurant“A Model” designs realize lower costsSpecific regions require higher real estate pricingLocationSite selection involves studying and evaluating an area before implementing the constructionReview of demographic data, population size, traffic, parking, visible