Effects of industry environment in Facebook and Chipotle

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Effectsof industry environment in Facebook and Chipotle

Theenvironment, in which a firm operates, has a significant impact ongrowth as well as its going concern. Some of the key aspects of theexternal environment should not ignore include the technological,economic, global, political-legal, and socio-cultural factors(larewaju 195). These factors can affect all types of organizationthat operate in industry environments, such as embryonic, fragmented,declining, or mature. The capacity of different businessorganizations, to succeed in various industry environments, dependson the types of strategies they adopt to enhance their competitiveadvantage. This implies that strategic planning is a key function ofthe management teams of the organizations operating in thecontemporary business environment. This paper will address thestrategic plans used by Facebook and Chipotle to enhance theircompetitive advantage.

Thekind of the industrial environment

Facebookis a U.S based public company that operates in the social mediaindustry. Currently, social media are a mature industry environment,which means that firms operating in the social media industry arepast the emerging and the growth phases of the organizational growth(Merrifield Consulting Group 1). The mature industry is characterizedby a decline or a slow growth in demand, which is currently the casefor Facebook subscription. Chipotle, on the other hand, operates in asaturated industry. Chipotle is a chain restaurant who operations aremainly based in Mexico, but it has branches in other countries, suchas the United States, France, United Kingdom, Canada, and Germany(Newman 1). The restaurant industry is saturated because there aremany firms operating in it, and there is not a single of them thatcan determine or influence the direction of the industry alone.

Strategiesfor protection and strengthening of the business model

Thesocial media industry is currently characterized by stiff competitionas a result of the entry of new social media sites into the industry.Facebook, which is one of the pioneers of the social media industry,manages this completion through the cutting edge innovation. Forexample, Facebook develops new user adds from time to time and allowthe existing as well as the new users to access these adds Ones (PtyLtd 1). This gives users a richer experience, thus increasing theirloyalty and attracting new users. Unlike other players in therestaurant industry who use traditional marketing strategies,Chipotle used in-house strategies to reach its customers. Chipotletargets millennial population as the primary consumers of itsproducts (Lukovitz 2). Chipotles management has achieved this byoffering remarkable products (including healthier and fleshier foodsthan competitors) and focusing on its primary market segment, whichthe millennial population.

Newstrategies for increase competitive advantage

AlthoughFacebook has managed to compete successfully in the market, there areother strategies it can use to enhance its competitiveness. Forexample, product differentiation can give the users of Facebookexperience that cannot be found in other social sites. This can beaccomplished through the development of new products, such asdiscussion groups where a group of users share their knowledge on agiven topic (Ukol 3). However, Facebook should keep on developing newproducts and differentiating the existing ones in order to avoiddirect competition with other players in the industry. Chipotle, onthe other hand, can use the pricing strategy to enhance itscompetitiveness. Selling its remarkable products at a lower price canattract more millennial customers, most of who could be unemployed orstill depending on their parents for a living. Chipotle can also makemarketing everyone’s role. For example, waiters can ensure thatthey deliver services and different products in the best interest ofthe clients in order to ensure that they return once and again (UMACSBusiness 1).

Competitiveadvantage in the future

Despitethe stiff competition that Facebook has been facing, its future ispromising and the competitive advantage is likely to increase.Currently, innovation is among the key drivers of the organizationalgrowth and development. In the case of social site, Facebook, thedevelopment of new ads that are made available to all users is partof the innovation that will help Facebook keep growing amidst thestiff competition. The competitive advantage of Chipotle, on theother hand, is at stake because there is a large number of a playerin the industry. This means that targeting the millennial marketsegment is not sufficient to maintain the competitive advantagebecause the competitors can easily copy this strategy and competesuccessfully with Chipotle.

Inconclusion, the industry environment determines the strategies thatorganizations should adopt to maintain their competitive advantage.Facebook and Chipotle operate in a different industry environment,which are mature and fragmented environments respectively. Inaddition, the two companies protect their business models usingdifferent strategies as dictated by their respective industries.Although the two companies have attained competitive advantage overthe years, they can secure their going concern by adopting newstrategies, such as product differentiation and pricing strategies.The future competitiveness of Facebook is more secure than Chipotlegiven that Facebook’s competitive strategies are more relevant tothe contemporary business environment.

Workscited

Larewaju,A. Impacts of external business environment on organizationalperformance in the food and beverage industry. BritishJournal of Arts and Social Science6.2 (2012): 2046-9578.

Lukovitz,K. Chipotleleads QSRs in millennial loyalty.New York, NY: Media Post Communications, 2014. Web.

MerrifieldConsulting Group. Competing in mature industry. MerrifieldConsulting Group Incorporation.January 1. 2015. Web. January 11 2015.

Newman,C. Chipotleopens restaurants in London its first in EU.Denver, CO: Denver Business Journal, 2014.

OnesPty Ltd. Does Facebook have a competitive advantage? OnesPty Ltd.2014. Web. January 11 2015.

UMACSBusiness. Improvingyour competitiveness.Victoria: UMACS Business solution, 2012.

Ukol,N. Facebook: Opportunities and challenges. UKOLN.2012. Web. January 11 2015.