Chili's SWOT Analysis: Assessing Competition and Opportunities

In the decision making process, it helps to look at all the information. This SWOT is comparing Chili’s restaurant to two of its competitors, Ruby Tuesday’s and Applebee’s. Company History Chili’s restaurants are part of the company, Brinker International Corporation. Chili’s Bar & Grill is a casual dining restaurant that was founded in 1975 and has expanded to include 1,200 restaurants located domestically and internationally.

There menu consists of fresh and healthy American dishes and limited amount of southwestern style Mexican dishes.

In the last 30 years, Chili’s has created an identifiable, recognizable brand name, just think of the commercials. Chili’s Strengths Chili’s is the one of the largest full service restaurant chains with over 1,200 stores, second only to Applebee’s which has about 1,900 stores. Their competitor Ruby Tuesday has less than 900 stores with many of those franchises. Chili’s is part of Brinker Intl. , which is world’s second largest casual dining restaurant operator, the first being Darden restaurants.

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This allows them to offer affordable prices, because they can negotiate product rates for all of their stores, unlike a smaller company. They have also expanded their company to include Chili’s Too, Small Town Chili’s, and offer catering services. They update their menu one to two times a year, unlike Ruby Tuesday’s which updates their menu every three to four months. Chili’s has a popular menu that keeps people coming back, so they tweak it a bit to keep up with trends, but keep their core items.

At this time they serve the same menu in every store, which allows for consistency throughout the company.

They have a very broad market with a recognizable brand name and they focus on customer satisfaction. The restaurant business can be very competitive, but they have unusually high management retention and that may be in part to extremely competitive starting salaries and excellent benefit packages. Their competitor, Ruby Tuesday, has franchised many of its stores, creating varied salaries, salary caps, and benefits, when going from a franchise to a corporate store, which can make it difficult to retain managers.

When Chili’s is looking for hourly employees, it offers several opportunities to them. They can apply and interview online, receive benefits and have the opportunity to grow with the company. Their hourly employee turnover rate is also lower than the industry average. Chili’s Weaknesses Even though the Chili’s brand is recognizable, it doesn’t appeal to the upper class. The casual dining concept, no matter how different, is still the same. They receive much of their food frozen, unlike Ruby Tuesday which receives all of their meat and produce fresh, making some items not the best of quality.

During the busy times, servers are pressured to decrease their table turn time, the time from when a guest sits at the table until they leave and the table is ready for another guest, which can make it difficult to build a rapport with their guests, but at the same time they want their PPA (per person average) to be higher. Many of their restaurants are focused around the bar, which segregates some consumers that do not want to be in that environment. It also makes their seating area than some of their competitors. Chili’s Opportunities

There are several things Chili’s can do to remain competitive in the casual dining industry. They can continue to expand internationally, beyond the 20 countries they are already in. Their competitors have yet to exceed that with Ruby Tuesday’s being in about twelve countries and Applebee’s is in almost twenty. They have a very well known brand which will allow them to continue expansion at a rapid rate with the backing of their parent company, Brinker Intl. They are launching a program to try international cuisines at some of their foreign locations.

If consumers react positively this could be a great growth opportunity, if it is not taken to, it could be a threat to their international stores if they continue it. They can enlarge their restaurants or configure different models, based on the demographics of the area, to include more seating for guests and not just the bar area. They can continue to expand their brand recognition apparel and glassware. Chili’s Threats The largest threat to the Chili’s brand is the competition of casual dining restaurants, which are easy to duplicate. Applebee’s and Ruby Tuesday’s both had higher 1-year sales growths, with 10% and 17. %, respectively, compared to Chili’s at 6. 1%.

Chili’s saturated some U. S. markets and has no where else to expand in those areas. They need to keep up with current trends and eating habits, because they change often, to stay current with the market. Summary Chili’s has managed to saturate the US and foreign markets better than its competitors. Their sales are higher and they retain their employees longer. They need to look at a few things like following eating trends and standing out from the competition a bit more, but they are a highly competitive company that keeps people coming back.