Could a Chipotle Acquisition Stretch Starbucks Too Thin?

The idea is intriguing. Niccol helped revive Chipotle after a series of food-safety crises, and he knows its business unusually well. But his current assignment is hardly finished. 

Starbucks is still executing a sweeping turnaround intended to improve service, restore the coffeehouse experience, and strengthen profitability. That creates a familiar leadership dilemma: When an attractive new opportunity appears, how do you know whether to pursue it or stay focused? 

The potential appeal is easy to imagine. Starbucks has a vast international footprint, while Chipotle has far fewer locations outside the United States.  

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Analysts have suggested that a combination might create opportunities for international expansion, customer loyalty programs, or new occasions to reach diners. There is a plausible growth story here, even if the economic case remains unproven. 

There is also a substantial cost to pursuing a strategy, beyond the purchase price. Acquisitions consume executive attention, require financing, and demand integration across systems, cultures, and operating models. Analysts have questioned how much the two companies could save by combining operations, given their different products and supply chains.  

A deal could create value, but that value would not materialize simply because both brands are successful.