Case Study Chipotle

As demonstrated in Exhibit 1 on page 143, the company’s total revenue increased from $1.085.782 million dollars to $3.214.591 million dollars in less than seven years. Beginning at the end of 2007 through the end of 2013, Chipotle’s Mexican Grill total revenues increased at a CAGR of 19.83%. The new provided catering program, the six elements of their strategy adapted to other cuisines (ShopHouse Southeast Asian Kitchen) and the growing number of new restaurants are decisive aspects in increasing revenue yearly.

Chipotle, ever the noble ambassadors of good burrito will, have been humble and cooperative throughout the investigation. Health officials are giving the company kind words and gold stars (despite, you know, the salmonella). One spokesperson for the department of health said that “Chipotle has been extremely proactive in collaborating with investigators to quickly control the outbreak and identify its source.” Another asserted the Health Department’s confidence that it is now safe to eat at Chipotle, sharing that he had a burrito bowl there last Wednesday.

Although many customers enjoy that Chipotle is sticking to their “Food with Integrity” mission statement, it could prove to be very costly to them and their customers. Chipotle’s food costs are currently higher than the industry average. Per Exhibit 1 of the Chipotle’s article, shows that Taco Bell cost half the amount for the same type cuisine at Chipotle. Chipotle charges higher prices for a fast food store, with the average customer spending approximately $8.50 per visit. It is important to monitor of economic changes of customer spending habits so they are aware of price elasticity and

One thing that is obvious is Chick-fil-a wants to help young people have a future. They do so through education, entrepreneurship, and leadership. The restaurant supports organizations who help children learn by encouraging children and giving them the tools to become successful in their schooling. One of the things the company is trying to do is help young people become entrepreneurs which will help newer generation give back to their communities. As well as entrepreneurs giving back so will those who learn how to become effective leaders. The websites were filled with ways how they help the community, but I did not find the same on the Chipotle website. Chipotle talks about fundraisers, but does not say anything about trying to help the community, nor does it talk about scholarships. Chick-fil-a is an active part of the community.

The company had run a national TV commercial which named “Back to the Start” during the Grammy Awards. Chipotle also had published their food, restaurant concept and business through favorable articles and television programs. Moreover, Chipotle used video and music programs as well as event strategy to attract the consumers’ attention to their restaurants. The company also initiated promotional activities via newly opened restaurants to attract more consumers. Chipotle introduced a reward program, the “Farm Team” to encourage more customers to join a program that educated them something related to Chipotle Mexican Grill business concept. In addition, the word-of-mouth publicity from customers enable Chipotle to reduce the cost of advertising but at the same time increasing the brand reputation of the restaurants in the

America’s favorite Mexican restaurant chain Chipotle opened its business in 1993 founded by Steve Ells with the goal “ to serve high quality, delicious food quickly with an experience that not only exceeded, but redefined the fast food experience. To that end, we focus on sourcing the best possible ingredients, serving the tastiest food, and growing the most capable team we can (CITATION).” As they grew into a national chain, their core mission was refined and named “Food with Integrity,” and they increasingly became public champions of the benefits of eating sustainable food. The chain has used the mission almost religiously, and it truly does strive to prepare food

Compared to college areas, white collar employee tend to care more about a healthy diet and would be willing to pay a higher price for quality food. The number of customers in a given workday would be a stable market for Chipotle, and the costs associated with this new venture would be less than building a freestanding restaurant. A Chipotle express window would provide the same quality food as its regular restaurant but in a smaller store location. For healthy conscious professionals, Chipotle products would come to mind first when choosing from the available lunch

Chipotle restaurants take into account the environmental concerns by promoting and meeting LEED standards energy use, lighting, water and material use. In 2009, Chipotle's restaurant in Illinois is the first restaurant awarded the Platinum level certification in the Leadership in Energy and Environmental Design (LEED) by the U.S. Green Building Council (USGBC), and the company continue to build “green” restaurants that received LEED certifications as well. Moreover, in 2010, solar panels was installed at 75 Chipotle restaurants, and that makes the chain the largest producer of solar power in the fast food restaurant industry

The Fast food industry is extremely competitive. Although Chipotle is a step up from most fast food restaurants, it still must

Situational Analysis "5Cs" Customers: Chipotle's customers consist mainly of millennials (Ages 23-36) that are avidly seeking healthier alternatives to fast food (9). Millennials account for about 20% of the US population. Millennials are busy so the quick service at Chipotle is enticing and they are a more health conscious generation so they enjoy the organic food at this chain restaurant. They are willing to spend some more money so they do not have to sacrifice quality and health. The freshness and mexican flair of the food along with the modern and trendy restaurants make it appealing to this group.

The purpose of this new product expansion is to increase sales primarily. Increasing sales is very important for Chipotle and these new products can help raise revenues significantly. The project deliverables include the introduction of the project, and the implementation of the project both in the United States and then other

Changes in customer preferences, general economic conditions, discretionary spending priorities, demographic trends, traffic patterns and the type, number and location of competing restaurants have a moderate effect on the restaurant industry (Chipotle, 2010). One example of customer preferences being a driver in the industry is the “Whole Food-ism Movement” which has put a large focus on organic, antibiotic-free, and non-processed foods (Mansolillo, 2007). Consumers now look for healthier options when eating and an overall healthier lifestyle. Chipotle has been able to benefit from this movement by carrying on their “Food with Integrity” mission (Chipotle, 2010).

Chipotle has a fairly large market chain of restaurants located primarily in the United States with over 1900 restaurants, along with other locations in Canada, France, Germany and UK. The company also has two brands under the chain called ShopHouse Southeast Asian Kitchen, serving Asian-inspired cuisine, and Pizzeria Locale, a fast-casual pizza concept. In the U.S. field that Chipotle mainly operates has been experiencing rapid growth with the fast casual concepts in the industry recently, which creates its competitive advantage away from operators such as McDonald’s and

Chipotle is the leader in the fast casual market, with over 1,900 locations, $3.21 billion in annual revenue, and the ability to serve up to 300 customers an hour. It has innovated the restaurant market by providing reasonably priced scratch-made meals, containing local ingredients, all within the confines of a pleasing aesthetic environment (Chipotle Mexican Grill, Inc., 2014; Kaplan, 2011). To reach its success, the firm utilized architectural innovation by stealing components of various types of restaurants already in existence. The company appropriated its rapid meal preparation methods from fast food chains such Subway and Quiznos, adopted its provision of quality food from more upscale casual Mexican restaurants, and implemented a locally based supply chain similar to that seen at many local farm-to-table establishments. This convergence of different properties came together right as the millennial generation was coming of age and demand higher quality, natural, and locally sourced ingredients in meals that could receive quickly. The company has also attempted to utilize an incremental innovation approach by removing all CMO ingredients and testing new foods such as breakfast items, soup, and chorizo sausage (The Associated Press, 2015; Peterson,

CMO Mark Crumpacker stated, fast-food marketing typically is a game of trying to obscure the truth; The more people know about fast-food, the less interest they’d want to be a customer. Chipotle’s mission statement “Food with Integrity” reflects its focus on fresh ingredients; great food with a socially responsible message made them one of the first organic oriented fast-food restaurant