Chipotle Competitive Advantage

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.

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.

Chipotle’s organizational structure is centered on the functional structure. The top levels of management include the co-CEOs, CFO, Head-Media Relations, and Chief Creative and Development Officer CCDO (Chipotle). Chipotle is a smaller corporation relative to its competitors, which allows it to focus on a vertical hierarchy based on functions. The fact that there are few departments demonstrates that Chipotle is still a growing corporation. Chipotle is a highly centralized corporation as all of its stores are corporate owned and they must follow the rules set by the corporate headquarters this involves the same menu throughout the country and the same prices. The restaurant business follows high levels of formalization a set of guidelines must be followed in order to comply with food and health regulations. There is low division of labor at the restaurant level as those cooking can shift to serving and cleaning when needed, allowing the allocation of labor to match whatever is needed in the situation. A unique aspect of Chipotle’s upper management is the fact that there are two CEOs (Feloni). The two CEO help ease job functions and enables them to be more accessible. Another managerial aspect of Chipotle is the through the position of restaurateur. There are 183 of these positions and they work to manage several Chipotles, bringing management close to each store (Investor’s Business Daily). From their organizational structure we can see they place high importance on

Chipotle Mexican Grill is a fast casual Mexican Restaurant that operates from the United States. Although the restaurant is specifically segmented to the fast casual Mexican restaurant market, it does not simply operate in this realm. Chipotle is also successful operating in the restaurant market as well. According to the Trefis Team (2014) Chipotle Mexican Grill has managed to take market share from restaurants in the fast food industry.

Also, it would be cheaper and less headache because you don’t have to wait five to ten minutes at Chipotle for your food. The meal you make at home, the kids may like it more than going out to eat. These are the three things that might or will affect Chipotle.

My first recommendation would to have each Chipotle to be more involved in their community. By this, I mean, that if there are community gatherings, such as block parties or festivals, Chipotle should establish itself and use it as a place to market and sell their food. My second recommendation would be to find more ways to recycle. From my experience at Chipotle, many of the bags and tin foil used to wrap the burrito just get thrown away. Not only would this reduce costs, but this would also be a good practice to attract new customers.

Chipotle is facing numerous challenges due to the fact that E. coli outbreak which requires the corporation from the key stakeholders to keep it under control and apply the new food safety protocols which can aid to bring the regular customers back. Although the main cause remains a mystery, Chipotle’s E. coli outbreak has been authoritatively declared officially over by the experts. However, since the poisoning outbreak, the impact of the reduced number of customers affects the profit which the company used to enjoy before such eventuality (Scholes 27).

This paper explores the mission, vision, values and principles of Chipotle Mexican Grill that guide them in the restaurant industry. Their key mission, vision, and values revolve around providing food with integrity and changing the way people think about and eat fast food. Chipotle’s principles include sticking to the basics of a simple menu and uncomplicated, interactive employee roles.

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

Analysis of the External Environment Within the fast casual sector, there are certain outside trends and forces that the industry must address. Many of these trends and influences can lend themselves to being opportunistic in nature; however, there are some that can jeopardize the well-being of the restaurant. The success of a Chipotle ultimately depends upon how well it can use its strengths to take advantage of external trends. To analyze specific opportunities, we looked at eight unique factors we have identified as vital to growth. They include an increased interest in organic and healthy food, improvements in technology, sustainable business model, a growing worldwide middle class, projected growth in the fast casual and quick service

The Chipotle Mexican Grille opened its first store in 1993 beginning a new category in the restaurant industry known as “fast casual” (About Us, 2014). This new category featured the “highest quality raw ingredients, classic cooking methods, and distinctive interior design-features that are more frequently found in the world of fine dining.” However, aside from the normally long wait in lines, an order could be taken and served in only a couple minutes. Currently Chipotle operates more than 1,500 restaurants internationally. The following pages will present a balanced approach to the effectiveness of Chipotle’s strategy analyzing financial performance, customer satisfaction, employee/learning and growth, and internal process.

Due to economic downturn the strength of the buyers’ power has increased as the industry looks to gain consumers with pricing strategies much like those of McDonald’s “Value Menu” and combination meals even though the cost of commodities have gone up (James, 2010). Customers of QSRs are looking for quality food without high costs. While Chipotle does not have a value menu or offer any type of combination meal much of their success is due to the fact that the customers are willing to pay a higher cost for higher-quality (Chipotle, 2010).

The purpose of this report is to present a strategic plan created for Chipotle Mexican Grill, Inc. (CMG). The strategic planning process began with an internal analysis to better understand Chipotle’s current mission and vision statement, and its effectiveness in leading current strategy and performance, and included analysis of Chipotle’s strengths and weaknesses, and trending financial position. External environment analysis was also conducted, to better understand the industry and its competitors. Results of the internal and external analysis were used to determine strategies for maintaining a competitive advantage. Recommendations and an action plan for strategy implementation are suggested, as well as, an evaluation plan

The restaurant industry is said to be one of the oldest industries in the economy. As the economy and urbanization grow, so too does the industry of restaurants; it’s for this reason that the industry has been growing at a rapid pace. Even with the restaurant industry ebbing and flowing, there are still new entities entering the fray consistently. Some restaurants may close, but it will not be too long before a new restaurant opens in the place of the old one. Historically, the restaurant industry has contributed nearly 4 percent to the gross domestic product (GDP) of the United States (U.S.) economy. The most recent findings show that the restaurant industry employs more than 12.7 million people (which is approximately equal to 9 percent of the

Companies in the Quick Service Restaurant (QSR) industry compete mainly on efficient operations and effective marketing. Usually, large companies enjoy advantages over small companies in terms of purchasing, finance, and marketing. But small companies can still compete by improving their products and services. The US is the global QSR market leader, taking 20% of global industry revenues (Hoovers). According to Porter, an industry has to have sustainable profits for firms to foresee in order to make firms profitable and successful (Porter, 3). However, according to our research the QSR industry is in danger of reaching unsustainable profit margins if industry leaders fail to adapt their business practices to this volatile market. The dining culture has changed over the years as people have become more aware of healthy eating lifestyle. This trend is expected to continuously dictate future market demand.