Chipotle Managerial Accounting

SMW’s current accounting information system is a cutting edge relational database system through Microsoft Access with internal controls set to adequately prevent and detect errors and fraud. This relational database system tracks sales orders, shipments, accounts receivable, cash receipts, purchases, accounts payable, cash disbursements, inventory levels and other relevant accounting information. The system’s output is compliant with Generally Accepted Accounting Principles (GAAP). The database processes currently in use at SMW are described below.

This will need to be a system that is available at each of the individual stores. Sales clerks will need to have the ability to access this information so that when a

Organizational Structure Chipotle has a formal organizational structure with an organizational chart depicting a single CEO, Steve Ells. The formalized organizational structure is evident in the “strict guidelines for food preparation, service, store layout and design and cleanliness” (Organizational structure, n.d.). The company is centralized due to the fact that all locations are corporate owned and the corporate office sets strict guidelines for each store to follow (Organizational structure, n.d.). This centralized structure is what allows Chipotle to deliver the same experience at every location.

When Chipotle opened its first store in 1993, the idea was simple: demonstrate that food served fast didn 't have to be a "fast-food" experience (Chipotle.com, 2010). Chipotle uses high-quality raw ingredients, classic cooking methods and a distinctive interior

Chipotle Mexican Grill was a concept turned reality by a gentleman by the name of Steve Ells. Chipotle Mexican Grill provides excellent Mexican cuisine driven by a concept of “Food with Integrity”. The first chipotle Mexican grill was opened in 1993 in Denver Colorado. By the end of 1995 there were three. In 1996 alone, Steve Ells opened five more Denver-area restaurants growing by a total of eight stores in three years. By 1998 Chipotle Mexican Grill was showing much promise. In order to meet their growth needs Chipotle took on outside investors.

A Tool for Business Analysis,

Chipotle Mexican Grill is one the fastest growing restaurant businesses in the United States. Chipotle Mexican Grill was founded by the current CEO, Steve Ells, in 1993. Chipotle headquarters are located at 1401 Wynkoop Street, Denver, Colorado 80202. The company operates in the restaurant industry and more specifically the fast casual Mexican restaurant market.

The fast food, or quick service restaurant industry (QSR), represents approximately 200,000 restaurants and $155 billion in sales in the U.S. alone, they are one of the largest segments of the food industry (Hoovers, 2011). This segment of the restaurant industry is “highly competitive and fragmented… number, size and strength of competitors vary by region, market and even restaurant. All of these restaurants compete based on a number of factors, including taste, quality, speed of service, price and value, name recognition, restaurant location, customer service and the ambience and condition of each restaurant” (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

Chipotle first opened in Denver in 1993 with a simple idea behind it, “food served fast didn’t have to be “fast-food” experience”, (Chipotle Mexican Grill, 2015). Prior to CEO Steve Ellis opening the restaurant chain, he himself was a chef. Since its creation, Chipotle has become a phenomenon in the restaurant industry and has experienced tremendous growth since it went public in 2006 with over 1,600 restaurants in Canada, United Kingdom, Germany, and France, with the majority located in the United States (Chipotle Mexican Grill, 2015).

Steve Ells is the founder and CEO of Chipotle. Steve is a trained chef and opened his first Chipotle store in 1993 at a former Dolly Madison ice cream store in Denver, Colorado. His goal was to serve high quality, delicious food quickly and in a “fast-casual” setting (Ells).

Chipotle has opened their stores in few countries such as the UK, the US, Canada, Germany and France. It is now time for the corporation to follow the lead from other companies like Yum. Brands such as KFC and Taco Bell as well as McDonalds expand their footprint in the Asian market like Japan. For example, Chipotle operates less than 2,000 restaurants in only 5 countries, while McDonalds operates more than 35,000 restaurants in 119 countries, and Taco Bell, another Mexican restaurant, operates 6,500 restaurants in 20 countries which shows that the Chipotle could do better if it expands its business.

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 an American restaurant chain that currently has more than 1700 locations, with most of its locations in the U.S. and several in Canada and Europe. Chipotle has been gradually expanding its international presence since it opened its first location outside the U.S., in Toronto in 2008 (International Strategy, 2015). The restaurant now has 17 locations outside of the U.S. including locations in London, Paris, and Frankfurt. However, like all other international corporations, Chipotle strives to grow its business even further and extend global awareness of its brand. The next step in Chipotle’s global strategic plan would be to venture into new waters and enter Asia. Hence, Chipotle is now analyzing the decision of expanding operations into China.

“Measurement is the process of determining the monetary amounts at which the elements of the financial statements are to be recognised and carried in the balance sheet and income statement. This involves the selection of the particular basis of measurement.” (Measurement Bases for financial accounting, 2005)