Case Study : Chipotle Mexican Grill

Chipotle ventured into a new territory when it was created, as it had an innovative vision for fast-casual restaurants. By using fresh and quality ingredients, Chipotle raised the bar in their segment. The service line where customers could see their order being prepared enhanced the experience of Chipotle. Consumers who were used to eating at fast-casual restaurants where the food was frozen and made out of sight were able to savor the uniqueness of Chipotle. These differences helped Chipotle become successful. However, as competitors copy the traits that make Chipotle unique, Chipotle must adapt and overcome in order to remain a profitable company.

Chipotle, on the other hand, “seems to have created a sustainable branding strategy that leverages its good food, humorous ads, distinctive interior design, and in-store world music” (Wikinvest.com, 2010). The company is positioned to capitalize on their organic and farm raised food, and high quality ingredients. “According to the organic Trade Association (OTA), organic food sales are growing at a 20% clip annually in the US, although such food only accounts for 3% of all food and beverage sales” (Wikinvest.com, 2010). Chipotle is also positioned to tap multiple markets: baby boomers who can afford to dine out, Hispanics, two income families who do not have time to cook, and the socially conscious consumer.

One of Chipotle’s significant core competencies is to offer premium quality food at a low cost. In 2003 to 2004 Chipotle decided to obtain locally grown produce and meat from farms with high animal welfare standards. Farmers who followed the guidelines set forth by the Department of Agriculture’s were Chipotle’s priority suppliers to fulfill their “Food with Integrity” campaign. Providing a close business relationship with these farmers has enabled both Chipotle and the farmers to have a competitive advantage over their competition. Chipotle has found their customers appreciate a restaurant with strong food ethics. Chipotle is currently leading the way for fast-casual dining especially since the trend in North America is for better healthier ingredients.

Corporate culture from the founders of the company continues to be observed. The basic foundations on which the company was built is maintained. By franchising CMG would be passing its trademarks, and systems to outsiders. They would need to find ways to monitor them to make sure they are being maintained. Also there is the risk that the franchises may not maintain the culture of CMG and this may change the perception of Chipotle to customers. This would have a negative effect on the corporate branches. Even though CMG will have the right to terminate franchisee operations that do not follow the system it may have already caused damage. Also by not franchising CMG does not lose some profits by involving a

Steve Ells started Chipotle in 1993, and expanded the chain to over 400 stores within 12 years. Chipotle is supported by the financial power and sprawling distribution network of owner McDonald 's Corp, and is the largest Mexican-style concept among a number of fast-casual competitors that also have been picked up by quick-service companies in recent years (Peters, 2005).

This article is about how Chipotle was with a federal grand jury subpoena due to a connection with norovirus in a Simi Valley restaurant. There was outbreak of the norovirus and/or E. coli; thus causing many of the chain restaurants to temporarily shut down. Nearly a month after they reopened those restaurants almost 150 college students had a norovirus after eating Chipotle. Which in result is causing the FDA to use criminal sections on these food safety outbreaks.

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).

The first factor is Globalization: the world wide goal of using naturally raised standards, Chipotle had the main core value of customers and animals well being and stopped using hormones and antibiotics hormones on animals and started raising them on a free range on farmland: naturally raised animals. Secondly, Consumers: where Chipotle provided them with high quality, tasty and affordable. The third factor is competition: which varies with region, market, and restaurant. Chipotle face stiff completion from Panera Bread, chick-fill-A, Noodle and other companies. The completion is in the form of taste, quality, and speed of service, prices value, brand recognition, location, customer services and competitor condition. The other factor is marketing: the company focuses on word of mouth and strategic marketing promotions although it used radio and billboards Medias without television which was not genuine. Lately, the company has embarked on the sending messages on Twitter and Facebook, which is the modern marketing methods and also helps to reach a large population compared to the historical media. The company has the hope of finding a content delivery platform that would inspire consumers to become curious about where their food comes from, so as for customers to the idea of chipotle have the food with integrity.

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.

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.

Taco Bell Corporation’s Director of Public Relations has in the last few hours received a phone call from the company’s Government Relations Team. The Government Relations Team has learned that a special interest group known as “Friends of the Earth” will be releasing information on Monday September 18, 2000 to the Washington Post. This press release will be implicating the Taco Bell labeled taco shells which are manufactured, distributed, and sold by

“Food with integrity.” The slogan of Chipotle. Their goal? They use high-quality raw ingredients, classic cooking techniques and more to provide the best experience for both the customer and their employees. Within 23 years, the company has improved so much from a single restaurant in the year 1993 till 2000plus restaurants worldwide. Believe it or not, McDonald’s contributes a lot to Chipotle’s success. It invested in Chipotle in the year 1998, helping the company to expand rapidly, at the same time owned more than 90% of Chipotle’s stock, according to Huffington Post. McDonald’s divested completely from Chipotle by August 2006 as co-CEO Steve Ells stated, “I’ve never thought that we reached Chipotle, the brand’s, full potential during the time with McDonald’s.” Today we will be comparing Chipotle with McDonald’s, by looking at their difference and similarities in their characteristics such as their pricing and output, market power and their revenues and cost structure.

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).

Management is the backbone of any good company. In order for a company to successful, a strong management team is needed in order to meet goals in an effective and efficient manner. Chipotle opened its doors in 1993 when Steve Ells took a chance and began his business in San Francisco. Chipotle is a chain of Mexican restaurants that is based in Denver. Chipotle is often cited as the company that started the fast casual movement where customers can get a healthy prepared meal quicker than other traditional styled restaurant. The fast casual restaurant concept was well received and Chipotle’s popularity expanded all across the United States. Customers could not get enough of the Mexican chain and massive lines could be seen stretching outside the stores all across the country. Along with its popular food, Chipotle Mexican Style Grill is a company that contains a successful management style. Why? What sets this companies management apart from the rest? There are many factors that we could analyze to understand the success of Chipotle, yet for the purpose of this paper, we will look into the cooperate culture of the company, human resource management, their leadership style, and how Chipotle deals with and how the company manages in times of crisis.

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).