Essay on Chipotle Balanced Scorecard

2088 Words Apr 9th, 2014 9 Pages
Chipotle 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. …show more content…
Operations
To date all restaurants are company-owned and not franchised. Restaurants cover forty-three states in the U.S., Canada, England, and France. The only variation to the original model has been an increased environmental awareness and a “Test Restaurant” in Washington D.C. that serves Asian-Style fast casual food.

Strategy
Reading through the annual reports Chipotle’s strategy is comprised of four components:
1. To increase consumer awareness with regards to the importance and benefits of consuming naturally-raised produce.
2. To vigorously seek out expansion into the European markets.
3. To continue to grow and foster new relationships with food suppliers.
4. To continue incurring only minimal amounts of expenses relating to marketing and other advertising expenses.

Financial Analysis Fast food is known for low quality and low prices. Alternatively, the dine-in experience offers high quality with a higher price. Some restaurants seek a low-cost dine in experience but this is done with a deteriorated food quality. Therefore, it would make sense that Chipotle’s philosophy of high quality has a hard time maintaining a low price. Chipotle makes this work by charging slightly higher prices than fast food. Customers are willing to pay this because of the differentiations Chipotle offers but how does this translate overall financially? One key aspect for Chipotle is their ability to cover debt. They maintain very liquid assets to cover the costs of

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