Chipotle External Factors

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.

In 2012, the restaurant industry was a $435 billion dollar industry (Tristano, 2013).This amounts to a very large market that Chipotle has the opportunity to capture. In that same year the casual Mexican restaurant market totaled a whopping $31 billion in sales (Tristano, 2013). This was a 13% increase for the casual Mexican restaurant market and only amounted to 7% of the entire restaurant market. According to Tristano’s (2013) research, Chipotle Mexican Grill was the second fastest growing fast casual restaurant of all the fast casual restaurant markets in 2012.

In the 21 century, people are suffering from all kinds of diseases and over 85% of them are caused by, an unhealthy, diet. In the United States, 25% of Americans eat fast food every day, which can cause heart disease, hypertension and diabetes, starting with overweight. McDonalds, Taco Bell, Wendy’s, and Burger King are very popular, fast food restaurant selling their burgers and fries in the airport, street shop, next to Wal-Mart and college.

In a 2003 court case, “Caesar Barber v. McDonald’s Corporation, et al.,” Barber claimed he was unaware of the nutritional and fat content of the fast food he ate on a near-daily basis for decades, and which he claimed caused his multiple illnesses (Daily Caller). The people of the court ruled that Barber’s choice of food was the cause of his many health issues, not the restaurants which supplied the fast food. In this case, the court held the consumer responsible for his selections; however, the court’s expectation of personal responsibility in food selection will most likely become anachronous. The article “Is Fast Food the New Tobacco?” addresses the issue of rapidly growing fast-food chain restaurants, such as McDonalds, Burger King, and Taco Bell, and the health issues that perpetuate from an increased amount of these restaurants. Anywhere we travel today, out of town, to a big city or a small village, consumers are bound to see some sort of advertising for fast food. Many billboards display life-size pictures of steaming hot sandwiches, fresh-cut fries, or an ice cold beverage. The streets are lined with bright, golden arches, fluorescent bells, or a red-headed, smiling little girl. All of these modes of advertisement draw consumers in, whether they be hungry or simply in a rush with no time to cook dinner at home, and feed them food that just isn’t up to par with healthy-eating standards. Notice, these restaurants don’t use force to bring customers in by the masses;

threats and opportunities that must be properly addressed in order to prepare the company for the

Schlosser’s ‘Fast Food Nation’ and Wendell Berry’s ‘The Pleasures of Eating’ have undeniably altered the manner in which I will forever view fast and processed foods. After reviewing the two readings, I am convinced that fast and processed food consumers are the victims of large franchises seeking to make a quick buck at the expense of the consumer’s health. Fast food and processed food consumers are ignorant of the quality of the food that they choose to purchase, solely depending on franchises for the information. Franchisees, on the other hand, choose to conceal this information as revealing it would spell huge losses. They manipulate and decorate food items so as to get consumers to purchase them, with no regard for the health implications they subject their consumers.

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.

This is exactly what the truth seeking author, Eric Schlosser, examines when viewing America’s growing fast food problem regarding the quality, conditions, and health of our citizens. His book published in 2001, Fast Food Nation: The Dark Side of the All-American Meal, discusses and provides evidence of our ongoing dilemma occurring in the United States today. Schlosser argues that the fast food chains and the slaughterhouses/meatpacking industries are run by consumerism and commercialism, two ideals and have become intrinsic to the American identity. Our society is so caught up in the fast food crave that we forget to question

The article from the New York Times blog states that the Chipotle begun the food delivery service in April 2015. Postmates, Chipotle’s first official delivery partner, provides the service. This service covers over 67 cities in the United States. Customers only need to pay the delivery fee that starts from $4.99 to $7.99 according to the distance. Chipotle's chief marketing and development officer Mark Crumpacker indicated that there was a 30% month-over-month growth in Chipotle, since the start of Postmates’ delivery service provided.

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.

Fast food restaurants are said to be full of fattening foods that lead to health problems for all of the people that eat at these restaurants on a continually bases. “The fact is, there is simply no clear, credible evidence that any aspect of food processing or storage makes a food uniquely unhealthy” (Freedman, 2013, p. 13). People just believe that processed food is bad for you just because it is different from traditional food, they are just afraid of this new concept. The biggest fast food chain “McDonald's has quietly been making healthy changes for years, shrinking portion sizes, reducing some fats, trimming average salt content by more than 10 percent in the past couple of years alone, and adding fruits, vegetables, low-fat dairy, and oatmeal to its menu” (Freedman, 2013, p. 13). This company is giving the consumer many healthy choices to choice from,

Today’s society is becoming increasingly more health conscious. Consumers are aware of calories, obesity, sodium content and fatty food intake issues. Many restaurants have responded to the healthy eating trend by expanding the number of healthy food choices on their menus. A study found that American fast-food chains increased their healthy menu items by 65% during the second quarter of 2009 to the second quarter of 2010 (Midday, 2010). Another important social factor is the desire to be socially responsible. More restaurants are going green by choosing local ingredients, meats, and vegetables over those shipped from thousands of miles away. A study reports that around 80% of Americans consider themselves to be environmentally conscious. The same study found that over 60% of Americans prefer to eat at eco-friendly or green restaurants (Hubpages, 2010).

One can only assume that Chipotle uses concentration strategies for their corporate level strategies, because they only concentrate on the restaurant industry. Market penetration and market development is their main focus, as they are attracting new customers as they increase brand awareness through their business strategies and their “Food With Integrity” campaign, Farmed and Dangerous live action story-telling comedy series, and Cultivate Foundation, which is a non-profit organization supporting sustainable agriculture, family farming and food education, and they are expanding into new markets with international expansion, so Chipotle can continue “to change the way people think about and eat fast food” (Chipotle, 2015). Chipotle also, uses ‘product development’, but not as aggressively as market penetration. The most recent product development is a meat alternative made from tofu, called “Sofritas”. Chipotle is highly invested in Pizzeria Locale, suggesting the possibility of horizontal integration in the near future, and is using an adjacent strategy with its sister restaurant ShopHouse Southeast Asian

Chipotle is a fast casual dining establishment that serves Mexican cuisine, specializing in burritos and tacos. Like other fast casual restaurants, it does not offer full table service, but promises a higher quality of food with fewer frozen or processed ingredients than fast food restaurants. In fact, Chipotle is widely known for its mission to only use organic ingredients and

Traditionally, the fast food industry has been associated with the cause of this health-related issue (Boyle 2004). Major fast food companies have been called to Federal Government summits to improve the quality of junk food (Wright 2007). While most of these major companies have now taken