Chipotle Case

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 has a very simple product line-up offering tacos, burritos and salads. However, it offers up to 65000 combinations of ingredients for customers to choose while assembling the product. The product ingredients, sourcing and preparation are important for Chipotle w.r.t. customer experience and perceptions about the brand. There is however, no difference in product line-up when compared to direct competitors like Qdoba.

Where and when did you observe the behaviors? Who made the observations? On 1/28/16, En-Lei observed inside of Chipotle. On 1/29/16 and 1/30/16, Matt observed across the street from Chipotle. On 2/1/16, Dana observed from a window across from Chipotle in the lobby of the Huntington Hall. On 2/2/16, John observed across the street from Chipotle. What behavior categories did you observe? How did you define each behavior category? We observed the outwardly happiness or unhappiness of individuals leaving Chipotle during lunch hours. We defined outwardly happiness as the smiling of each individual leaving Chipotle and unhappiness as the lack of a smile. When and how did you make observations? We used the frequency method of observation during lunchtime

The actions taken by Chipotle after the E.coli outbreak can be seen as both exacerbating the problem and finding ways to resolve the problem. However, as the crisis began, leadership coming from CEO Steve Ells and Co-CEO Monty Moran painted a picture of denial. One of the first decisions made in reaction the crisis was to purchase full-paid advertisements. This marketing tactic was done to mask the severity of the e-coli outbreak, sooth investors, and retain loyal customers. In addition to television advertisements, Chipotle decided to advertise using direct mail (Wahba, 2016). This practice does not correlate with traditional chipotle advertising; their last paid advertisement was in 2012. Chipotle has always operated in a fashion that let

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.

Two Mexican restaurants; Chipotle and Qudoba. People say both taste great but many people choose one versus the other. Working at Chipotle, I get a lot of pros and cons about Qudoba and Chipotle. Some people don’t like that our guacamole isn’t free. People always say “why don’t you be like Qudoba and have your guacamole free?” and I always tell them “our guacamole is organic, handmade. I would know because I make the guacamole.” Chipotle is a better place to eat because our food is handmade and organic. Our vision statement is “to change the way people think about fast food and to create an environment empowered by top performers who achieve high standards” (Moran)

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.

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.

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).

Chipotle is the leader in the fast casual market, with over 1,900 locations, $3.21 billion in annual revenue, and the ability to serve up to 300 customers an hour. It has innovated the restaurant market by providing reasonably priced scratch-made meals, containing local ingredients, all within the confines of a pleasing aesthetic environment (Chipotle Mexican Grill, Inc., 2014; Kaplan, 2011). To reach its success, the firm utilized architectural innovation by stealing components of various types of restaurants already in existence. The company appropriated its rapid meal preparation methods from fast food chains such Subway and Quiznos, adopted its provision of quality food from more upscale casual Mexican restaurants, and implemented a locally based supply chain similar to that seen at many local farm-to-table establishments. This convergence of different properties came together right as the millennial generation was coming of age and demand higher quality, natural, and locally sourced ingredients in meals that could receive quickly. The company has also attempted to utilize an incremental innovation approach by removing all CMO ingredients and testing new foods such as breakfast items, soup, and chorizo sausage (The Associated Press, 2015; Peterson,

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

As Chipotle began to grow and expand, Steve took the initiative to learn about the way most of the food in the US is produced and processed. He was quite disturbed when he discovered that pigs were raised in confinement, produce was grown on factory farms with very little respect for the environment and dairy cows were confined and injected with hormones (Ells). This experience prompted Steve to meet with ranchers and

2. What does a SWOT analysis reveal about the attractiveness of Chipotle Mexican Grill’s situation and future prospects?

I believe one segment of the Chipotle customer population is the self-expression people. These people are the kind of customers that want to express their values of supporting the local farmers and the farmer’s mission of growing organic food and their way of supporting that movement is by patronizing this kind of restaurant.