Chipotle's Business Model

Decent Essays
Chipotle is a Mexican, fast casual restaurant located throughout the United States and also expanding into different countries. Fast casual restaurants are defined as “…fast food restaurant that offers better-quality food and whose check size is higher than at a typical fast-food place” (Fast Casual, 2013, para 1). The restaurant prides itself on serving fresh and sustainable food that is reasonably priced. The restaurant uses ingredients from local farms and prepares the food options daily. It has been noted that no restaurant has a microwave or a refrigerator located inside, forcing the products to be made fresh each day (Chipotle Marketing Plan, 2015). Steven Ells, founder of the company as well as co-chief executive officer, opened…show more content…
The company began to grow and by 2005 there were 500 units open (Subramanain, 2013, para 20). The company continues to follow the business model that is primarily focused on “…operational proficiency and social responsibility” (Chipotle’s Growth Machine, 2011, para 6). Ells is proud of the success that his company has been a part of. The business has been successful because of the process that is completed. He states, “It works because of our system: fresh, local, sustainable ingredients, cooked with classic methods in an open kitchen where the customer can see everything, and served in a pleasing environment” (Chipotle’s Growth Machine, 2011, para 6). With their focus on fast casual, the business continues to find success based on reasonable costs for their products and the environment in which they are served. As outlined in the case there are a few key concerns that Chipotle as a company needs to address in order to see continued success. Chipotle has to make a decision on what type of approach to take in order to maintain quality and price. Quality and price are essential to the future…show more content…
The cost of Chipotle’s food is higher than other companies in the industry. As the case shows in Exhibit 1, the cost of a burrito bowl with chicken at Cantina Bell is only $5.99 compared to the price for the same item at Chipotle is $9.88. The price of their products are almost double those of Cantina Bell. Consumers that are looking for cheap prices may choose Cantina Bell over Chipotle, even though the quality of the food is much less than Chipotle’s. The next element was stated also as a strength, but can in some cases be seen as a weakness. The menu is limited, which leads to not a wide range to choose from. The advertisement and promotion of the company is not its strongest component. The company does not use television commercials or advertisements which leads to less of a target audience. There are very few promotions that reach to the general public. If the company were to branch out and expand their target audience, they may have an opportunity to attract more customers. They are mainly successful because the customers that come to the store, come back because of their positive experience. The company sees their mission as “…building evangelism [rather] than rewarding frequency” (Subramanian, 2013, para 38). The last weakness that was identified for Chipotle was the issue with lawsuits. The company has had a number of problems with food borne illnesses which introduces
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