How Chipotle Has Done More Damage At The Company Than Just Letting Down Their Customers

As demonstrated in Exhibit 1 on page 143, the company’s total revenue increased from $1.085.782 million dollars to $3.214.591 million dollars in less than seven years. Beginning at the end of 2007 through the end of 2013, Chipotle’s Mexican Grill total revenues increased at a CAGR of 19.83%. The new provided catering program, the six elements of their strategy adapted to other cuisines (ShopHouse Southeast Asian Kitchen) and the growing number of new restaurants are decisive aspects in increasing revenue yearly.

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.

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

The Fast food industry is extremely competitive. Although Chipotle is a step up from most fast food restaurants, it still must

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.

Chipotle inappropriately handled this crisis because CEO Steve Ells and Co-CEO Monty Moran blamed the Center for Disease Control and the media for exaggerating the outbreak. Creating a public perception of Chipotle’s board members who did not showcase a clear motive for public health safety. After the E. coli outbreak, Moran made statements to Chipotle’s investors at an industry conference: “The media likes to write sensational headlines, you’ll probably see, you know, when somebody sneezes, Ah, it’s E. coli from Chipotle” (Colvin, 2015). Moran made another statement on Twitter ‘saying’ “CDC is working in an unorthodox way” (Wohl, 2015). Moran’s arrogant comments reflected a quality of an unconcerned CEO in the eyes of the public. In one of

Innovation; Chipotle is a very innovative food provider. Chipotle has an intense focus on making the restaurants have “food with integrity”. The restaurant also placed vegan, veggitarian and gluten-free items on the menu to satisfy customer’s different dietary needs. Each new restaurant location is scouted before construction, making sure the business will be there and also having a steady stream of clean produce for “food with integrity”.

Since its IPO nine years ago, Chipotle has grown its enterprise to over 1700 restaurants, 45,000 employees and an annual revenue of $4 billion which has enabled it to capture over 10% market share (Brennan, 2014) in the Mexican food category.

Chipotles greatest strengths is its financial strength. Chipotle had a yearly current ratio above 2.75 from 2007 to 2015. Chipotle has a strong balance sheet with many assets and high liquidation. Another strength Chipotle has is its customer experience. Customer are allowed to see and choice the ingredients they want in their product. The customers are then allowed to grab their own utensils and various other condiments. Another strength is its production layout which is in a service line. A customer and employee move from the first stage and moves towards the cash register. This layout, along with manger supervision, allows for fast service with low ticket times and high customer satisfaction. Chipotle offers high quality ingredients that provide a great relationship between it suppliers. Chipotle uses farm raise animals in their products, which has gain Chipotle a great relationship within its customer base. These animals and ingredients contain no hormones or preservatives. This gives

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.

re strong competitors and Yum! Foods leads the industry it is my recommendation that any investments be made in Chipotle.

For many months now, Chipotle has been on the offense in trying to revive their fate in the fast food market and figuring out what really caused the outbreak (Jargon, Jessie B6). According to Chipotle, the loss was more than they had ever seen, as: “fourth quarter net income of $67.9 million, or $2.17 a share, down 44% from a year earlier, on a 68% drop in sales to $997.5 million. It was the first decline in the quarterly revenue since Chipotle went public in 2006,” (Mr. Ells B6). Chipotle suffered a significant loss in revenue and was hit with a severe disease that might have put them out of business. However, Jargon and Jessie convey that Chipotle is bringing in healthier, cleaner, and fresher ingredients in their restaurants. They have fully investigated the source and have taken several necessary precautions to avoid such events from happening

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,

Chipotle has recently approved the project for a new product expansion. The products that will be now offered will be red chile and green chile. This project was approved for many reasons. The project will help boost Chipotle’s sales overall. It will also add more menu items to Chipotle’s current offerings. Chipotle can capitalize and eventually also add more locations pending project success. There are so many more benefits from product expansion than risk. This definitely makes the project more feasible. I am confident that this new product expansion will bring favorable results. It will result as the stepping stone to more successful product launches.

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