Industry Profile Of Chipotle

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’s organizational structure is centered on the functional structure. The top levels of management include the co-CEOs, CFO, Head-Media Relations, and Chief Creative and Development Officer CCDO (Chipotle). Chipotle is a smaller corporation relative to its competitors, which allows it to focus on a vertical hierarchy based on functions. The fact that there are few departments demonstrates that Chipotle is still a growing corporation. Chipotle is a highly centralized corporation as all of its stores are corporate owned and they must follow the rules set by the corporate headquarters this involves the same menu throughout the country and the same prices. The restaurant business follows high levels of formalization a set of guidelines must be followed in order to comply with food and health regulations. There is low division of labor at the restaurant level as those cooking can shift to serving and cleaning when needed, allowing the allocation of labor to match whatever is needed in the situation. A unique aspect of Chipotle’s upper management is the fact that there are two CEOs (Feloni). The two CEO help ease job functions and enables them to be more accessible. Another managerial aspect of Chipotle is the through the position of restaurateur. There are 183 of these positions and they work to manage several Chipotles, bringing management close to each store (Investor’s Business Daily). From their organizational structure we can see they place high importance on

The restaurants setting is aesthetically pleasing and uniquely from other traditional fast-food restaurants. The restaurants’ food preparation area was equipped with stoves and grills, pots and pans, cutting knives, wire whisks, walk-in refrigerator and other kitchen utensils. Besides, the company support systems and functions include distribution centers, quality assurance department, training and risk management department, accounting and finance, internal team of real estate managers, administrative and general management. All of these let the company to maintain the daily operation and run the business

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.

Chick-fil-A is one of the most successful fast food restaurant establishments in the country. With over 1,300 locations in 37 states in the Southern U.S., they continue to grow the brand by expanding to new territories (Chick-fil-A Company, 2009, para 1). In 2008 Chick-fil-A has seen a 12.17 percent sales increase over the chain’s 2007 performance and a same store sale increase of 4.59 percent (Chick-fil-A Company, 2009, para1). Throughout the years Chick-fil-A has come up with many innovative ideas to continue expanding business and satisfying their loyal customers. One of the ideas was to offer different types of restaurant set-ups to cater to customer’s needs. The different restaurant set-ups include mall/in

In the year of 2005, the total revenue of Chipotle was $627.7 Million dollars. "Chipotle Mexican Grill Inc. (CMG-$53.50 a share) was a January spin-off with an initial public offering price of $22 -- from McDonald's, the largest retailer of hamburger buns in the world. By year-end 2004, CMG had 387 locations, generated $470 million in revenues and earned 21 cents a share."(Berko) Last year, CMG had 485 locations that produced $627.70 million the growth revenue was at 33.40% in 2005. "pushing tacos, burritos, salads, plus huge helpings of tired rice and boring beans reporting net income of 78 cents a share. This year, CMG expects to earn 71 cents a share and, according to Prudential Securities, CMG will report $1 billion in 2007 revenues (that's a lot of beans) and post higher earnings of 98 cents a share." (Berko) Although Chipotle is at an all time high I believe that it may well be trading its shares at to high of a price. Mcdonalds the best and most efficiently run profitable fast food restaurant is trading their shares at 17 times earnings. Today Chipotle is trading at an outstanding $56.07 Per share. I don't believe Chipotle is worth anything over $30 a share. Although the price of chipotle stock is too high there should still be a hefty revenue at year end 2007. Predictions suggest 1 Billion dollars. For 2005

One of the biggest epidemics that hit the seen this year is the ongoing e-coil scare that involves six states and 45 people with the fast growing Mexican food chain Chipotle. Currently the Center for Disease Control Prevention has tracked a serious strand of e-coil, to a common meal item or ingredient served at Chipotle Mexican Grill restaurants in several states. Out of those 45 people that have came in contact with the strand of e-coil 16 of them have been hospitalized due to the severeness of the strand. This epidemic can be categorized as being serious do to the fact that it has spread over many states and yet it has not been pinpointed to a specific cause.

Chipotle’s menu includes salads with chips, soft shell tacos, burritos bowls, and burritos. It uses top and ascendancy ingredients to cook in its emergent suburban and urban restaurants. While fast food restaurants rely on advertisements to uphold their menu, by contrast Chipotle concentrates on the firm selection of ingredients. That certainty changes

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).

Chipotle’s quick ratio is 3.28, slightly lower than its current ratio. Yum! Foods quick ratio is .62, which is also slightly lower than their current ratio. Both ratios are acceptable as long as A/R is not expected to slow. Chipotle appears to be a significantly stronger company than Yum! Foods. The industry average is not given.

Based on the brief research, Chipotle bases its long term goals around the three basic marketing strategies: Concentrated growth, Market development and Product development.

Explaining just about one quarter of the United States population eats fast food every day , he claims that fast food restaurants have “not only [changed] the American diet, but also our landscape, economy, work force and popular culture…and the consequences have become inescapable regardless ” how often you eat it ( Schlosser, 2004, p.3). According to DATAMONITOR a market research firm’s Fast Food Industry Profile,” [in] the United States fast food market grew by 0.2% in 2009 to reach a value of $71.4 billion. And, the compound annual growth rate of the market in the period 2005–09 was 3.7%” showing even years after the book was written, fast food continues to take a greater market share of consumer’s food dollars (“Fast Food Industry profile”,2010, pg. 12).

Management is the backbone of any good company. In order for a company to successful, a strong management team is needed in order to meet goals in an effective and efficient manner. Chipotle opened its doors in 1993 when Steve Ells took a chance and began his business in San Francisco. Chipotle is a chain of Mexican restaurants that is based in Denver. Chipotle is often cited as the company that started the fast casual movement where customers can get a healthy prepared meal quicker than other traditional styled restaurant. The fast casual restaurant concept was well received and Chipotle’s popularity expanded all across the United States. Customers could not get enough of the Mexican chain and massive lines could be seen stretching outside the stores all across the country. Along with its popular food, Chipotle Mexican Style Grill is a company that contains a successful management style. Why? What sets this companies management apart from the rest? There are many factors that we could analyze to understand the success of Chipotle, yet for the purpose of this paper, we will look into the cooperate culture of the company, human resource management, their leadership style, and how Chipotle deals with and how the company manages in times of crisis.

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

In 2010, MCD create a breakfast menu as the economy continued to slump which the menu design for the people who need to save cost of living also the people who need to get to work in the morning. The price of the menu would be significantly cheap in this kind of economic and when comparing with competitor such as the local restaurant, the price would be still