Movie Rental Business

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Table of Contents EXECUTIVE SUMMARY 2 INTRODUCTION 3 Company Overview 3 History 3 Current Situation 4 Case summary 6 CASE ANALYSIS 7 Chipotle’s Core Competences 7 SWOT Analysis 7 The primary and secondary components of Chipotle’s value chain 9 The chief components of Chipotle’s strategy 10 The generic competitive strategy 12 Comparison between Chipotle’s strategy and Moe’s 14 Weighted competitive strength assessment 16

Chipotle Mexican Grill is a restaurant company specializing in fast food. Started in Denver, Chipotle now operates 1,230 stores in 41 states in the District of Columbia, Canada, and the United Kingdom. Chipotle serves a limited menu that is highly customizable. They pride
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Chipotle also has a very stable financial situation. Currently, their balance sheet contains $301 million in cash and just $3.81 million in debt exhibiting a high coverage ratio. They also operate at margins much higher than most of the restaurant industry with a profit margin of 9.43%. Average restaurant sales have stayed somewhat consistent over the past three years with a very slight increase to about $1.8 million, but restaurant and company level margins have been increasing consistently since 2005 with restaurants now operating at a 26.4% margin. All this has lead Chipotle to believe that they will open about 140 new restaurants in 2010 which is a significant jump from the 67 openings in the year ending September 30, 2010.
Chipotle is unique in the restaurant business for several reasons. First it has a very distinct plan for its ingredients. In 1999, Steve Ells started Chipotle’s emphasis on A Food With Integrity by serving naturally raised pork in 2000 and naturally raised chicken in 2002; now 100% of Chipotle pork and chicken is naturally raised. In 2004, Chipotle also started using zero trans-fat frying oil. Emphasis was also put on naturally raised beef in 2009 and so now 85% of beef is naturally raised and by 2007 all sour cream and cheese products were rBGH-free. Ells crusade for more humane and
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