Portillo's Case Study

Chipotle’s operating income increased from $108.2 million in 2007 to $532.7 million in 2013. This produces a CAGR of 30.43%. Rising market prices for natural meats and organically grown ingredients led to Chipotle’s rising costs for food and beverage from 31.9% of revenues in 2007 to 33.4% in 2013 and a CAGR of “only” 30.43%. Besides the operating income, the operating profit margin increased almost every year (10% in 2007, 13.4% in 2009, 15.7% in 2010 and 15.4% in 2011). In 2013 Chipotle had a profit margin of 16.6%, while in 2012 the profit margin was 16.7%. This effect should not be exaggerated, as the total revenue and operating income in 2013 was still higher than the total revenue and operating income in 2012. In addition, the net income almost quintupled from $70.6 million in 2007 to $327.4 million in 2013, generating a CAGR of

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

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.

In response to backlash from customers and investors, CEO Ells took a step in the right direction. One of Chipotle's first steps in resolving the crisis was parting ways with Co-CEO Monty Moran. The image that Moran portrayed of Chipotle did not reflect successful leadership, nor did it reflect their values. After making the move to part ways from Moran, Chipotle’s stock rose 5% (Carr, 2016). Investors felt that this was the first step in gaining their trust and confidence within the

Despite adversity, the company continues to blow the competition out of the water. "Chick-fil-A has gained a loyal fan base for all the ways it has said no: to working all weekend, to expanding too quickly, and to abstaining from the testy religious talk most big businesses avoid" (Harwell, 2014, para 3). The only perceived threat to the organization is almost five years old, the same-sex marriage debacle, and the company is still growing strong. The company has been working diligently to repair public relations by communicating that the owner's personal views are not the brand's, which believes in serving everyone with honor and respect (Davis,

With the right ingredients, speed, quality and leadership, Chipotle has reinvented the fast-food business. Serving food with integrity has produced big profits.

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

Chick fil A is a unique company and is clearly different from most fast-food restaurants; employees are kind, helpful and maintain a clean environment no matter where they located. As stated previously Chick-fil- A’s corporate purpose is constructive in addition it emphasizes their culture “To glorify god by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come in contact with Chick-fil- A.” (cite) This statement truly shows how the company’s leadership has created a culture where service is just as important as profit. The emphasis of this section of the paper will be to research while also analyzing how Chick-fil-A makes people a priority and how doing things in an uncommon way has certainly helped Chick-fil-A create a strong culture as well as a successful business.

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.

Due to economic downturn the strength of the buyers’ power has increased as the industry looks to gain consumers with pricing strategies much like those of McDonald’s “Value Menu” and combination meals even though the cost of commodities have gone up (James, 2010). Customers of QSRs are looking for quality food without high costs. While Chipotle does not have a value menu or offer any type of combination meal much of their success is due to the fact that the customers are willing to pay a higher cost for higher-quality (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,

It seemed that he was faced with an overwhelming load of problems from Chiquita’s past, but he quickly decided on the best way to fix it. He told CEO Magazine in 2007, “[Chiquita’s] key challenge is to control costs while supporting innovation efforts. Cost-saving programs have not been nearly enough to offset higher industry and other costs.” He said also that “the second challenge is to remain agile in a competitive, fast-paced marketplace that is characterized by growing consumer expectations […] and that in order to strengthen the […] power of the brand, [they] are developing strategies based on consumer brands for healthy, fresh foods and focusing on diversification and innovation” (5). He made it clear from the beginning that Chiquita would be transitioning from the low-margin operations to a company that produced more value-added products. Also, that they would begin to maintain an excellent record of food safety, quality, management, customer service, and in-store

Chipotle Mexican Grill is an American restaurant chain that currently has more than 1700 locations, with most of its locations in the U.S. and several in Canada and Europe. Chipotle has been gradually expanding its international presence since it opened its first location outside the U.S., in Toronto in 2008 (International Strategy, 2015). The restaurant now has 17 locations outside of the U.S. including locations in London, Paris, and Frankfurt. However, like all other international corporations, Chipotle strives to grow its business even further and extend global awareness of its brand. The next step in Chipotle’s global strategic plan would be to venture into new waters and enter Asia. Hence, Chipotle is now analyzing the decision of expanding operations into China.

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.