Swot Analysis : Chipotle, Chipotle

Chipotle Mexican Grill is a fast casual Mexican Restaurant that operates from the United States. Although the restaurant is specifically segmented to the fast casual Mexican restaurant market, it does not simply operate in this realm. Chipotle is also successful operating in the restaurant market as well. According to the Trefis Team (2014) Chipotle Mexican Grill has managed to take market share from restaurants in the fast food industry.

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

During his visit, Ellis learned that raising livestock without traditional farming practices produces better tasting meat. After discovering this, Ellis wanted to serve food to customers within his restaurants that are only organically produced by suppliers who conduct humane sustainable practices with their animals. The growing concern for where the company food comes from and how suppliers grow their livestock and crops caused Ellis to create the company’s philosophy “Food with Integrity” to guide future company operations. However, the company quest for having a higher quality of food comes at a higher cost in food supply. In order to offset these costs, Chipotle raised the price of some of their meat items by $1 or $2 (Pederson).. Sales continued to rise to a total of $131.6 million besides the sudden price hike because customers could taste difference in their food and loved how the company changed their recipe. In 2005, McDonalds decided to sell their stake in Chipotle and focus on their core business operations. The next year, the company became public and sold 7.88 million shares on the New York Stock Exchange (Pederson). Since ending their relationship with McDonalds, the company has been able to open over 800 stores including one Toronto, Canada during the year 2008. Expansion of new stores caused sales in 2009 to increase 14 percent to $1.52 billion and

Chipotle’s strategy is focus on the selected menu that they can provide best to the customers. Also, differentiate with other fast food restaurant such as Taco bell. Chipotle’s competitive advantage is related with the differentiation. They are in the fast-food market, but offer fresh, local produced ingredient and no hormones added to their meat and other dairy products. Therefore, customers who seek integrity, they will go to Chipotle for Mexican fast food.

Steve Ells started Chipotle in 1993, and expanded the chain to over 400 stores within 12 years. Chipotle is supported by the financial power and sprawling distribution network of owner McDonald 's Corp, and is the largest Mexican-style concept among a number of fast-casual competitors that also have been picked up by quick-service companies in recent years (Peters, 2005).

“Food with Integrity” is the slogan of this restaurant chain; which is a rather new food stop of the time. Chipotle is a higher-end, fast food restaurant found in higher class neighborhoods. It is personally my favorite fast food restaurant and I would highly recommend it to anyone who would like to sink their teeth into some fresh, juicy, Mexican food.

Chipotles reputation and product were nothing short of stellar. Attracting customers from all walks of life but primarily from the millennial generation. The millennial generation tends to like simple, fresh food without artificial flavors or fillers from environmentally friendly restaurants. Chipotle in turns targets the millennial generation as one of their main stakeholders. For a time, the symbiotic relationship between Chipotle and the millennials thrived. The relationship almost proved to break Chipotle when a crisis of a massive Escherichia Coli (e. Coli) infection breakout occurred affecting the millennial generation the most. A drop-in Chipotles comparative sales has

coli, but of those 60, 22 got so sick they had to go to the hospital. Having such an outbreak that affected so many people and made many sick would be detrimental to any company within the food industry. It is even more detrimental for Chipotle because of the image that they had created for themselves. They pushed to their customers that they were the best when it came to fresh ingredients, and a lot of people bought into that. According to Berfield (2015), Chipotle’s marketing efforts they made sure that consumers saw the “evils” in industrial agriculture that other fast food places use to get their ingredients.

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.

Overall Chipotle’s financials look good, however their VIRNE shows that they lacking in rare, inimitable, and nonsubstitutable products in their business model. The competitive strength analysis leans heavily in their favor, with Chipotle scoring high in all four of the KSF categories; beating Taco Bell by 2.9, Moe’s by 0.8, and Qdoba by 1.2. For Chipotle’s go-to-market strategy I recommended that a few things that they could work on are: focus more on food costs, and less on focusing on the organic food market, however that would harm the brand that they have built as being “Food with Integrity”; focus more on their other restaurants: The Shophouse and Southeast Asia Kitchen; however, they would then run into new competitors, such as Panda Express; as well as expand their current menu, possibly adding breakfast, this is probably the most feasible for Chipotle right now because of cost, and it was actually discussed in 2014.

Integrity means doing the right thing even when no one is watching and that is a golden phrase that I have been taught ever since very young so by us using integrity at Chipotle as our philosophy, I believe, puts us in a golden position as a company. The interesting part is also that the founder of Chipotle, Steve Ells, enjoyed cooking shows over cartoons when young. Then after graduating from the Culinary Institute of America of New York, and enjoying burritos from taco places decided he could do his own but with a mix of different ingredients. In this way, I think it really is a great way to inspire customers to think back on a topic they enjoyed and know that they can move forward with it if they choose to.

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.

Changes in customer preferences, general economic conditions, discretionary spending priorities, demographic trends, traffic patterns and the type, number and location of competing restaurants have a moderate effect on the restaurant industry (Chipotle, 2010). One example of customer preferences being a driver in the industry is the “Whole Food-ism Movement” which has put a large focus on organic, antibiotic-free, and non-processed foods (Mansolillo, 2007). Consumers now look for healthier options when eating and an overall healthier lifestyle. Chipotle has been able to benefit from this movement by carrying on their “Food with Integrity” mission (Chipotle, 2010).

The last core competency of Chipotle is special people culture, which builds loyalty and enthusiasm for the Chipotle brand between customers and employees. Chipotle’s crew consists of friendly, high – performing people motivated to take good care of each customers and empowered to achieve high standard. They are trained to make every effort to respond positively to customer requests and suggestions in order to deliver great customer – pleasing

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.