Chipotle is a company, with a simple idea: “demonstrate that food served fast doesn't have to be a "fast-food" experience.” (Chipotle, Investor Relations) It is this positioning point of difference that this paper will bring into question. Chipotle’s brand, centered around “food with integrity” – promotes healthy, organic eating, properly prepared fresh food and transparency allowing consumers to feel trust and safety in the company. A brand exists in the mind of the consumer; therefore Chipotle’s constant reminder of its core benefits reinforces the firms strengths. It is understood that the product must be different from competitors on one or more dimensions that are meaningful to customers in the target market. (Darden Business Publishing). …show more content…
These selections can range from meal-time, to price, to size and consumers respond well to this variety. Fast food customers do not blink an eye at ordering a sausage McMuffin from the breakfast menu with an extra large orange drink. Chipotle, on the other hand offers a more limited menu. If we take the burrito for example, which is one of only 4 main entrees, it comes one-size and at a pricey (by fast food standards) $9.00 (guacamole is extra!). Chipotle items can only be ordered after 11:00 am, this completely removes them from the breakfast market which many of their fast food competitors are capitalizing on. While they do have a children’s menu, the variety there is scarce. Or, does Chipotle consider their competition other fast casual restaurants? This is a much more appropriate comparison because Chipotle much better matches the characteristics of a fast-casual environment in regards to their service format and meal …show more content…
Moe’s is another fast casual Mexican chain, whose business model very closely resembles Chipotle’s. If one were to walk in to Moes, they would also notice no microwaves, and even food being freshly prepared behind the counter within the customer’s view. It portrays the image of being transparent like Chipotle. However, there is a distinctly different feel when you walk into Moe’s compared to Chipotle, from the bright colors to the people whom frequent it. It feels much more like a fast food chain than a fast-casual restaurant. Nevertheless, a quick Google search of “which fast food chain is better” will generate several opinions by noted media like CSNBCnews, BusinessInsider and Fortune. It quickly becomes clear that Chipotle may not think like fast food or act like fast food, but what they are serving, consumers aren’t getting. The confusion within Chipotle’s point of difference may be linked to its confusion identifying the true competition. If a brand is a promise understood by the customer, and Chipotle’s stakeholders understand the company as a fast food chain, does that negate the positioning it’s putting
New restaurant openings and comparable restaurant sales increases are important factors contributing to Chipotle’s increase in revenues in recent years.
Simpson, S. (2015). Chipotle Mexican Grill Inc.: Strategy with a Higher Mission or Farmed and
The fast food restaurant industry, which includes quick-service and fast-casual restaurants, is highly segmented with the top 50 companies accounting for only 25% of the industry’s sales. The $120 billion industry includes over 200,000 restaurants with 50% of those specializing in hamburger entrees. (hoovers.com 2008) The major competitors in the industry include McDonald’s, Burger King, Taco Bell, Subway, and KFC – Chick-fil-A’s major competitor in chicken sales. Chick-fil-A’s unique position in the market, specializing in chicken-based entrées, has lead to a competitive advantage which the company has been able to capitalize on. Recently, many competitors have added chicken entrees in order to compete in the market segment. Through marketing strategies and company initiatives, Chick-fil-A has tried to stay distant from competitors, offering a fresh alternative to the ordinary fast food restaurant.
As you know, Chipotle values our “food with integrity” promise and our customers respect that. However, the recent E Coli outbreak has caused Chipotle’s financial performance and reputation to suffer significantly and staying with our current business model is not our best option. Therefore, I recommend we rebrand and reposition Chipotle to ensure our long-term success.
Chipotle is classified in the restaurant industry as fast casual, a combination of the quick serve and the casual dining segments. Fast casual restaurants have the following attributes: high quality foods, upscale atmosphere, higher check averages between $7-$11, and pay at the counter (What exactly is fast casual?, 2008).
... restaurants. It is company owned restaurants rather than franchised and has more than 1600 locations all around the world. Its mission statement is to serve “Food with Intergrity” which means that they use organic ingredients and serves more naturally raised meat in comparison to other restaurant chain. Chipotle was founded in July 13.1993 by Steve Ellis in Denver Colorado. It has more than 45000 employees. It is committed in serving safe, high quality food to the customers and its values the individuality of their company, their employees and their customers. They believe that the automated cooking techniques make them apart from other restaurants and they produce great tasting food with an efficiency that enables them to compete effectively.
Chipotle attempts to use the fourth dimension of corporate culture by adding components to continue to attract and retain employment while enhancing the lives of Chipotle’s staff. This is exemplified by their recent addition of a wellness program to keep their employees happy and healthy while saving them money and giving Chipotle a competitive edge over competing restaurants (2015a). More evident to their customers, Chipotle demonstrates their commitment to this aspect of their corporate culture by continuing to prove their commitment to the quality of their product. It is common for Chipotle to remove items from their menus because they are attempting to find better ways to provide quality ingredients. These actions are clearly in alignment with the need for culture to grow with a corporate commitment to change or innovate. In spite of their efforts, the company may have areas to improve to retain a competitive edge in the marketplace and deliver quality to their customers, especially after procedural and health issues that were recently
In 1998, McDonald's invested in Chipotle and helped grow the business from 16 restaurants to over 500 restaurants by 2005, when McDonald’s separated from Chipotle completely (Daszkowski). In 2007, the company went public and as of the time of this report, the stock currently sits around $284/share (CMG). When Chipotle was hit with the E. Coli outbreaks in late 2015, the stock price and overall revenues of the company took a nosedive. The CDC identified thirty-seven cases of E. Coli in eleven different stores across Washington and Oregon (Daszkowski). As a result of these outbreaks, and due to a 2016 class action lawsuit by over 10,000 employees claiming “wage theft”, Chipotle’s financial future is still uncertain. The 2016 year-end financial report states that Chipotle had revenues of $3.9 billion and made a net income of $22.9 million (Chipotle
Time, there never seems to be enough, which is why many people choose to eat out rather than eating at home. The fast food industry has many options; between the options are many similarities and differences that people seem to overlook. Going in depth to comparisons and contrasts between restaurant chains can be very insightful. Two of the most competitive restaurant chains are Chipotle and Qdoba; both companies are well-known and often compared, but are different from each other as well.
You can choose from three things on the menu when you’re deciding on an order. There is...
When Chipotle first opened in 1993, the goal was to serve quality food fast, but not be considered “fast food.” To avoid falling under the fast food stigma, Chipotle strives to find the best ingredients with respect to animals, farmers, and the environment. In order to achieve these goals, Chipotle has created a matrix organizational structure that is divisional by location and functional by authority. Chipotle recently expanded internationally to the United Kingdom, Germany, and France, each following strict guidelines assigned by corporate employees from their headquarters in Denver, Colorado. Similarly, each location is functionally organized according to authority: regional manager, district manager, store manager, assistant manager, and
We can all agree that each of us have our own particular favorite fast food restaurant. The fast food industry has really opened up and added a variety of food that you can quickly grab on the go. This makes it hard for the average American to ignore, because everyone is looking for the quickest and simplest ways to get things done in this fast paced
Pace is owned by Campbell Soup Company, and Old El Paso is owned by General Mills, both huge food manufacturers. In order to avoid brand parity with these big brands, Hector’s company and product need unique characteristics to give patrons a reason to buy Hector’s products. Both, Old El Paso and Pace, are not authentic companies because huge corporations run them (General Mills is located in Minneapolis, Minnesota; Campbell’s is located in Camden, New Jersey). Hector needs to capitalize on the fact that his salsa is not only superior but also authentic Mexican food. Such a product doesn’t seem to exist on the market yet. Thus, Hector could operate in a niche market of customers buying high quality, authentic salsa. Also, both major competitors do not focus on salsa. Hector has a salsa with unique texture and taste. A product with different features helps to avoid brand parity with
Its restaurant culture is structured around bringing good quality service to customers much like what you would find in fine dining restaurants while providing food fast. Besides its food and service, Chipotle’s advertisement strategy is less conventional than its competition. Chipotle relies on customers to share their experience with other potential customers instead of spending profits in general advertisements while their competition relies heavily on television advertisements to promote their menu products to customers. This strategy has allowed Chipotle to make better use of its resources to find local farmers that meet the company’s vision in providing “Food With Integrity” (Chipotle Mexican Grill Inc., 2015).
Lack of seasonal variation – McDonalds offers the same menu 365 days a year. During the hot summers, consumers may want something that fits to the climate. While they do have ice cream and frozen drinks, there is a lack of variation. An introduction to items that are only available for different seasons could force a change.