In 1993, Steve Ells’s passion for the culinary arts led him to open the first Chipotle Mexican Grill in Denver, Colorado. Ells had a vision and strategy to operate his own business, and he did not give up until he achieved exactly what he wanted. Ells’s strategy was established on five elements including: a focused menu, high-quality, operation efficiency/interior setting, friendly people, and awareness and respect for the environment. Taking off rather quickly, and maintaining popularity helped Chipotle climb to the top in the fast-casual segment of the food market.
Despite their ever-growing popularity, there were still plenty of problems that Chipotle Mexican Grill would face. The first problem the company will foreseeably face will be the
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significant presence and revenues of rival restaurant chains such as: Qdoba, Moe’s Southwest Grill, and Taco Bell. Though it appears Chipotle is in good market standing, circumstances can change rather quickly. With Qdoba and Moe’s offering nearly the same food options, it increases the intensity of competition, that could lead to squeezing profit margins. This also goes to show that what Chipotle serves, and how they serve it can easily be copied, making the barrier to entry low. The second problem the business will have to plan for is that they have a significantly smaller menu than their competitors. When comparing menus, it is clear that Chipotle is operating at a disadvantage where variety is concerned: • Chipotle Mexican Grill: Burritos, burrito bowls, tacos, and salads • Moe’s Southwest Grill: Burritos, quesadillas, fajitas, tacos, nachos, rice bowls, and salads • Qdoba Mexican Grill: Burritos, tacos, taco salads, nachos, quesadillas, tortilla soup, mexican gumbo, chips & dip, and breakfast burritos When performing a weighted competitive strength analysis, one of the key factors to be considered is the variety of options a business offers to consumers, and among its competitors, Chipotle came up last in the rankings in that category.
Third, prices for organic foods are on a continual climb upward. With rising prices comes rising cost of operations. With prices steadily increasing in the market for organic items, one should expect to see a rising in the menu prices in Chipotle stores. Using all organic products is great, but it also comes at a greater expense; and Chipotle’s top competitors do not seem to care as much about organic products, in turn, allowing them to charge less for their food, and increase their market share. Although Ells has an excellent strategy for his company, its products and strategy are able to be copied very easily, and it is just as easy to substitute non-organic foods for organic ones to save
money. Finally, promoting from within seems to be working thus far for Chipotle, however it could cause some problems if someone were to want to make major changes. Having a large percentage of upper-level and senior management being promoted from an entry-level position is concerning in that a lot of managers could be friends with people who are hourly employees. This is great when it comes to a company where everyone gets along and has fun together, but it could cause some major problems when disciplinary action has to be handed down; then it could definitely turn into a conflict of interest quickly..
External environment analysis plays an important role in shaping the overall industry. It helps keep the business ahead of its competitors and providing opportunities for implementing innovative ideas. Based on demographic, Chipotle focuses majority of its sales on “Millennials”, who are between the ages 18 and 24. “Serving high quality food with reasonable prices” and the ability to customize your meal with a variety of different options in a fast paced environment is something many consumers are attracted to especially the younger generation. Chipotle’s first restaurant was established in Colorado but now they have restaurants all throughout the United States, Canada, United Kingdom, and so much more, located primarily in urban areas.
The company is driven by a strong set of values, even if some of those decisions increase its costs internally. This is especially the case with the sourcing of its ingredients and meats. In fact, the high-quality ingredients and advanced cooking methods used by Chipotle are second to no other fast-food chain. Among recent developments, the leader in fast-casual dining concepts plans to become absolutely GMO-free by the end of 2014. Although the aim is not new, it shows Chipotle’s commitment to bring fresh ingredients to the table. Besides offering high-quality meals to its customers, the portions are generously sized and the value is unmatched. There are very few places that can fill you up for less that $10 with quality food, and not junk. The triad of fresh, pure ingredients, cutting-edge cooking methods, and tremendous portions gives Chipotle a mouthwatering appeal.
1.1 Brief History Chipotle Mexican Grill was founded in Denver, Colorado in 1993. In 1998, McDonald’s became the majority shareholder; however, in 2006, McDonald’s divested its controlling interest. Chipotle became a public company listed on the New York Stock Exchange in 2006. It currently has 1,083 locations across the United States and Canada. In May 2010, Chipotle expanded into Europe, opening their first restaurant in the United Kingdom.
In recent years, it is not even necessary to turn on the news to hear about the bad reputation farming has been getting in recent years. With the media focusing on things like drugs in animals and Pink Slime, or Lean Finely Textured Beef, it is a wonder that people are eating “non-organic” foods. However, many pro-farming organizations have been trying to fight back against these slanders. Still, the battle is not without heavy competition, and a good portion of it comes from Chipotle, a fast food Mexican restaurant that claims to only use completely organic ingredients in their food. Chipotle is constantly introducing advertisements claiming to have the natural ingredients, while slandering the names of farmers everywhere.
Chipotle is my favorite place to eat. As I am sure it is for other people. Chipotle is a fast food Mexican grill. They are most known for how big they make your burritos. Now it is fast food but it isn’t actually fast, they’re like a restaurant but without the wait. They serve all naturally raised meat and organic beans. So there food is pretty healthy and worth eating. The employees are always nice and it just a great place to eat over all. Chipotle is a great choice for a quick fast food stop because it gives great service, atmosphere, food and value. My experience there is always a good one.
With the ever growing society that we live in today, it is a challenge to uphold a business with conservative values. When attempting to accommodate all stakeholders, taking a conservative approach can be very limiting. As conservative companies expand nationally and internationally, they face the challenge of needing to appease a wide range of customers that hold different values. With that being said, Chick-Fil-A has become a very controversial company in the past years with questionable ethical decisions pertaining to gay rights.
Steve Ells founded Chipotle in 1994. When the company first opened its first restaurant, their model of business was a first of its kind. They operated a restaurant business that lies between fast food restaurant and fine dining. The management of the company pride in providing the customers with food services in a fast manner without necessarily the customers experiencing the literal fast food services experience (Ragas & Roberts, 2015). According to the company, their services are high-quality fine dining but delivered in a fast manner synonymous with the common fast-food experience. That model of business practiced by Chipotle has come to be referred as casual restaurant business model.
Chipotle competitive advantage or Strengths has come from the ingredients that come from sustainable sources. According to the MarketLine article about Chipotle Mexican Grill SWOT analysis "Chipotle serves food using naturally raised meat (pork, beef and chicken) and dairy cattle... in 2014 the company served over 155 million pounds of naturally raised meat." Chipotle cares for their customers because they are not giving us food that has hormones and addictive substances. Their competitive advantage has changed the company culture and mission Statement nowadays they called it now food with integrity, the idea that their food is made with the respect for the animals and the
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.
Local products from local farmers are used to produce the highest quality products with the healthiest ingredients for consumers within Chipotle. Not only do they strive for better food but also healthier food for the customer. The inspiration for Chipotle starts with Steve Ells and is reflect into the company. Ells even testified in congress in 2009 in support of eliminating the use of antibiotics and hormones in ranching and farming (Ells, 2010). This is reflects back into the Chipotle company through their products and employees which in turn represents their amazing social responsibilities in the food service industry.
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
Chipotle first opened its doors in Denver, Colorado in 1993, setting out to create a new experience for the fast food diner. They put together a simple equation of fast, fresh and high-quality ingredients and looked to change how people viewed fast food forever. Their simplistic approach has expanded across the years and although they still strive for the same fast, fresh and high- quality concept their views have expanded to include sustainability as one of their main pillars.
Chipotle is using to increase operations and strategies used to compete against rivals in the competitive environment. Concluding with an overall evaluation of Chipotle’s business portfolio. Corporate Strategy Chipotle Mexican Grill founder Steve Ells had a vision to “change the way people think about and eat fast food” (Gamble, Peteraf, & Thompson, Jr., 2015). He wanted to create a
With the world’s population continuing to increase, the demand for food is higher than ever. This increase in food demand also calls for more efficient ways of growing and providing the food. Two methods that are very controversial are the organic and conventional method. While many people support the organic method because of its known benefits, others feel that it is an over inflated industry that cheats consumers out of their money. But recently many studies have disproved those critics. These studies prove that Organic food is a better choice than conventional because it is better for the environment, avoids the use of chemicals, and is generally more beneficial.
Burger King delivers value to their customers through their products, prices, and place and promotion strategies - (“BK doesn’t just promise value, they actually deliver value”). Burger king has been in existence for 60 years and is growing rapidly in many other countries. Burger King delivers quality, great tasting food which satisfies ones need or wants and captures the value of customers even before the first purchase is made. Burger King has products very unique from other competitors such as KFC and McDonalds. The difference is that Burger King does not limit their customers in terms of what they eat. For example, when I spoke to a customer also big fan of Burger King, he mentioned that the sauces are left public for the customer to decide on which sauce to have rather than giving the customer one kind of sauce such as McDonalds and KFC. The cold beverage is also self-help service in which customers can help themselves to a bottomless drink. This way the customer feels free to choose what satisfies the need or want.