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).
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Chipotle specifically compares their “food served fast” to “not a fast food” experience. Therefore, we can question the competition; is it fast food restaurants or is it the faster casual restaurants? Without a clearly defined position in the market there becomes some concern as to the longevity of the brand. If we compare them to fast food restaurants, such as McDonalds, we see that almost all fast food establishments today feature a variety of consumer selections.
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
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costs. One could argue that these differences make Chipotle’s positioning stronger than the primary competition, namely Moe’s.
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
forward? Ethical Food for the Long Run? Chipotle prides itself in providing high quality food and locally grown food. However, Chipotle’s brand has recently taken a hit is because of its decentralized supply chain which consists of locally grown food from vendors who may not meet the latest food safety measures. The core of Chipotle’s brand promise, the freshness of its locally-sourced ingredients, has now come under extreme scrutiny and its reputation is more at risk than any other brand in the “fast-served food” industry. This is clear example of the damage that can happen if the brand promise is not kept. Chipotle’s brand promise has created a conflict of interest. Chipotle promises the use of non-GMO foods from local vendors but, all fresh food obtained from this supply chain may not always be healthy. This conflict may lead to the need for Chipotle to leverage a centralized supply chain. As Chipotle works to repair its brand image and strengthen its brand promise it will be interesting to see how it sources its ingredients whilst complying with its brand promise of meeting the latest food safety measures and preventing further outbreaks. With these necessary adaptations Chipotle is at risk of adapting a business model the more closely resembles their true fast-food competitors. Long term, this positioning may become obsolete as the real fast-food giants gear up to address this newfound competition. Because one thing is for sure, consumers going in to Chipotle looking for a fast food experience will be in for a surprise because it certainly is not fast food, today. And perhaps, that’s not a bad thing!
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.
New restaurant openings and comparable restaurant sales increases are important factors contributing to Chipotle’s increase in revenues in recent years.
1.3 Market Segment 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 food, upscale atmosphere, higher check averages between $7-$11, and pay at the counter (What exactly is fast casual?, 2008). 2.0 Market Opportunity Analysis 2.1 Market Trends The restaurant industry grew to $403.5 billion in 2010, a growth of 2.1% from 2009 (Consumers still thrift when dining out, 2011).... ...
You can choose from three things on the menu when you’re deciding on an order. There is...
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
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.
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 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
... 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.
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.
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
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.