Dear Mr. Ells and Mr. Moran, 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 valued as a store that serves “food with integrity.” With a unique appeal, a healthy and delicious product, and a powerful social message that made our target customers feel great about eating Chipotle over more traditional fast food, we have pioneered the fast-casual restaurant model our customers admire. Furthermore, our food sourcing is a rewardable effort and it is what we and our customers respect.
However, Chipotle’s health crisis shows fresh food comes at a price. Consider the following:
• The E Coli outbreak was because of Chipotle’s food chain. Incidentally, when your business model is built upon the idea of serving local fresh food, often with the promise that it’s ethically grown and sourced, your supply chain becomes more complex. Consequently, more complexity means more risk. Chipotle is walking a narrow line between offering “food with integrity” and the risk of introducing foodborne
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When Chipotle was revealed as the source of multiple outbreaks of illnesses that sickened nearly 600 people in 13 states in 2015, it came at a significant cost. We closed stores, spent several months under investigation by the CDC and other health organizations, and we faced a criminal investigation in connection with the incidents. With significant decreases in same store sales, operating margins as well as a 44% drop in our net income for the final quarter of 2015, it is evident that this crisis plunged Chipotle to a never before seen depth.
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.
Most of them reported eating food from Chipotle within the week before their symptoms began. Twenty of those individuals have been hospitalized.
Simpson, S. (2015). Chipotle Mexican Grill Inc.: Strategy with a Higher Mission or Farmed and
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
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).
“Subway says boosting sales at existing restaurants is its biggest priority right now (Peterson, 2015).” From 2012 to 2014 Subway saw a decrease in sales and realized some of their competitors like Chipotle were making more money. How were they making more money? Well Chipotle starting advertising with antibiotic free meat. Just recently Subway decided to follow the trend and do the same, at the beginning of 2015 Subway started advertising antibiotic free meat. The restaurant has already seen a drastic increase in profit. Once Subway and Chipotle put these antibiotic free labels on their food they quickly received more interest in their restaurants. This leads to the fact that the American consumer is not very educated about not only where their food comes from, but also how it is processed. These restaurants should not be getting rewarded with an increase in profit for providing the consumer with false information; in order for this to stop people need to realize they are being taken advantage
Even though there are more than 1700 Chipotle locations around United States, Canada, United Kingdom, Germany, France, all of Chipotle's restaurants are company-owned, rather than franchised. Chipotle insisting on company-owned is an effective way to take control easily and ensure the high quality of food products. This is seen as a smart move because experienced individuals run all of the restaurants.
The company is based on the principle value of building a food culture where people can learn about changing the way they think about and eat fast food and a people culture where young leaders can grow organically within the company. Yahoo! Finance (2014) discusses Chipotle’s success through the loyalty the company builds from the people they serve. Earnings in 2014 were over 29% in cash flow with stock reaching $529. Revenue for the company peaked at over $4 billion with growth estimates at over 22% of earnings (2014). The success of Chipotle has been based on the fundamentals of the company’s vision which is to create a sustainable team of top performer who are empowered to achieve high standards and an emphasis of serving only naturally raised meats and organic
Operations: Chipotle has set standards from when the food is bought, to when it's produced and to when it's sold. This quality control is performed by their Quality Assurance group, which foresees all of these positions.
Any Chipotle I have always gone to have always had good service. Their employees are great. There is never a sour moment when you ask for anything, they are always kind and welcoming. I am always greeted with a hello and a smile when I step up to order. Even if the employee serving you has had a bad day it never shows, you would never know. Despite the lines being basically out the door every time you come (which is the only downside to coming here), the wait time can give you a headache. It is worth it, because Chipotle for sure serves fast food; they usually have three employees working to serve the food. One to get what you order prepared, one to add what extras you and to finish packing it and one to cash you out. The menu is very easy to read and figure out what you want. They have all of the print on the menu in white and big font so it makes it simple for everyone to read. So there isn’t any trouble ordering what you want. They have many different options to choose from as well. You don’t always have to get the burrito.
E. Coli and other foodborne illnesses are something that should be of major concern to everybody, becasue nobody is safe from it. It is not something that can be prevented or
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
Chick-fil-A recognizes that their brand promise starts the minute the customer enters the premises. When a store opens for the first time, the franchised operator doesn’t just see an opportunity to sell his food product, but rather a “chance to interact, build community, and engage with customers and the community at large. We do this in a variety of ways. First and foremost, we strive to provide 2nd Mile Service to each customer. As we work to continuously improve, we want customers to experience something unique. We want to build community and create relationships between our customers and our food, people and restaurants” [3].
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 Mexican Grill is one of the most popular Mexican restaurants in the United States, which offers burritos, bowls, tacos, and salads. It is one of my favorite restaurants to visit.