Strategies and Tactics
In determining strategy and tactics, it is good to look at the overarching strategy of the marketing objectives for Chipotle before delving into the tactics involved.
Looking at increasing net margin by 3% in 2018 for Chipotle, Chipotle will need to push through the negative media attention they have received and once again become a much more competitively advantageous company. Chipotle should take a look into their day-to-day businesses and costs associated with that business. One notable fact about Chipotle is that they do not offer franchising opportunities. Franchising is a great way to revitalize business, especially in Chipotle’s current condition. However, since Chipotle is still not looking into franchising, they can look at reducing operating costs for
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They have focused more on “owned media and visible event strategies.” This is a good way to gain the attention of healthy bloggers, or parents trying to keep their family eating healthy, while living a busy lifestyle.
Overall, Chipotle has a good idea of their customer segmentation and how to position their brand. Even with their issues recently, Chipotle has continued to gain back their loyal customer base and keep their products relevant in the millennial sphere.
Push and Pull Strategies
Since Chipotle's main consumer target is millennials, it is more important to utilize the "pull" marketing technique, rather than the “push”. The “pull” technique focuses on “creating reasons and ways for consumers to find products,” using social media or social networking. Chipotle’s ads on Facebook and Twitter are able to reach a different demographic than widespread ads on the television networks would. Using topic keywords and online search optimization, Chipotle can directly influence the decisions of consumers using social media to gain information on restaurants. (Dontigney,
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.
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.
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
...ring process which has strict standards and allows owner/operators to hire only the best candidates. Due to this fact, Chick-fil-A employees are the most respected and well trained in the industry and are a model for what other companies should strive to attain. All of these factors have lead to a very loyal customer base for Chick-fil-A. Most of Chick-fil-A’s customers have nothing but positive things to say about the company and local units. Many of Chick-fil-A’s customers want to share the great experience and regularly invite friends and family to visit a Chick-fil-A location. Chick-fil-A has created a brand and corporate image that customers have responded well to. Chick-fil-A’s smart business decisions combined with a growing and loyal customer base suggest the company has positioned itself well in the market and can expect to see continued growth in the future.
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
Control systems – Costco has an Enterprise Facility Information management system, each Costco is connected to corporate, the EFIM provides real-time information, management of control systems (like energy), and an inventory management system that allows suppliers to monitor their own stock levels at any Costco. The EFIM reduces costs related to energy consumption, maintenance, and contracted services
Chipotle is continuing to stay ahead of the curve and putting their focus now on the sustainability and farm to table concepts that are continuing to gain in popularity.
Similar to a fast food restaurant, but more upscale with a better dining experience. Ells idea of keeping the menu simple with limited items to prepare delicious food efficiently helped to create a kitchen different from other fast food chains. Food preparation areas in Chipotle’s kitchens are similar to those of fine dining restaurants. Menu items are prepared from scratch and with fresh ingredients. Even the meats are prepped with marinades. Creating such recipes is very labor intensive, but having limited items to prepare assists in keeping the cost down. The focus on menu integrity is one of Chipotle’s advantages and is a key element to their marketing strategy. One way Chipotle is able to control their ingredients and maintain menu integrity is by controlling their suppliers. After working with certain suppliers, they created a list of approved vendors for the individual restaurants to purchase from. One reason was to try and help control costs. Healthier food items cost more and Chipotle wanted to keep the cost of their meals low for their customers, so they built relationships with certain suppliers. Eventually, they began to use distribution centers across the country that only purchased ingredients from their approved suppliers (Gamble, Peteraf, & Thompson, Jr., 2015). This approach separates Chipotle from competitors like Taco Bell. Serving high quality food at a competitive price point against other fast food
Chipotle created a new niche of fast food restaurants reclassified as fast casual, bringing fresh food made with raw ingredients to the masses in a short amount of time. On an initial 85,000 dollars family investment, Chipotle has evolved into multi-billion dollar corporation. In 1998, McDonald’s made minority investment $ 360 Million dollars in the company and by 2001 they had grown to be the Chipotle’s largest investor. McDonald’s investment had allowed Chipotle to take advantage of its market and significantly expand. In 2006, Chipotle went public setting stock market records, gaining capital for growth, therefore paving the way for McDonald’s to divest and opt out with $1.5 billion dollars. Over the past 20 years, Chipotle’s market power has increased despite conventional barriers of entry. For instance, particular challenges that include barriers like regulatory rules and regulations (i.e. Licensing) can affect the operation of an organization. Chipotle is company owned and does not franchise. As per Chipotle, "keeping in good faith with their mission of Food with Integrity." (Chipotle, 2017) The company abides by the set guidelines of the government regulation of treatment of animals and the use of drugs in the food, which are essential input barriers on meat, dairy, and fresh produce products. The overall controls of these necessary
Chipotle set a goal to adopt proactive approach to go beyond the industry norms and make a change to the food source, to be 100% natural, meaning that animals are free of hormones and antibiotics and their diet is vegetarian. It was almost unprofitable to switch Chipotles entire menu to 100% natural overnight. Chipotle adopted a “moving money” approach, which enabled the company to make a profit and at the same time improve the quality of the food that customers would value. From 1999 until 2007 the company was able to source 60% of the beef from naturally raised supplier, and it reached to 100% in 2013. Similarly, for chicken supply, it took Chipotle 11 years (from 2002 until 2013) to reach to 100% natural. Another effort for green marketing was to eliminate trans fats and purchase black beans from certified organic suppliers. With tremendous efforts and dedication in 2010 the company was already able to purchase 60% of the black beans from organic
...ealthy options on its menu, however this weakness could also be an opportunity as there is an increasing trend for healthy food options and McDonald's could turn this opportunity into a strength if it introduces a healthy burger. As previously analysed McDonald's isn’t competing with its competitors in healthy fast food and hasn’t tapped into the health food market which is a major opportunity for the company. Currently 28% of customers deciding on which fast food chain to visit consider whether a healthy option is available to be a major factor when deciding (EMMA Report, 2014) and if McDonald's can cater to this decision factor then they can appeal to the customers values and increase its market. McDonald's can use its strength in its advertising to introduce this new healthy product and reach a large audience in promoting the healthier choice that is on offer.
For recent years, Chipotle has already raised prices for several times to make up the expected costs. The competitors who use conventional raised meat can even achieve half price of the same products of Chipotle. Cheaper prices do provide a great incentive for customers to purchase, however, the overall quality and taste of Chipotle still has competitive advantages. The idea of food with integrity differentiated Chipotle from other competitors. In the meantime, Chipotle already got the brand identification building up high switching costs.
The fast food industry for example, McDonald, Domino Pizza, Dunkin, Starbuck, Wendy's, Papa John, Burger King, YUM and so on. All of this company is a monopolistic market. This is because these fast food companies fulfill the characteristic of monopolistic. The number of firms in monopolistic is less than perfect competitive market, but larges than the oligopoly market. The fast food industry is the franchiser, no all people able to open this franchise company in the market because need a larger money to buy the product brand name. For example the costs of starting an entirely new McDonald's restaurant can be anything between RM2.0 million to RM4.5 million. The costs also depend on the restaurant size and type, its location, style of decoration and landscaping. (Appendix 6.1)