Conscious Capitalism by Serving “food with Integrity”

Thau Luu

Professor Jasso

MGMT 449

February 22, 2019

Chipotle Mexican Grill, Inc.: Conscious Capitalism by Serving “Food with Integrity”

        Chipotle is a restaurant chain in the fast-casual segment focusing on serving food that is organic. Steve Ells, the creator, Co-CEO, and Chairman of Chipotle Mexican Grill, makes the restaurant to start serving food of which it describes as “naturally raised meat” or “Food with Integrity” and the idea become a main mission of the business. Chipotle opened its first location in 1993 and the business model was simple: show that food served fast didn’t have to be a “fast-food” experience. In over twenty-four years of operation, Chipotle has over 2000 location in 2016 and it has over 60,000 employees that are trained to deliver excellent and quality services to the customers. In addition, Chipotle also made sure to deliver its mission by providing natural product with higher quality. The business has been maintained and build lasting relationships with their customers. The business has an effective strategy resulted in a steady growth and increase in revenue during 2012 to 2013. Under the leadership of Ells, Chipotle has grown at a sustainable rate that set it apart from the increasingly competitive restaurant industry. At the same time, Chipotle is still facing few business obstacles

Issue/Problem Identification

        The fast food Mexican segment is dominated by three restaurant brands: Chipotle, Qdoba, and Moe’s. It’s also important to look at Taco Bell, which currently has 49% of the market share of this segment. As the fast-casual market is becoming increasingly competitive, Jack in the Box’s subsidiary, Qdoba, enter the same market segment and it is challenging Chipotle. Without including local Mexican restaurants, there are many growing fast-casual restaurant like Rubio’s Coastal Grill, Boloco and Moe’s Southwest grill and they are put up their branches across the U.S. They are also considered as a competitor to Chipotle and decrease profit potential for Chipotle. Chipotle expected to maintain its high growth rate and its profits according do their annual forecast, the market of fast-casual also increasing and moving to the maturity phase. Chipotle also does very little national marketing and advertising. Chipotle mostly uses word-of-mouth publicity from customers to share their message, but they are missing a large market share from consumers who have never heard of Chipotle. Another issue that Chipotle isn’t building up enough brand awareness of its key competitive strategy: high quality meats and vegetables.

Stakeholder Analysis and Management Evaluation

        The stakeholder in this case are mainly Chipotle’s competitors because almost all competitors provide similar products in a similar service line. The restaurant has been successful and become the leader in the last-casual chains over the years, however, the case points out that there is a possibility of growth in fast-casual chain which can cause a hard time for Chipotle to maintain its position. Increased competition cause Chipotle’s share to be at a high risk and it can lead to decrease in profits. Chipotle come up with a strategic decision which can decrease their competitors, or it can decrease competition. The second factor is customers and it is the key factor that affect the most to Chipotle. They are trying to build a unique experience with their customers as well as expanding their market. They are creating a unique menu that enable customers to select the ingredients they wanted and the business promise that the order will be ready to be serve in two minutes after the customers ordered. Suppliers are also a big factor in the success of Chipotle. Supply chain also play a big role in the success of Chipotle. A major threat that Chipotle faces is the volatility of crop yields and their prices. This has made the restaurant to purchase those products at a high price which hurt their financial.