Chat with us, powered by LiveChat MGMT582 Chipotle Mexican Grill and the Trendy Burrito Analysis | All Paper
+1(978)310-4246 credencewriters@gmail.com
  

Adopt a senior management role for your organization (CIO). Make sure this is clear in the paper.Building on the Assignment #2, develop an improvement area. Based on the area, develop a short list of major project initiatives that your organization should undertake to improve that area. Preferably these initiatives are the real ones in the organization.In your write-up for Assignment #3, make sure you clarify the roles, provide a brief description of the improvement area and the specific projects.https://www.cnbc.com/2018/06/27/3-ways-chipotle-mexican-grill-is-about-to-change.htmlhttps://www.forbes.com/sites/greatspeculations/2018/10/30/whats-ahead-for-chipotle-mexican-grill-after-an-upbeat-third-quarter/#7f172ff6d028
swot_analysis__1_.docx

business_report__group_project_part_1_.docx

Unformatted Attachment Preview

MGMT582_50SU19
May 12, 2019
SWOT Analysis – Chipotle Mexican Grill
Strengths:
● Rapid growth & strong distribution network – Chipotle has grown very quickly in the
years since it went public. In 2006, the company had roughly 570 restaurants, and now
has built a reliable distribution network with over 1,900 restaurants and 53,000
employees worldwide, so it can reach majority of its potential market.
● Financial Strength – Chipotle has reported positive annual revenue and earnings growth
every year since its IPO. In 2016, the company reported $3.9 billion in revenue.
● Strong supply network – Over the years, Chipotle has built a reliable supplier network
that can supply each restaurant with real, fresh high-quality ingredients. This strong
supply network assists Chipotle in responsibly raising the bar because they partner with
farmers, ranchers, and other suppliers whose practices emphasize quality and
responsibility.
● Environmentally-friendly – Chipotle seeks better food from using ingredients that are
not only fresh, but that where possible are sustainably grown and naturally raised with
respect for the animals, the land, and the farmers who produce the food. The company
also focuses on their packaging, utensils, napkins (100% recycled fiber), etc. to reduce
their environmental impact wherever they can.
● Fast & Personal Customer Experience – Ingredients are fresh, but food is made ahead
of time for a quicker dining experience (hybrid between fast-food and casual dining).
Orders are customized by the customer every time for a pleasing and personal experience.
Weaknesses:
● Higher Price Points – Chipotle Mexican Grill prides itself in high quality burritos and
tacos with a focus on all-natural, organic ingredients. Because of this, the price point of
all items on the menu are much higher than the competition. The fast-casual restaurant
has to spend more on ingredients to make the food and thus charges more to customers
while in the store. The loyalists that Chipotle attracts are willing to pay the extra dollars
for their meal, but this could deter a first-time user or shifting loyalists.
● Menu Limitations – Chipotle Mexican Grill has its core products that do not extend
beyond tacos, burritos, bowls, and salads. This corners the company into a hole when in
comparison to direct competitors who offer nachos, free guacamole, and desserts. This
means that the company depends on customers enjoying a combination of four core
products rather than the variety that other Mexican fast casual restaurants have to offer.
● Food and Safety Concerns – The company has had poor reviews and experiences with
poor food and safety. Chipotle works directly with farmers to obtain much of its
ingredients which increases the risk of missing a step-in food safety testing. Because
Chipotle owns all of the distribution methods entirely, the ownership with health safety
belongs directly to the organization. Customers in the past have reported cases of E. coli
and feeling ill after consuming the food at unsafe temperatures.
● Lack of Franchising – Chipotle Mexican Grill does not sell franchises out to individual
owners and holds most of the power at the top of their management level. This allows for
the stores to be uniform but does not allow for geographic specific targeting. No matter
which location you visit, the products themselves, the marketing, and branding is cookie
cutter. This limits the customization of each store individually.
Opportunities:
● Online Marketing Platform – Chipotle Mexican Grill has invested in online marketing.
This online platform has created new sales for the company because customers can
access websites anytime they need a product and allows for “order ahead” service. The
online platform also helps the company to know their customers more and allows for
meal customization as the customers can select what their meal consists of. Technology
helps in the innovation and creativity of the company, for instance, coming up with new
recipes and also marketing the company through websites. It also helps the company to
come up with strategies which will enable them to serve the customers better and to win
their loyalty through quality products.
● International Expansion – Chipotle does have store fronts in Europe and Canada but
focuses most of its efforts in the United States. Chipotle could take advantage of the
desire for Mexican fast casual in additional countries and expand into areas that the
organization does not have an actual presence in at all. This would mark Chipotle as the
leader in Mexican fast casual as many competitors are also localized to the U.S.
● Current State of Economy – Lower inflation rate in the economy is an opportunity for
the company, it offers stability to Chipotle Mexican Grill Company, therefore giving it
the opportunity to thrive in the market. Lower taxation policy in business is also a great
opportunity for Chipotle Mexican Grill Company to gain more profits in the business.
● Health Consciousness is Trendy – There are an increasing amount of people in today’s
world who are “label readers” when it comes to eating at restaurants. Consumers want to
know exactly what ingredients and in the food they consume. Chipotle’s mission aligns
with the desires of this trend. By taking advantage, Chipotle can become the trusted fast
casual restaurant which nothing to hide on the label.
Threats –
● Ever Changing Technology – Dynamic technological development is a threat to
Chipotle Mexican Grill Company. Given the fact that technology is growing rapidly, the
company may not be able to keep up with its competitors who have more advanced
equipment to develop their industries. Therefore, causing them to lose customers due to
lack of innovation and creativity.
● Low Cost Competitors – Competition is another threat to the company. Most of
Chipotle’s competition is at a much lower price point which puts the organization at risk.
Chipotle must provide alternative value proposition to mitigate the effect of this external
threat.
● In the Limelight – Chipotle Mexican Grill has made national headlines in a negative
light after the health and safety scandals that the restaurant has been involved in. The
threat from this occurrence is that customers could turn away from future business at
Chipotle after seeing such negative press.
● Supply and Demand of Raw Materials – Chipotle works directly with suppliers to
ensure fresh ingredients. Farmers that distribute vegetables and meats directly to the
restaurant can fluctuate pricing of these goods which would in turn, increase the cost for
Chipotle. This could vary based on several factors including: demand, weather
conditions, and availability.
Works Cited
“Chipotle Mexican Grill Inc Growth Comparisons.” Chipotle Mexican Grill Inc (CMG) Growth
Rates Comparisons to Restaurants Industry, Sector, Market. Sales, Income, EPS,
csimarket.com/stocks/growthrates.php?code=CMG.
“Cultivate a Better World.” Chipotle, https://www.chipotle.com/about-us/sustainability.html
Department, S. M. (n.d.). Chipotle Mexican Grill SWOT Analysis Matrix (Strengths, Weakness,
Opportunities, Threats). Retrieved May 9, 2019, from http://fernfortuniversity.com/termpapers/swot/1433/546-chipotle-mexican-grill.php
Giammona, C., & Patton, L. (2015, December 08). Chipotle’s greatest strength now its greatest
weakness too. Retrieved May 9, 2019, from https://www.chicagotribune.com/business/ctchipotle-fresh-ingredients-e-coli-20151208-story.html
“Good Things Are Headed Your Way.” Chipotle, www.chipotle.com/food-with-integrity.html.
Number of Chipotle locations 2017. (n.d.). Retrieved May 8, 2019, from
https://www.statista.com/statistics/221456/number-of-chipotle-restaurants/
Peterson, H. (2015, October 20). Chipotle has 4 problems that are threatening its growth.
Retrieved May 9, 2019, from https://www.businessinsider.com/chipotle-has-4challenges-threatening-business-2015-10
Assignment 1 – Business Report (Group 4)
MGMT 582
May 5, 2019
Analysis of the Trendy Burrito: Chipotle Mexican Grill
Introduction of the Firm
Chipotle Mexican Grill, Inc. is an American chain of casual restaurants headquartered in
Newport Beach, California. Chipotle spans over 1,700 restaurants and 45,000 employees worldwide. The restaurant offers fast-casual restaurant style dining which is a hybrid between fastfood and casual dining. Customers can eat in or take out in a faster manner because food is
prepped ahead of time and just needs to be assembled per the customer’s preference when
they arrive. Chipotle’s core offerings include Mexican style burritos, tacos, salads, and bowls
and complimentary products including chips, guacamole, and fountain beverages.
Chipotle Mexican Grill reported $3.9 billion in revenue in 2016 and has expanded outside of the
United States since 2014 into twenty-nine total locations. The restaurant has expanded into
Canada, France, Germany, and the United Kingdom. Chipotle’s C-Suite Level Managers, office
managers, and Board of Directors dispute audits, compensation, and nominate corporate
superiors. The team was headed by the organization’s founder, Steve Ells, but was recently
replaced in February 2018 by Chipotle’s new CEO, Brian Niccol. The chains themselves are
company-owned and not franchised; thus, new locations are trained by regional employees in a
current location until the additional site is rolled out. Additional employees of Chipotle include
the field team of area managers, team leads, team directors, regional directors, and store
operators per location.
Chipotle Mexican Grill is the market leader in fast-casual dining. The organization competes
primarily with Qdoba Restaurant Corporation, Moe’s Southwest Grill, and Rubio’s Coastal Grill.
The company also offers similar products as fast-food giant Taco Bell, but in a different format.
By positioning itself in the market as the affordable, convenient counter-service eatery, Chipotle
is able to attract the customer looking for a higher-end quick bite to eat. The team is able to
segment the market based on its position against fast-food restaurants by letting the millennial
customer know the organization “speaks their language” and provides the healthier food option.
This is represented in the trendy cups and “lunch bag” of chips style the company prides itself
on.
Summary of the Organization’s Strategy
Chipotle’s Mission Statement: “Food with Integrity.”
Vision and Values:
“To sourcing the very best ingredients we can find and preparing them by hand. To vegetables
grown in healthy soil, and pork from pigs allowed to freely root and roam outdoors or in deeply
bedded barns. We’re committed because we understand the connection between how food is
raised and prepared, and how it tastes. We do it for farmers, animals, the environment, dentists,
crane operators, ribbon dancers, magicians, cartographers, and you. With every burrito we roll
or bowl we fill, we’re working to cultivate a better world.”
Chipotle has five values that are part of its organizational strategy. (1) Real ingredients, no
added colors, flavors, or preservatives; (2) Cooking in the kitchens. Great ingredients deserve
great preparation; (3) Responsibly raising the bar by making the extra effort to partner with
farmers, ranchers, and other suppliers whose practices emphasize quality and responsibility; (4)
Making choices that help the environment; (5) Cultivating a better world by changing the face of
fast food, starting conversations, and directly supporting efforts to shift the future of farming and
food.
Business Objectives:
In June 2018, Chipotle Mexican Grill, Inc. announced its plans to execute a growth driven
turnaround with new CEO, Brian Niccol. The company outlined its path to better performance,
including a clear strategy, strong enabling structure, and a new supporting culture by focusing
on the following five areas:





Becoming a more culturally relevant and engaging brand to grow love and loyalty;
Digitizing and modernizing the restaurant experience to be more convenient and
enjoyable for customers;
Running great restaurants with great hospitality and throughput;
Being disciplined and focused to enhance the company’s powerful economic model; and
Building a great supporting culture as Chipotle innovates and executes across digital,
access, menu, and the restaurant experience.
Chipotle uses non-traditional marketing by focusing on the message of food sourcing and
organic farming. It positions itself as a restaurant that cares about the food it makes and its
consumers. This strategy resonates with a generation that is interested in the environment and
the way food is developed. Brian Niccol wants to make the Chipotle brand more visible and
engaging to customers. The company’s new initiatives are to revamp their marketing
communications and plans. Utilizing the Chipotle app, the company will be leveraging a second
make line to grow digital sales and expand access with mobile ordering and engaging with
customers by launching a new loyalty program in 2019.
Competitive Environment
Primary competitors of Chipotle Mexican Grill are Qdoba Mexican Grill, Moe’s Southwest Grill.
Rubio’s Coastal Grill, Baja Fresh as fast-casual food Mexican style restaurants. Taco Bell also
competes with Chipotle, offering similar products but in a different format of fast-food. These
restaurants compete in different levels of menu options, ambiance, price, size, geographic
segment, reputation, and attractiveness to customers. Each competitor remains unique enough
to position themselves differently in the market but have not stepped on the toes of fast-casual
restaurant leader, Chipotle Mexican Grill.
Moe’s Southwest Grill- Moe’s has positioned itself in forty states across the U.S. and has
centralized itself along the eastern coast. Moe’s positions itself to the customer as a
customizable Southwest dish, much like most of its competitors. The food is made right in front
of the customer and primarily grilled, a similar atmosphere to Chipotle. The restaurant lacks the
trendiness that Chipotle owns but still pulls a similar target audience. The average sales of a
Moe’s Southwest Grill franchise is $698,000 annually and franchise owners must purchase in
sets of three stores.
Qdoba- These franchises operate in 718 different locations in the United States and Canada
and sits in the market as another customizable menu fast-casual restaurant. In 2017, the
Qdoba company reported $436 million in sales and is much smaller in size than Chipotle. The
company is a wholly-owned subsidiary of Jack in the Box, a much larger American traditional
fast-food restaurant. Qdoba competes with Moe’s Southwest Grill and Chipotle by offering
similar products and add-ons such as queso and guacamole but does not specifically target the
younger millennial generation in their recent marketing plans.
Baja Fresh- Baja Fresh is a Scottsdale, Arizona company owned by MTY Food Group that
focuses its portfolio primarily on Asian fusion food. Baja fresh expands the portfolio into
Mexican/southwestern food and exists in 162 different locations. The difference between Baja
Fresh and its competitors when reviewing ambiance is the fresh salsa bar that Baja Fresh is
known for. This is something you will not see at Chipotle. These franchises exist in the United
States, Singapore, and Dubai.
Rubio’s- Rubio’s is a California based fast-casual restaurant operating in 200 different locations
on the West Coast. This fast-casual Mexican restaurant offers similar products with an
emphasis on fish tacos, something that its competitors do not offer. The limitation of Rubio’s is
its location which only spans into California, Arizona, Colorado, Florida, Nevada, and Utah. This
restaurant provides its customers with a more personal touch and separates itself from the
larger organizations by focusing on the 1 to 1 interactions with customers as one of its key
principles.
Taco Bell – Taco Bell is owned and operated by Yum! Brands. It exists in 6,200 locations across
the United States. The conglomerate also owns fast-food giants KFC and Pizza Hut. Taco Bell
finds itself slowing in sales in years late due to the health-influx of millennials, interested in lowpreservative, all-natural selections. This plays to Chipotle’s favor. Chipotle’s position in the
market is different from that of Taco Bell and this is a key differentiator in why a customer would
choose Chipotle over Taco Bell. Chipotle Mexican Grill prides itself on Food with Integrity and
proudly shouts that its food does not need microwaves or freezers, contrary to the fast food
giant. Because of this, it makes it almost impossible for Taco Bell to delve into the fresh, natural
menu of Chipotle.
Chipotle Mexican Grill- Chipotle is so successful in the fast-casual segment because it
understands its products as well as its customers. The primary target for Chipotle is the younger
millennial generation who wants their food quickly and does not need to think twice about the
ingredients. This, coupled with the way in which the food is served, is appealing to the Mexican
food eating millennial. By understanding what works for Chipotle, and recognizing what the
competition is missing, the restaurant is able to sky rocket to the top of the competition, even
with its slightly higher price point per item. Customers are willing to pay for the experience of
eating a Chipotle menu item, versus the competition that has not tapped into what this segment
specifically wants when entering a fast-casual Mexican restaurant.
Sources:
Alhadlaq, Ibrahim. Chipotle’s Strategic Marketing. 2016, www.ijser.org/researchpaper/Chipotles-StrategicMarketing.pdf.
“Business Directory.” ATLANTA, GA – Business Data, www.dandb.com/businessdirectory/mswgllcatlanta-ga-6643739.html.
“Chipotle Mexican Grill Inc Growth Comparisons.” Chipotle Mexican Grill Inc (CMG) Growth Rates
Comparisons to Restaurants Industry, Sector, Market. Sales, Income, EPS,
csimarket.com/stocks/growthrates.php?code=CMG.
Chipotle Mexican Grill, Inc. “Chipotle Announces Growth Strategies Focused On Winning Today And
Cultivating A Better Future.” PR Newswire: Press Release Distribution, Targeting, Monitoring and
Marketing, 1 July 2018,
www.prnewswire.com/news-releases/chipotle-announces-growth-strategies-focused-on-winning-todayand-cultivating-a-better-future-300673515.html.
“Chipotle’s Segmentation and Target Marketing: Millennials.” Marketing Strategies, Marketing Strategies,
19 Mar. 2015, blog.mediaplans.net/chipotle-s-segmentation-and-target-marketing-millennialsed510781fe16.
“CMG’s Competition by Segment and Its Market Share.” CSIMarket,
csimarket.com/stocks/competitionSEG2.php?code=CMG.
Fresh, Baja. “How Does Baja Fresh® Stand Above Competitors?” Baja Fresh Franchise, 27 June 2017,
bajafreshfranchise.com/blog/industry-outlook-baja-fresh-stand-competitors/.
“Good Things Are Headed Your Way.” Chipotle, www.chipotle.com/food-with-integrity.html.
Klein, Danny. “Chipotle Names Taco Bell’s Brian Niccol CEO.” QSR Magazine, 13 Feb. 2018,
www.qsrmagazine.com/fast-casual/chipotle-names-taco-bells-brian-niccol-ceo.
Nazario, Marina. “Fast-Food Fails from McDonald’s, Chipotle, Domino’s, and More.” Business Insider
Malaysia, 16 June 2017, www.businessinsider.my/fast-food-fails-2015-10/.
“Qdoba: Company-Owned Restaurant Sales 2018 | Statistic.” Statista,
www.statista.com/statistics/321478/qdoba-restaurant-sales/.
“Rubio’s Restaurants Competitors, Revenue and Employees – Owler Company Profile.” Owler,
www.owler.com/company/rubios.
Whitten, Sarah. “Chipotle’s Stock Is up 80% since Mid-February, and That Could Be Just the Beginning .”
CNBC, CNBC, 28 June 2018, www.cnbc.com/2018/06/27/chipotles-stock-is-up-60-percent-sincefebruary.html.

Purchase answer to see full
attachment

error: Content is protected !!