Chipotle Core Competencies

Chipotle had a crises of an E. Coli outbreak starting in Oregon and Washington State. Three people in the Portland area and 19 people in Washington became sick after eating at the Mexican food chain since October 14 (Le, 2015). According to Zaremba (2010), in risk situations the quality, quantity, speed and delivery method for instructing information is paramount. Chipotle was consistent with Zaremba (2010) when the outbreak came out, Chipotle chairman Steve Ells quickly pledged that he was going to work “harder than ever to ensure that our food is safe and delicious,” including ramping up efforts with the chain’s new food safety program (Swann, 2015). Chipotle also demonstrated speed consistent with Zaremba (2010) in where it closed the 43

CRegardless of Chipotles strengths, the company has encountered some weaknesses as well. In respect to future growth, Chipotle has seen some growth and are profitable, but there are some crucial factors that could be a warning sign of possible challenges. Chipotles principal weakness is its limited menu choices; there are basically customizable items on the menu that customers can order. Chipotle will have to offer more options to customers or increase marketing strategies; the main goal is to gain and retain customer confidence. Additionally, highly priced food items are another concern for Chipotle.

According to the Table 2, Chipotle had an excellent performance in 2015. However, they did not do well in 2016. Chipotle’s Total Revenue and Gross Profit have decreased in 2016, which is (13.26%) and (57.57%). There are three main reasons that can explain in the following. The first reason, Chipotle opened 240 new restaurants in 2016 (Chipotle Annual Report 2016).

The moment I tried placing an order in Chipotle, my fantasy of American life shattered. After finding my three massive pieces of luggage from United Airlines’ baggage claim, I entered Chipotle to satisfy my starving stomach after a seventeen-hour flight. I waited around ten minutes in an excitement to try the renowned Chipotle burrito that everyone talked about. However, it took me less than ten seconds to decide to leave the place. I was trembling in frustration as I left the place.

Chipotle’s primary consumers are millennials (aged between 23 and 36). According to the United States Census Bureau, Millennials account for more than a quarter of the nation's population. Millennials are ethnically diverse, technologically competent, with values rooted in authenticity, wellness, and environmental responsibility. Technical competency and familiarity make digital purchase functionality a vital tool in appealing, retaining and growing a consumer base within this market. Millennials have been shifting away from calorie counting and moving towards a focus on real, clean organic foods.

With their high quality foods, with sustainably-sourced ingredients Chipotle captures the Whole Foods, health-conscious, fitness-craze, and Starbucks crowd who are willing to pay a premium for good food on the go. This strength goes directly against much fast-food chain’s major weakness: healthy, tasty food. McDonalds has been in a long slide with loss of market share, and they've just announced a major effort to offer healthy food, not just "healthier", but actually "healthy", so they're responding to a major shift in consumer behavior and to the threat of Chipotle and other healthy

Since 1993, when its first restaurant was opened in Denver, Colorado, Chipotle proved to its clients that high-quality food can be served fast. By using only fresh ingredients and adding no artificial flavors, Chipotle has managed to create trustful relations with its customers and even expanded its business to other countries. Chipotle has opened its stores in few countries such as the UK, the US, Canada, Germany and France. It is now time for the corporation to follow the lead from other companies like Yum. Brands such as KFC and Taco Bell as well as McDonalds expand their footprint in the Asian market like Japan.

Chipotle has been an established player in the Mexican casual fast food industry since 1993. They are currently the 2nd largest Mexican fast food restaurant, only behind Taco Bell in terms of sales.1 Chipotle sells its product as one of the freshest, highest quality Mexican establishments with the convenience of ordinary fast-food. They offer premium ingredients all sustainably sourced. Despite being the second largest Mexican fast-casual restaurant, Chipotle’s revenue reached $3,904,384 in 2016 growing 42.95% since 2012, gaining a huge portion of market share in the process.2 While EPS may have dipped from $8.82 in 2012 to $.78 in 2016, it quickly recovered to $6.19 in 2017 and revenue reached 2015 levels again at $4,476 million.3 Chipotle’s promise of fast food with high quality ingredients has helped it gain massive popularity and, as a result, revenue in recent years.

First, the annual Saint Patrick’s Day parade integrates Hispanic heritage into its line-up; this is an excellent opportunity for Chipotle Mexican Grill. Participating in this parade will foster propinquity of the Chipotle brand resulting in amplified revenue. Next, to reduce wasteful behavior, Chipotle will contribute all edible food destined for disposal to the local Securing Emergency Resources through Volunteer Efforts program’s Hunger Resource Center (HRC). The HRC published a list of urgent food needs to include beans, rice, and leafy greens, all of which are surplus items of Chipotle Mexican Grill (Northern Virginia Family Service, n.d.).

Hiring better trained employees could be a great improvement for this store as this will help to reduce the amount of wasted burritos that eventually will get thrown away everyday, thus, helps to save costs. Other than that, repeating back the customers’ orders will reassure accuracy and this will improve customer satisfaction in the overall experience of Chipotle. Besides, Chipotle can have a better way of shipping their fresh products by reducing the distance of the farms from their company as this will helps them to receive the products quicker and in a much more efficient way whereby this will also helps to reduce the chances of these food products to become spoiled. Chipotle has been pay out a lot of money giving free burritos, refurbish

Compared Chipotle’s competitive advantages to its competitors in the same industry including Taco Bell, Moe Southwest Grill and Qdoba Mexican Grill, we can see that while there are some competitive advantages are equal and even higher than its rivals’, there are still some competitive advantages are lower such as dealers network * Chipotle does have a net competitive advantage. Firstly, they have a focus menu, along with classic cooking technique, which enhances the taste of the food. Secondly, Chipotle establishes a reputation for using organically high – quality ingredients, which attracts customers because of its consciousness for healthy lifestyle. In addition, Chipotle is famous for its quick and hospitable service.

Chipotle is in the fast casual industry where competition is extremely intense since there are so many different dining options. An industry like fast casual restaurants has a very high growth rate therefore there is not just one company that has the market cornered. What sets the restaurants apart is not cost but product differentiation; they position themselves in the market with their slogan of Food with Integrity. Since restaurants in the fast casual industry are priced fairly in the same range Chipotle uses different product features to set themselves apart from the others (parature.com). The first value driver in Chipotle’s differentiation strategy is the product quality; they utilize local farmers who are conscience of the environment.

The reason for such a phenomenon may be that Chipotle are much regarded as business-casual restaurants, and customers prefer to have meals in Chipotle by themselves or with their classmates and colleagues instead of with families. To expand their customer portfolio, Chipotle can try to attract customers who have families, providing services or meal options for children. On the business side, Chipotle corporate with Tapingo, a mobile commerce application that provides ordering and delivering services with college students. So that Chipotle can expand their markets and have more potential customers. In terms of pricing, Chipotle charges a premium price.

This provides a valuable tool for molding the kind of success-orientated culture at Chipotle. Instead of wasting time and resources while recruiting new members, they save time, capital, and resources by rewarding and promoting from within. This leads to maximization of profit, reduction of turnover, and improved employee satisfaction and performance through retained knowledge, skills, and experience of long-term employees. The net effect of these communication and management methodologies is to ensure that services offered to customers are of the highest possible quality. For example, 84% of the customers spend less than five minutes waiting to be served.

Introduction The restaurant industry in the United States had annual sales of $ 631.8 billion and employs 12.9 million people in 2012. Even in times of recession there is little evidence that this industry has seen a decline especially in its fast food and quick service segment. But with a depressed economy with no immediate upward trend in the near future, majority of the customers indicated that they would either curtail their spending on eating or best maintain its current level which is certainly going to affect the future of many restaurants in the industry. Chipotle is part of the fast casual segment of the U.S industry with over 1,600 restaurants.