Chipotle Mexican Grill Industry Analysis

Chipotle ventured into a new territory when it was created, as it had an innovative vision for fast-casual restaurants. By using fresh and quality ingredients, Chipotle raised the bar in their segment. The service line where customers could see their order being prepared enhanced the experience of Chipotle. Consumers who were used to eating at fast-casual restaurants where the food was frozen and made out of sight were able to savor the uniqueness of Chipotle. These differences helped Chipotle become successful. However, as competitors copy the traits that make Chipotle unique, Chipotle must adapt and overcome in order to remain a profitable company.

Top executives of Chipotle conscious about the quality of food in its restaurants. Thus, Chipotle did not buy food ingredients directly from farmers and restaurant supplies from manufacturers. Chipotle acquired long-term relationship with food industry suppliers of good reputation that able to meet their quality specification. The company makes purchases from a list of granted suppliers that provide key ingredients. Some ingredients such as beans are organically grown produce. Chipotle uses high quality, nutritious and fresh raw ingredients for their food preparation.

Chipotle Mexican Grill is a fast casual Mexican Restaurant that operates from the United States. Although the restaurant is specifically segmented to the fast casual Mexican restaurant market, it does not simply operate in this realm. Chipotle is also successful operating in the restaurant market as well. According to the Trefis Team (2014) Chipotle Mexican Grill has managed to take market share from restaurants in the fast food industry.

The purpose of this project is to tie together the various topics in microeconomics that are discussed during the semester. The project involves an analysis of a particular product or service, a company that produces the product, the industry that produces the product, and an industry that produces a raw material or input used in the production of the product you choose to analyze. Choose any final good or service (no basic commodities, although this could come in the analysis of an input market). Use this as an opportunity to gain knowledge about the economics of a product or service that interests you.

Fascinated by the simple cost-effective business models he observed at small burrito shops in San Francisco, Steve Ells founded the first Chipotle Mexican Grill in 1993 near the University of Denver. By putting his own spin on the traditional casual dinning approach, Chipotle is now an enormously successful publicly traded company with over 1,000 locations in 38 states.

Primarily, the article’s purpose is to announce Chipotle’s philosophy that will enhance their corporation, thereby, boosting the economy. Chipotle believes that by providing more gainful incentives i.e. educational assistance, paid leave, and the potential to earn a six figure salary to their employees will reduce the high employee turn-over rate that the fast food industry encounters (Jargon, 2015). Furthermore, change the way that the fast food industry has been viewed. The strategy is to transform the fast food experience into a “fast-casual,” dining experience (Boone & Kurtz, 2014) by providing a more urbane atmosphere and employing individuals that are well educated to maintain such an atmosphere. The article states that thus far the industry

Chipotle’s strategy has been working well for them so far but there is room for improvement. Chipotle being company owned instead of being franchised gives them the advantage of keeping the profits with the company and maintain control. Chipotle can work on their marketing strategy to help broaden name recognition, increase sales, and expand locations.

As the text suggest a small group consists of 5 to 7 individuals, therefore the Chipotle group size fits into the small group category as there were 7 team members working. There are many different tasks that each individual completes to contribute to the overall customer service: Front line greeter takes your initial order finding out if you want a bowl, burrito, taco, or salad. It’s usually very crowded so the interaction is very quick and to the point. Next, there is an individual waiting to be informed of the toppings desired. Once those two individuals complete the task, the item is then marked for the cashier to correctly charge the customer (the marking allow the assembly line to move smoothly without much verbal communication). In the

The Chipotle Mexican Grille opened its first store in 1993 beginning a new category in the restaurant industry known as “fast casual” (About Us, 2014). This new category featured the “highest quality raw ingredients, classic cooking methods, and distinctive interior design-features that are more frequently found in the world of fine dining.” However, aside from the normally long wait in lines, an order could be taken and served in only a couple minutes. Currently Chipotle operates more than 1,500 restaurants internationally. The following pages will present a balanced approach to the effectiveness of Chipotle’s strategy analyzing financial performance, customer satisfaction, employee/learning and growth, and internal process.

Chipotle’s quick ratio is 3.28, slightly lower than its current ratio. Yum! Foods quick ratio is .62, which is also slightly lower than their current ratio. Both ratios are acceptable as long as A/R is not expected to slow. Chipotle appears to be a significantly stronger company than Yum! Foods. The industry average is not given.

The fast food, or quick service restaurant industry (QSR), represents approximately 200,000 restaurants and $155 billion in sales in the U.S. alone, they are one of the largest segments of the food industry (Hoovers, 2011). This segment of the restaurant industry is “highly competitive and fragmented… number, size and strength of competitors vary by region, market and even restaurant. All of these restaurants compete based on a number of factors, including taste, quality, speed of service, price and value, name recognition, restaurant location, customer service and the ambience and condition of each restaurant” (Chipotle, 2010).

Chipotle is the leader in the fast casual market, with over 1,900 locations, $3.21 billion in annual revenue, and the ability to serve up to 300 customers an hour. It has innovated the restaurant market by providing reasonably priced scratch-made meals, containing local ingredients, all within the confines of a pleasing aesthetic environment (Chipotle Mexican Grill, Inc., 2014; Kaplan, 2011). To reach its success, the firm utilized architectural innovation by stealing components of various types of restaurants already in existence. The company appropriated its rapid meal preparation methods from fast food chains such Subway and Quiznos, adopted its provision of quality food from more upscale casual Mexican restaurants, and implemented a locally based supply chain similar to that seen at many local farm-to-table establishments. This convergence of different properties came together right as the millennial generation was coming of age and demand higher quality, natural, and locally sourced ingredients in meals that could receive quickly. The company has also attempted to utilize an incremental innovation approach by removing all CMO ingredients and testing new foods such as breakfast items, soup, and chorizo sausage (The Associated Press, 2015; Peterson,

Management is the backbone of any good company. In order for a company to successful, a strong management team is needed in order to meet goals in an effective and efficient manner. Chipotle opened its doors in 1993 when Steve Ells took a chance and began his business in San Francisco. Chipotle is a chain of Mexican restaurants that is based in Denver. Chipotle is often cited as the company that started the fast casual movement where customers can get a healthy prepared meal quicker than other traditional styled restaurant. The fast casual restaurant concept was well received and Chipotle’s popularity expanded all across the United States. Customers could not get enough of the Mexican chain and massive lines could be seen stretching outside the stores all across the country. Along with its popular food, Chipotle Mexican Style Grill is a company that contains a successful management style. Why? What sets this companies management apart from the rest? There are many factors that we could analyze to understand the success of Chipotle, yet for the purpose of this paper, we will look into the cooperate culture of the company, human resource management, their leadership style, and how Chipotle deals with and how the company manages in times of crisis.

This case study is about Chipotle, a young fast food company. In 2012, Chipotle has shown a successful performance with its Grills. Following the path, Chipotle is building a new project which is the ShopHouse. The ShopHouse predicated on much the same strategy with the Grill but it had

There are two fundamental challenges that make the casual dining segment unlikely to substantially progress over the next few years. First, the 18 – 35 year old demographic favors fast casual concepts that are conversely related to the success of companies in TXRH’s peer group. Second, the segment as a whole typically operates in malls and shopping centers. Declining traffic due to the rise of ecommerce and lower-priced outlet stores spells out disastrous degradation of foot traffic for companies like TXRH.