Preview

Chipotle Relative Cost

Satisfactory Essays
Open Document
Open Document
351 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Chipotle Relative Cost
Subject: Competitive Positioning and Relative Cost A nalysis of the F ast Food Industry
This memo discusses competitive positioning and relative cost that determine the fast food fast food industry includes companies who provide quick meals with limited-services through restaurants, drive-through stops, or takeout express (Exhibit 1a-e). Restaurants produce food from ingredients and semi-manufactured food; they sell each meal with a main dish, a beverage, and sometime an additional dessert. Customers, vary from individuals to families, always make payment before receiving their meals. In such a competitive industry, Chipotle Mexican Grill earns a great profit by placing itself apart from others. Chipotle, a popular fast food restaurant,

You May Also Find These Documents Helpful

  • Powerful Essays

    Chipotle Mexican Grill was a concept turned reality by a gentleman by the name of Steve Ells. Chipotle Mexican Grill provides excellent Mexican cuisine driven by a concept of “Food with Integrity”. The first chipotle Mexican grill was opened in 1993 in Denver Colorado. By the end of 1995 there were three. In 1996 alone, Steve Ells opened five more Denver-area restaurants growing by a total of eight stores in three years. By 1998 Chipotle Mexican Grill was showing much promise. In order to meet their growth needs Chipotle took on outside investors. In 1999 they opened their first out-of-state stores in Minnesota and Ohio. As Steve was seeing rapid growth with his company, he was also noticing significant issues with the quality of the food being desired in this industry. After learning how pork was traditionally raised in the United States Steve Ells started his business down a new path. This lead to the concept of “Food with Integrity” , which was as a result of Steve’s decision to sell only the highest quality organic and naturally raised foods. Chipotle Mexican Grill continues to grow rapidly and in 2006 went public on the New York Stock Exchange. By 2012, Chipotle Mexican Grill had over 1400 company-owned stores taking over as the number two Mexican fast food restaurant for total sales in the US market. Today the overall business environment for Chipotle Mexican Grill is very good. The company has grown by over 50% since 2010 and is seeing increases in revenue averaging between 18% and 20% each year. Since going public the company has seen a 4000% return in their stock prices. Chipotle Mexican Grill continues to grow an average of 150+ stores per year. Based on their financial reporting for 2013 they had reached $3.21 billion in revenue. The significant amount of growth…

    • 1753 Words
    • 8 Pages
    Powerful Essays
  • Powerful Essays

    The food industry in Canada, with its highly competitive market continues to evolve and change each day, affected by its financial surroundings, mechanical progression and accordingly, the shifting nature of consumer behavior (Office of Consumer Affairs, 2013). Canadian restaurant sector can be divided into three groups, the fast food or quick service, the mid- scale casual dining, and the fine dining. Ostensibly dominating the second group of casual dining is the Boston Pizza International Inc. (also known as BP). This research project is based on the Boston Pizza perceived as a Platinum Member of Canada 's 50 Best Managed Companies. This is to appreciate how the company has placed itself in the market and the factors at play, which have contributed not only to scale the pinnacle of success but also ward off the strategies of competitors and new entrants alike. Data collected is through the information available on the company’s website and other relevant websites, journals and articles and hence the implied limitation. It begins with the evaluation of the impact of various functions of the Boston Pizza such human resources, finance, operations, and marketing. Review of the organizations design and departmentalization with respect to the geographic location, products, services, and marketing…

    • 6343 Words
    • 17 Pages
    Powerful Essays
  • Powerful Essays

    Chipotle Mexican Grill is a major restaurant in the category of “fast casual food,” which is a 4% makeup of the total restaurant industry. Chipotle saw tremendous growth since its initial public offering in 2006, going from stock prices of $45 a share, all the way to prices of $302.96 in 2012. However, Chipotle has seen its share of downturns over the year and may be in danger of a downward trend. This can be attributed to multiple issues. The emergent of new competitors, or existing competitors with new products, rising costs of product, and lack of innovation could all attribute to a downward turn. All of these will be examined throughout…

    • 1628 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    Other than the quality fast-food category, Chipotle is also competing with restaurants from other categories. The most prominent competitor in the Mexican food category, Taco Bell in particular, pose a threat to Chipotle’s customer base. Taco Bell shares the same customer base as Chipotle as a fellow Mexican restaurant, and the launch of Taco Bell’s new menu, Cantina Bell, won the demand of Chipotle’s regular customers with its cheaper price. Chipotle’s decreasing same-stores sales could be attributed to the growth of competitors as…

    • 435 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    He begins the book by letting readers how much the average American person spends on fast food each year. He points out that that the society spends more money on fast food than higher education. Schlosser then continues the book by giving the history of fast food and gives short stories of several originators of fast food chains such as McDonald’s, Burger King, Taco Bell, Wendy’s, and Kentucky Fried Chicken. The biography of each “pioneer” of a fast food restaurant chain helps to add to Eric Schlosser’s logos appeal while adding interest to the story. The writer also uses an abundance of numerical data and facts to support his writing. For instance, when explaining the growth of fast food in society, Schlosser writes, “In 1970, Americans spent about $6 billion on fast food; in 2000, they spent more than $110 billion”(Schlosser, Eric. Fast Food Nation. New York: Houghton Mifflin, 2001.…

    • 532 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Chipotle faces moderate rivalry among existing firms as it faces low numbers of competitors namely Taco Bell, Moe’s Southwest Grill, Qdoba Mexican Grill and for the smaller chains including Baja Fresh and also California Tortilla. In addition, Chipotle’s products are moderately differentiated as its quality and nutritious ingredients, customized products offer to customers, ability to serve orders quickly, emphasise on quality assurance and food safety at the same time offering best possible experiences to customers. Moreover, Chipotle experiencing growth demand from customers as more restaurants open at Paris and France in 2012.…

    • 557 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Chipotle Mexican Grill

    • 1104 Words
    • 5 Pages

    Chipotle Mexican Grill (CMG) “Food with Integrity” founded in 1993 with the aim of reinventing Mexican food with a policy of Food with integrity and the commitment to finding the very best ingredients raised with respect for the animals, the environment, and the farmers. The company witnessed a tremendous growth over the years until October 18, 2012 when its stock price suffered a significant decline from a 52-week high of $442.40 to $285.93. CMG who is a differentiator in the restaurant industry now faces an increase in food cost and shortened supply of organic items and also an intense competition from the launch of a Cantina Bell menu by Taco bell which Jeff Einhorn, a Hedge Fund Manager presented to have put CMG at risk of losing its potential customers. To stay steadfast in its policy means to increase the prices of its menus which lead to the question: “Could CMG continue to use quality and sustainably-sourced inputs as differentiators to justify a higher priced menu?”…

    • 1104 Words
    • 5 Pages
    Good Essays
  • Good Essays

    The McLawsuit

    • 1324 Words
    • 6 Pages

    There are challenges for the fast food industry in recent years that have been pressuring profit margins. The industry as a whole has proven robust enough to withstand these challenges, though some players have done better than others.…

    • 1324 Words
    • 6 Pages
    Good Essays
  • Powerful Essays

    U.S.A's Fast Food Industry

    • 1330 Words
    • 6 Pages

    Fast food restaurants represent one of the largest segments of the food industry with over 200,000 restaurants and $120 billion in sales in the U.S. alone. Fast food restaurants, also known as quick service restaurants, are noted for their short food preparation time. Some of the largest players in this category include international giants like McDonald 's and Yum! Brands, national chains such as Wendy 's and Burger King and regional players like Jack In The Box and Sonic. Firms within the fast food industry fall under the market structure of perfect competition. Market structure is a classification system for the key traits of a market. The characteristics of perfect competition include: large number of buyers and sellers, easy entry to and exit from the market, homogeneous products, and the firm is the price taker. Many fast food franchises fit all or most of these characteristics. Competition within the industry as well as market supply and demand conditions set the price of products sold. For example, when Wendy 's introduced its $.99 value menu, several other companies implemented the same type of changes to their menu. The demand for items on Wendy 's value menu was so high because they were offering the same products as always, but at a discounted price. This change in market demand basically forced Wendy 's competition to lower prices of items on their menu, in order to maintain their share of the market. The previous example illustrates the elasticity of the fast food industry. Supply and demand set the equilibrium price for goods offered by franchises within the industry. Competitors of Wendy 's must accept the prices established by the consumer demand for the value menu. If consumers didn 't respond so positively to Wendy 's changes, other firms wouldn 't have had to adjust prices. On the flip side of this concept, there is no need for franchises to further…

    • 1330 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    2: Intense price pressure from competitors like Burger King, Taco Bell, Wendy’s, KFC and any mid-range sit-down restaurants.…

    • 1132 Words
    • 5 Pages
    Powerful Essays
  • Powerful Essays

    Obesity In America

    • 2241 Words
    • 6 Pages

    The term “Fast food” is given to any type of food provider that, naturally, can be prepared and served quickly to accommodate the consumer. While sounding like a great facet to a fast paced life style it comes with many compromises; unfortunately that all comes at the consumer’s expense. In order to achieve quick service nearly all of the food served at fast food joints is…

    • 2241 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    obesity in australia

    • 939 Words
    • 3 Pages

    Slowing down fast food. (2012). 1st ed. [ebook] Monica Gagnon. Available at: Anon, (2015). 1st ed. [ebook] Available at: https://www.stopcorporateabuse.org/sites/default/files/resources/slowing_down_fast_food_corporateaccountabilityinternational.pdf [Accessed 26 Feb. 2015]…

    • 939 Words
    • 3 Pages
    Powerful Essays
  • Good Essays

    Moreover, a lot of factors have been present why people tend to buy and eat food at fast food chains. Well based on everyone’s experience, the people in our society love to eat at these places because of it being efficient, low-priced, time-saving and convenient. When people go in fast foods such as Mcdonald’s, they don’t have to worry of wasting so much time waiting for their food to come as mostly compared to what they do on fancy restaurants. The food is served immediately as they reach out to pay their bills and then they can go take their seats and happily eat their orders. In addition to that, fast food chains offer great deals on their value meals, especially to those who are on a tight budget. (Inong, 2009). As the world is suffering from globally economic crises, people think of ways that would make them be able to save money and one way to do that is to hunt for cheap meals in the…

    • 1918 Words
    • 8 Pages
    Good Essays
  • Better Essays

    So many people like to eat fast food because it is cheaper than gourmet restaurants. One of the reasons why fast food is so cheap is because of competition. By that, I mean, investors can bring more customers through cutting the price of their products. According to Wingstop, Founder and Chief Executive, Antonio Swad said “when a customer can bring enough food to feed four people for about $21 -- and when the food has sizzle and wide-reaching appeal, and the experience comes with a lot of energy and uniqueness -- then you’re going to see that customer…

    • 2224 Words
    • 9 Pages
    Better Essays
  • Powerful Essays

    Today the purpose of this introduction is to show how the fast food industry can…

    • 1389 Words
    • 6 Pages
    Powerful Essays