Chipotle Mexican Grill was originally opened in 1993, in Denver, Colorado. By 1996, there were eight Chipotle serving the Denver area. Chipotle brings on outside investors in 1998, and by 1999 McDonald’s became Chipotle’s majority holder. The company went public in 2006 and listed under NYSE with symbol: CME. As of Dec 2011, the company operates 1,230 restaurants in the U.S., two in Toronto, Canada, and two in London, England. The founder and CEO, Steve Ells, started with a philosophy known as “Food With Integrity” in 2001. This philosophy encompasses the fact that Chipotle wants to offer food that is “sustainable sources – naturally raised meat – locally or organically grown – and fresh” (Chipotle Mexican Grill, 2009). Always aiming to improve the business, Chipotle has neglected the option to send its brand into the global competitive market due to potential risks involved. The original strategy was to “demonstrate that food served fast doesn’t have to be a ‘‘fast-food’’ experience. The “Food With Integrity” strategy is a combination of both intended and emergent strategies. The company is on its path of achieving the strategy. For example, Chipotle starts serving all naturally raised pork in 2000; all naturally chicken 2002, and by 2007, 60% of beef supplies are naturally raised. The company also has the ultimate goal of 100% natural beef.
Chipotle mission’s statement is “Food With Integrity.” Its primary goal is to serve all naturally raised meats in all restaurants.
Steve Ells is the founder and current Co-CEO of Chipotle. Steve is not a typical CEO with a business degree. He was a cook. He was able to combine his passion for cooking with current trends and continue to improve his product to serve his niche market.
In analyzing Chipotle’s current position to identify the strategies that the company should pursue, a SWOT analysis will give important insight into the business internal strengths and weaknesses in addition to the external opportunities and threats in which Chipotle could face.
• Chipotle does not do franchising. The company owns all restaurants. The advantage of this is that Ells can exert control over the operations over the entire operation and for Ells to give his employees a chance to become manager when new locations are open. This “promote from within” culture will enhance the working relationship and to motivate employees to perform. Starbucks is a great example of non-franchising company where employees’ job satisfaction is at 82% according to the Hewitt Associates Starbucks Partner Survey. • Strong financial performance year-over-year. Chipotle has grown rapidly in the last 5 years. The company added 129 new stores in 2010, added 150 stores in 2011 and plans on opening between 155 to 165 stores in 2012. Among the expected restaurant in 2012 is a restaurant in Paris, France. (CMG Annual Reports) Another Chipotle’s strength is that the company has no debt and $400 million in cash reserve. (http://money.msn.com/top-stocks/post.aspx?post=2fa57ca4-36cb-4cbb-9df2-92e277c605c4)
• High-profile locations. Many Chipotle restaurants are located areas that easy for people to visit. Some of these strategic locations include end of row shops, shops within a row, free-standing unit and in densely populated urban area. • Excellent supplier relationship with organic and natural producers. Chipotle carefully select organic and natural suppliers that share the same vision of “Food With Integrity” and willing to pay premium prices to acquire those ingredients. (http://www.chipotle.com/en-US/fwi/videos/videos.aspx?v=3) Key ingredients such as meats, rice, sour cream and tortillas are purchased from a very small number of suppliers. • Healthy and quality menu choices. As mentioned previously, Chipotle’s “Food With Integrity” uses only fresh all natural ingredients. By...
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