Group 4 MGMT 495
Devils Advocate: Chipotle
Chipotle has come a long way since the 1993 introduction of it’s 1-unit operation in Denver; now spanning into a 1,458-unit operation serving more than 900,000 customers per day in over 43 states. [Gamble] However, they haven’t been the only fast-casual restaurants to be successful. In 2012, 8 of the 10 fastest growing restaurant chains were classified as fast-casual restaurants—Moe’s Southwest Grill, Qdoba Mexican Grill, and Chipotle all among these leaders. A strength that is unique to Chipotle is their commitment to “Food with Integrity”. The transition to using organically grown local produce and naturally raised meats has proven profitable in today’s health craze, which has consumers looking for healthier, MSG-free products. This benefit helps distinguish themselves from their competition. Chipotle faces competition from every direction when it comes to quick serve restaurants. Two restaurants in particular, Five Guys Burgers and Fries and Jimmy John’s, are opening new locations faster than Chipotle. [Shaw] A threat of new entry comes into play with Noodles and Company, who have become an immediate hit by adding pasta to the array of fast casual options, taking the burgers and sandwiches industries by surprise. While none of these companies have quite lived up to the potential that Chipotle has created for themselves, they are quickly carving out chunks of market share; something that Chipotle should keep a close eye on. Chipotle’s recently introduced catering program is also an exciting growth opportunity. Panera’s current catering service is estimated to generate up to 8% of their sales. Although in it’s first quarter it comprised of less than 1% of total sales for Chipotle, management is expecting to generate as much, if not more, profit as the competition as customer awareness continues to increase. Taco Bell, one of Chipotles closest competitors, has introduced a Cantina Bell menu...
Citations: "Chipotle and Slow Food USA Launch New Partnership Supporting School Gardens." - MarketWatch. N.p., 8 Oct. 2014. Web. 08 Oct. 2014.
Gamble, John, and Arthur A. Thompson. Essentials of Strategic Management: The Quest for Competitive Advantage. Boston: McGraw-Hill Irwin, 2009. Print.
Shaw, Brian. "4 Ways for Chipotle to Continue Its Strong Growth." (CMG). N.p., 12 Jan. 2012. Web. 04 Oct. 2014.
Vasel, Kathryn B. "Chipotle: Guacamole at Risk From Global Climate Change." Fox Business. N.p., 5 Mar. 2014. Web. 03 Oct. 2014.
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