Strategies and Tactics
In determining strategy and tactics, it is good to look at the overarching strategy of the marketing objectives for Chipotle before delving into the tactics involved.
Looking at increasing net margin by 3% in 2018 for Chipotle, Chipotle will need to push through the negative media attention they have received and once again become a much more competitively advantageous company. Chipotle should take a look into their day-to-day businesses and costs associated with that business. One notable fact about Chipotle is that they do not offer franchising opportunities. Franchising is a great way to revitalize business, especially in Chipotle’s current condition. However, since Chipotle is still not looking into franchising, they can look at reducing operating costs for
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They have focused more on “owned media and visible event strategies.” This is a good way to gain the attention of healthy bloggers, or parents trying to keep their family eating healthy, while living a busy lifestyle.
Overall, Chipotle has a good idea of their customer segmentation and how to position their brand. Even with their issues recently, Chipotle has continued to gain back their loyal customer base and keep their products relevant in the millennial sphere.
Push and Pull Strategies
Since Chipotle's main consumer target is millennials, it is more important to utilize the "pull" marketing technique, rather than the “push”. The “pull” technique focuses on “creating reasons and ways for consumers to find products,” using social media or social networking. Chipotle’s ads on Facebook and Twitter are able to reach a different demographic than widespread ads on the television networks would. Using topic keywords and online search optimization, Chipotle can directly influence the decisions of consumers using social media to gain information on restaurants. (Dontigney,
The fast food restaurant industry, which includes quick-service and fast-casual restaurants, is highly segmented with the top 50 companies accounting for only 25% of the industry’s sales. The $120 billion industry includes over 200,000 restaurants with 50% of those specializing in hamburger entrees. (hoovers.com 2008) The major competitors in the industry include McDonald’s, Burger King, Taco Bell, Subway, and KFC – Chick-fil-A’s major competitor in chicken sales. Chick-fil-A’s unique position in the market, specializing in chicken-based entrées, has lead to a competitive advantage which the company has been able to capitalize on. Recently, many competitors have added chicken entrees in order to compete in the market segment. Through marketing strategies and company initiatives, Chick-fil-A has tried to stay distant from competitors, offering a fresh alternative to the ordinary fast food restaurant.
As you know, Chipotle values our “food with integrity” promise and our customers respect that. However, the recent E Coli outbreak has caused Chipotle’s financial performance and reputation to suffer significantly and staying with our current business model is not our best option. Therefore, I recommend we rebrand and reposition Chipotle to ensure our long-term success.
Even though there are more than 1700 Chipotle locations around United States, Canada, United Kingdom, Germany, France, all of Chipotle's restaurants are company-owned, rather than franchised. Chipotle insisting on company-owned is an effective way to take control easily and ensure the high quality of food products. This is seen as a smart move because experienced individuals run all of the restaurants.
Distribution: Chipotle uses distribution centers to gather their industrialized food products and other goods to distribute to
Chipotle Mexican Grill has become one of the fastest growing fast casual restaurants with over 2010 locations worldwide, 45,000 employees and over 3.2 billion dollars in revenue (Cavanaugh, 2016). The company’s mission statement, “Food with Integrity” highlights the importance of using naturally-grown ingredients that are locally sourced when possible (Chipotle, 2016). Much of Chipotle’s success can be contributed to the quality of food, customer service, and the companies focus on sustainability from its food sources. Over the past 10 months, Chipotle has had a series of serious outbreaks of E. Coli, Salmonella and norovirus outbreaks at its restaurants. This has resulted in temporarily store closures; drop in sales and negative press. Chipotle
Any Chipotle I have always gone to have always had good service. Their employees are great. There is never a sour moment when you ask for anything, they are always kind and welcoming. I am always greeted with a hello and a smile when I step up to order. Even if the employee serving you has had a bad day it never shows, you would never know. Despite the lines being basically out the door every time you come (which is the only downside to coming here), the wait time can give you a headache. It is worth it, because Chipotle for sure serves fast food; they usually have three employees working to serve the food. One to get what you order prepared, one to add what extras you and to finish packing it and one to cash you out. The menu is very easy to read and figure out what you want. They have all of the print on the menu in white and big font so it makes it simple for everyone to read. So there isn’t any trouble ordering what you want. They have many different options to choose from as well. You don’t always have to get the burrito.
Now we will look at some of Chipotle’s biggest competitors. Although there are many, we will be looking at the ones that are similar in genre of food and the fast and fresh concept. The main three competitors that have been identified are Moe’s Southwestern Grill, Qdoba and Fuzzy’s Taco Shop. All three competitors have their own unique competitive advantages and distinguish themselves separately amongst their
Control systems – Costco has an Enterprise Facility Information management system, each Costco is connected to corporate, the EFIM provides real-time information, management of control systems (like energy), and an inventory management system that allows suppliers to monitor their own stock levels at any Costco. The EFIM reduces costs related to energy consumption, maintenance, and contracted services
A restaurant I frequently go to is Chipotle. Chipotle is a fast food restaurant that was established in 1993.Chipotle attracts various different audiences. The reason why I like Chipotle is because it makes me feel full. When I went to their fb page I notice they were promoting gift cards for Valentine’s Day. “Love is sharing your burrito” was their slogan. This slogan would attract couples. I saw that they raise fundraisers for different organizations. I remember on anniversary of Chipotle during a specific time they offered buy one get one per customer deal. On some holidays they offer buy one get another item half off. When there is deal like this it attracts men, women, and children. It can attract people in any culture when they hear this
Chipotle set a goal to adopt proactive approach to go beyond the industry norms and make a change to the food source, to be 100% natural, meaning that animals are free of hormones and antibiotics and their diet is vegetarian. It was almost unprofitable to switch Chipotles entire menu to 100% natural overnight. Chipotle adopted a “moving money” approach, which enabled the company to make a profit and at the same time improve the quality of the food that customers would value. From 1999 until 2007 the company was able to source 60% of the beef from naturally raised supplier, and it reached to 100% in 2013. Similarly, for chicken supply, it took Chipotle 11 years (from 2002 until 2013) to reach to 100% natural. Another effort for green marketing was to eliminate trans fats and purchase black beans from certified organic suppliers. With tremendous efforts and dedication in 2010 the company was already able to purchase 60% of the black beans from organic
This paper explores the business strategies Chipotle is using for operations. Analyzing financial and operations data to discuss areas of concern as well as areas where Chipotle Mexican Grill is doing well. Discussions will include the importance of Chipotle’s menu preparation strategy and menu integrity. The marketing strategies Chipotle is using to increase operations and strategies used to compete against rivals in the competitive environment. Concluding with an overall evaluation of Chipotle’s business portfolio.
The cost advantage and the economics of scale reached by the large companies are significant obstacles for new entrants. Meanwhile, customers often count on familiar brands, if the new companies cannot achieve product differentiation, it is hard to attract loyal customers. Chipotle which has already captured
...ealthy options on its menu, however this weakness could also be an opportunity as there is an increasing trend for healthy food options and McDonald's could turn this opportunity into a strength if it introduces a healthy burger. As previously analysed McDonald's isn’t competing with its competitors in healthy fast food and hasn’t tapped into the health food market which is a major opportunity for the company. Currently 28% of customers deciding on which fast food chain to visit consider whether a healthy option is available to be a major factor when deciding (EMMA Report, 2014) and if McDonald's can cater to this decision factor then they can appeal to the customers values and increase its market. McDonald's can use its strength in its advertising to introduce this new healthy product and reach a large audience in promoting the healthier choice that is on offer.
The fast food industry for example, McDonald, Domino Pizza, Dunkin, Starbuck, Wendy's, Papa John, Burger King, YUM and so on. All of this company is a monopolistic market. This is because these fast food companies fulfill the characteristic of monopolistic. The number of firms in monopolistic is less than perfect competitive market, but larges than the oligopoly market. The fast food industry is the franchiser, no all people able to open this franchise company in the market because need a larger money to buy the product brand name. For example the costs of starting an entirely new McDonald's restaurant can be anything between RM2.0 million to RM4.5 million. The costs also depend on the restaurant size and type, its location, style of decoration and landscaping. (Appendix 6.1)
Chipotle created a new niche of fast food restaurants reclassified as fast casual, bringing fresh food made with raw ingredients to the masses in a short amount of time. On an initial 85,000 dollars family investment, Chipotle has evolved into multi-billion dollar corporation. In 1998, McDonald’s made minority investment $ 360 Million dollars in the company and by 2001 they had grown to be the Chipotle’s largest investor. McDonald’s investment had allowed Chipotle to take advantage of its market and significantly expand. In 2006, Chipotle went public setting stock market records, gaining capital for growth, therefore paving the way for McDonald’s to divest and opt out with $1.5 billion dollars. Over the past 20 years, Chipotle’s market power has increased despite conventional barriers of entry. For instance, particular challenges that include barriers like regulatory rules and regulations (i.e. Licensing) can affect the operation of an organization. Chipotle is company owned and does not franchise. As per Chipotle, "keeping in good faith with their mission of Food with Integrity." (Chipotle, 2017) The company abides by the set guidelines of the government regulation of treatment of animals and the use of drugs in the food, which are essential input barriers on meat, dairy, and fresh produce products. The overall controls of these necessary