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Global strategy for Chipotle
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Recommended: Global strategy for Chipotle
General Environment Analysis
Demographically Chipotle focuses the majority of its sales on individuals between 18 and 24 years old which is the same as Taco Bell (Hitt, Ireland, & Hoskisson, 2013). This could potentially be correlated to the on the go, fast paced life styles that is typical for this age demographic. Chipotle offers a customizable menu that that appeals to the young adult that is constantly on the move and have a tighter budget. Chipotle’s marketing strategies appeal to the young adult through their social media platform campaigns that gain the attention of the young adult. Millennials have had a large influence on the growth of the company that has locations “located at various location types such as end of row shops, shops
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Local products from local farmers are used to produce the highest quality products with the healthiest ingredients for consumers within Chipotle. Not only do they strive for better food but also healthier food for the customer. The inspiration for Chipotle starts with Steve Ells and is reflect into the company. Ells even testified in congress in 2009 in support of eliminating the use of antibiotics and hormones in ranching and farming (Ells, 2010). This is reflects back into the Chipotle company through their products and employees which in turn represents their amazing social responsibilities in the food service industry.
On the technological side Chipotle has turned their attention to bettering their services through a variety of channels. In 2014 Chipotle invest “$10 million to redesign its technology network and add mobile payments to its ordering app, among other improvements” (Wong, 2014). Also, with the emergence of services like Uber Eats and GrubHub Chipotle online ordering and delivery has never been faster. Payment processes have sped up which improves customs ability and convince which shows that Chipotle is focused on operational proficiency and customer
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Such factors may include threat of new entrants, power of suppliers, power of buyers, product substitution, and the intensity of rivalry among competitors (Hitt, Ireland, & Hoskisson, 2013). Since Chipotle was opened in 1990, they have already become a well-established company within the industry. In order for Chipotle to continue having a competitive edge in the market, they must heavily compete with companies or restaurants such as Qdoba that offer a wider variety of menu options for lower prices. Chipotle directly works with suppliers, usually in local areas, to permit more competitive prices to buy their products. Since Chipotle focuses so greatly on product quality, the supplier’s power plays an enormous role in Chipotle’s ability to obtain their raw
New restaurant openings and comparable restaurant sales increases are important factors contributing to Chipotle’s increase in revenues in recent years.
In recent years, it is not even necessary to turn on the news to hear about the bad reputation farming has been getting in recent years. With the media focusing on things like drugs in animals and Pink Slime, or Lean Finely Textured Beef, it is a wonder that people are eating “non-organic” foods. However, many pro-farming organizations have been trying to fight back against these slanders. Still, the battle is not without heavy competition, and a good portion of it comes from Chipotle, a fast food Mexican restaurant that claims to only use completely organic ingredients in their food. Chipotle is constantly introducing advertisements claiming to have the natural ingredients, while slandering the names of farmers everywhere.
Steve Ells founded Chipotle in 1994. When the company first opened its first restaurant, their model of business was a first of its kind. They operated a restaurant business that lies between fast food restaurant and fine dining. The management of the company pride in providing the customers with food services in a fast manner without necessarily the customers experiencing the literal fast food services experience (Ragas & Roberts, 2015). According to the company, their services are high-quality fine dining but delivered in a fast manner synonymous with the common fast-food experience. That model of business practiced by Chipotle has come to be referred as casual restaurant business model.
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.
With a unique appeal, a healthy and delicious product, and a powerful social message that made our target customers feel great about eating Chipotle over more traditional fast food, we have pioneered the fast-casual restaurant model our customers admire. Furthermore, our food sourcing is a rewardable effort and it is what we and our customers respect.
Chipotle is my favorite place to eat. As I am sure it is for other people. Chipotle is a fast food Mexican grill. They are most known for how big they make your burritos. Now it is fast food but it isn’t actually fast, they’re like a restaurant but without the wait. They serve all naturally raised meat and organic beans. So there food is pretty healthy and worth eating. The employees are always nice and it just a great place to eat over all. Chipotle is a great choice for a quick fast food stop because it gives great service, atmosphere, food and value. My experience there is always a good one.
The value is created in supply chain management by buying food from local farmers who have built a long-term relationship with Chipotle and meet the quality requirements. Operations is the primary activity which involves a quality assurance department who is charge of checking quality of food throughout the supply chain. The use of distribution facilities which make purchases from suppliers is a primary activity but also a costly one. Service must remain robust for Chipotle to keep increasing sales because this sets them apart from their competitors who are not know for good
Chipotle first opened its doors in Denver, Colorado in 1993, setting out to create a new experience for the fast food diner. They put together a simple equation of fast, fresh and high-quality ingredients and looked to change how people viewed fast food forever. Their simplistic approach has expanded across the years and although they still strive for the same fast, fresh and high- quality concept their views have expanded to include sustainability as one of their main pillars.
Taco Bell focuses a great amount of their marketing strategies towards the younger age group. They are usually marketing their products around “blockbuster” movies or popular action figures, and will usually offer some sort of marketing token with many of their meals.
When Chipotle first opened in 1993, the goal was to serve quality food fast, but not be considered “fast food.” To avoid falling under the fast food stigma, Chipotle strives to find the best ingredients with respect to animals, farmers, and the environment. In order to achieve these goals, Chipotle has created a matrix organizational structure that is divisional by location and functional by authority. Chipotle recently expanded internationally to the United Kingdom, Germany, and France, each following strict guidelines assigned by corporate employees from their headquarters in Denver, Colorado. Similarly, each location is functionally organized according to authority: regional manager, district manager, store manager, assistant manager, and
For every day after the negative financial news, the sentiment score would have lesser
My food choices are constructed primarily on functionality, price, and access, but rarely considers the overlooked and important ecological impacts associated with food miles. Right now, I choose my food based on nutritional value rather than comfort and price rather than locality. I balance the nutritional aspect by occasionally eating out and the price aspect by trying to eat local produce in the summer to reduce my impacts.
The ordering process sometimes is slow during the lunch and dinner hours. In order to reduce the waiting time, Chipotle created its mobile app recently. Hence, customers who place their orders using the mobile app can skip the line when they arrive and pick up their food directly at the payment station. However, only a few people
Pace is owned by Campbell Soup Company, and Old El Paso is owned by General Mills, both huge food manufacturers. In order to avoid brand parity with these big brands, Hector’s company and product need unique characteristics to give patrons a reason to buy Hector’s products. Both, Old El Paso and Pace, are not authentic companies because huge corporations run them (General Mills is located in Minneapolis, Minnesota; Campbell’s is located in Camden, New Jersey). Hector needs to capitalize on the fact that his salsa is not only superior but also authentic Mexican food. Such a product doesn’t seem to exist on the market yet. Thus, Hector could operate in a niche market of customers buying high quality, authentic salsa. Also, both major competitors do not focus on salsa. Hector has a salsa with unique texture and taste. A product with different features helps to avoid brand parity with
Chipotle Mexican Grill’s target customer is primarily millennials; more particularly millennials between the ages of 20-24 that are on the go, who are looking for fresher healthier quick order meals. (Schoultz).