Chipotle Essay

Chipotle

To formulate a strategy, one must understand what a corporate strategy is. According to Hitt, Ireland, & Hoskisson (2013, p.164) “a corporate strategy is a specific action a firm takes to gain a competitive advantage. Corporate level strategies help companies to select new strategy positions”.

Fast Casual Food

Moreover, Hitt, Ireland, & Hoskisson states that Chipotle primarily competes in the fast-casual industry (2013). The fast casual is not as established as other industries, but it is commonly defined as having higher prices, and better décor when compared to places like McDonalds (Hitt, Ireland, & Hoskisson 2013).

Therefore, Chipotle is emerging from a new business model or strategy. Chipotle current strategy is in the fast-casual

According to Macrotrends (n.d.) in 2010 McDonalds had a total of 4.37 billion dollar in assets, 2.93 billion in liabilities and a current ratio of 1.49. Additionally, they had net income 4.95 billion dollars Macrotrends (n.d.). The net income of McDonalds when compared to chipotle is massive, however, the current ratio of Chipotle is much better. If Chipotle decided to transition to fast food what are the chances of Chipotle overtaking McDonalds as the market leader and how long and how much money will that take? It is hard to speculate such things, but we know that Chipotle has found a market for their product and they are turning a healthy profit, therefore, it does not seem wish to change their business model to fast

is not a single entity, but in a corporation which several brands. According to Macrotrends “Darden Restaurants, Inc. is a restaurant company featuring a portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, and The Capital Grille” (n.d., para.1).

In 2010 Darden Restaurants had a net income of 440 million dollars over double that of Chipotle, but that is the revenue from over six different brands (Macrotrends, n.d.). Moreover, Darden Restaurants had a current ratio of .45 in 2010. Simply, what benefit does the slow casual dining experience model give Chipotle that they do not already have. Examining all the data it is clear to this paper that the best course of action or strategic alternative is to keep the same business model. In the slow casual restaurants model there appears to be lower profit margins. Whereas, in the fast food industry Chipotle could possibly be successful and become the largest fast food chain, however, there are many barriers and cost to entry that arguably that is not the best course of action for a possible