Chipotle Mexican Grill (CMG) has been a standout performer in the restaurant industry for several years now. However, its shares fell by nearly 6% in a single session after investors weren’t too pleased with its recent earnings report. Altogether, the stock has corrected nearly 20% since its March high of $622.90. Can the stock bounce back from here? Or will it continue its slide? Let’s take a look at the pros and cons.
Pros
1. Quality food with integrity
The company is driven by a strong set of values, even if some of those decisions increase its costs internally. This is especially the case with the sourcing of its ingredients and meats. In fact, the high-quality ingredients and advanced cooking methods used by Chipotle are second to no other fast-food chain. Among recent developments, the leader in fast-casual dining concepts plans to become absolutely GMO-free by the end of 2014. Although the aim is not new, it shows Chipotle’s commitment to bring fresh ingredients to the table. Besides offering high-quality meals to its customers, the portions are generously sized and the value is unmatched. There are very few places that can fill you up for less that $10 with quality food, and not junk. The triad of fresh, pure ingredients, cutting-edge cooking methods, and tremendous portions gives Chipotle a mouthwatering appeal.
2. Expansion
New restaurant openings and comparable restaurant sales increases are important factors contributing to Chipotle’s increase in revenues in recent years.
As illustrated in the table above, the company has increased its restaurant-count by nearly 14% over the last three years. The management expects to open around 180-195 new restaurants this year. With that aim, Chipotle has already unveiled 44...
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...y ingredients in markets like China and India would be an arduous task. The commitment of quality may not be viable in most developing nations at present, which would keep Chipotle from meaningfully entering or expanding in these fast-growing markets. Ultimately, it would be a trade-off between growth and quality until the ingredient become widely available.
Conclusion
Although I am convinced that Chipotle is a wonderful concept with a proven track record as well as significant brand presence in the US, the return that an investor receives depends on the price paid for the shares, and with respect to that Chipotle doesn’t seem great. There is no doubt that the company has a lot of room for growth, even within the US, however it is likely to face considerable headwinds as it grows larger and larger. In view of such factors, the cons outweigh the pros of the stock.
...s are doing well and over the many years have gone up. The company has not lawsuits currently pending which is good. The company as a whole seems to be growing even when the market is down.
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. What 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 having 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 name of farmers everywhere. Perhaps the most well-known is “The Scarecrow,” a three minute ad that features some of the most haunting images Chipotle has ever featured. While “The Scarecrow” uses tear-inducing images and the almost eerie music to entice the audience to the company’s “free-range farming” ideals, it lacks substantial logos yet, it still
Chipotles has taken the market share during their launch of the new Vegan option. “Chipotle Mexican Grill introduced Sofritas, the first vegan meal offered by a national fast food chain that's not a salad or a veggie burger.” (Neporent, 2013). Taco Bell and Chipotle share the same market share, and there is a potential that
The article is talking about how Taco bell is inventing something that was supposedly existing. But taco bell had different ways of selling their quesalupas to people, their target market is usually the younger crowd looking for cheap good tasting food. So of course the people are going to go to taco bell, and try everything new that they come out with. Taco bell was striving to be different from other fast food places and brain wash teens into thinking their fast food, food, is better than all of the other fast food places. The article says that they are trying to copy REAL Mexican food, and taco bell is brainwashing people into thinking they are coming out with all of this “NEW” Mexican food. When in reality it is all just copied from old
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.
Chipotle competitive advantage or Strengths has come from the ingredients that come from sustainable sources. According to the MarketLine article about Chipotle Mexican Grill SWOT analysis "Chipotle serves food using naturally raised meat (pork, beef and chicken) and dairy cattle... in 2014 the company served over 155 million pounds of naturally raised meat." Chipotle cares for their customers because they are not giving us food that has hormones and addictive substances. Their competitive advantage has changed the company culture and mission Statement nowadays they called it now food with integrity, the idea that their food is made with the respect for the animals and the
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.
(2011, March 15). The. Retrieved March 19, 2011, from Fast Casual: http://www.fastcasual.com/article/179973/fast-casual-segment-outperforms-industry?rc_id=312. Form 10-K Chipotle Mexican Grill, Inc. (2011, February 17). Retrieved March 15, 2011, from U.S. Securities and Exchange Commission: http://www.sec.gov/archives/edgar/data/1058090/000119312511039010/d10k.htm#tx129308_27.
Walking into a Subway or Chipotle restaurant and seeing the antibiotic free sign can lead some consumers to believe that these restaurants are making them healthier. However, is antibiotic free meat really a thing? Well actually it is, in order for any meat to be served at a restaurant it has to go through the United States Department of Agriculture or USDA regulations to secure a healthy and nutritious product for the consumer. The regulations the meat has to go through help to make sure that if an animal was vaccinated with an antibiotic that the medication is out of the animals system. So what this means is that once the meat has passed these strict regulations then the meat is technically antibiotic free simply because it does not contain
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.
Chipotle is continuing to stay ahead of the curve and putting their focus now on the sustainability and farm to table concepts that are continuing to gain in popularity.
Similar to a fast food restaurant, but more upscale with a better dining experience. Ells idea of keeping the menu simple with limited items to prepare delicious food efficiently helped to create a kitchen different from other fast food chains. Food preparation areas in Chipotle’s kitchens are similar to those of fine dining restaurants. Menu items are prepared from scratch and with fresh ingredients. Even the meats are prepped with marinades. Creating such recipes is very labor intensive, but having limited items to prepare assists in keeping the cost down. The focus on menu integrity is one of Chipotle’s advantages and is a key element to their marketing strategy. One way Chipotle is able to control their ingredients and maintain menu integrity is by controlling their suppliers. After working with certain suppliers, they created a list of approved vendors for the individual restaurants to purchase from. One reason was to try and help control costs. Healthier food items cost more and Chipotle wanted to keep the cost of their meals low for their customers, so they built relationships with certain suppliers. Eventually, they began to use distribution centers across the country that only purchased ingredients from their approved suppliers (Gamble, Peteraf, & Thompson, Jr., 2015). This approach separates Chipotle from competitors like Taco Bell. Serving high quality food at a competitive price point against other fast food
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
Your and your friends decide that they want to go out for a girls night out. Watch a movie, shop and go out to eat. As dinner time approaches you are left with the decision of choosing what place would be the best choice for you to eat; Chipotle or Olive Gardens. You weigh your options and contemplate finally deciding to go with Olive Gardens. Although this is a phenomenal choice and is quite appetizing. You still wonder if the decision you made was the right one. However, it was a decision you freely made, or was it ? What if somehow some unknown factor helped to influence the choice you made. Every aspect of your life affects your ability to exercise the free will you were given. Whether it be culture, language, religion, family or friends
This statement shows that the company values the customer and wants to make sure that it can provide quality and good food for all customers. The customer-perceived value Panera wants to achieve is that it can provide high-quality food that is healthy and delicious and that it is priced reasonable. Panera understands the important of “marketing strategy – the marketing logic by which the company hopes to create this customer value and achieve those profitable relationships.” (Kotler and Armstrong, 72) The company sets itself apart from other competitors through their healthy marketing technique to provide healthy and quality food for all customers. They believe that serving food that they would feed their own families can provide the highest value a customer can want. In 2004 the company introduced chicken raised without antibiotics and many of the investors believed that this was the wrong move. The trade off to buy the more expensive chicken was to prove that it wanted the highest quality poultry to serve its customer. In 2005 the company committed to removing all artificial trans-fat, again showing that it wants to serve only healthy and delicious meals. In 2010 the company was the first national restaurant to display calorie information on its menu. This provided customer more information on how healthy they can be with the choices they were given. It also gave the company a chance to show how