Since Chipotle has determined the attractiveness of the industry, the restaurant formulates a strategy in view of Porter’s three generic strategies. In my assessment, Chipotle falls under the differentiation strategies. The elements that applies to differentiation strategies is a broad market and high cost. From their business philosophy that features “Food with Integrity” competes by offering a broad range of differentiation products at high prices. As a frequent customer I generally do not mind spending a little extra money on natural meats and fresh vegetables since I know their purpose is to know where all their sources are coming from and how it is maintained. They have a special pride to make sure the food is flavorful as possible and …show more content…
The root of the problem was the reliability of suppliers to deliver parts and ingredients chains. The lack of transparency and accountability across the supply chain, it was as difficult to monitor its suppliers in real time. It is not just Chipotle; many other corporations are concerned with this issue and have explored to find ways to fix the solution. The impact and accessibility that embraces the core drivers of the information age which are facts, information, business intelligence and knowledge are used at its prime and beneficial for companies such as Chipotle to resolve the problem. The information technology that corporation such as Chipotle are looking into is called Blockchain technology.
The core system of blockchain technology is supported by bitcoin; computers of separately owned centers follow a cryptographic protocol to constantly validate updates to commonly shared ledger. What this means for restaurants like Chipotle, using a blockchain to transfers title and record permission and activity logs so as to track the flow of goods and services between business and across the borders. The purpose of this distributed system is to control the institutions that are not aligned with standardizes regulations and
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The advantages as I mentioned earlier that a single company does not have control. The distributed system projects any problems of disclosures and accountability between the employees and the institutions whose interest is not aligned with their job tasks. This basically provides and exposes information in real time and removes errors with another’s internal records. This provides members of the network a tool to visible observe and track an activity along the supply chain. For instance, Chipotle could see in real time whether a properly credentialed person in a facility owed by one of its beef suppliers is carrying out appropriate sterilization and disinfection procedures. The disadvantage of the blockchain technology lies in the development and governance. A great deal of companies seek to protect their data and information from disclosing their market share and profits whereas public blockchain data is pulled from commercial and production activity would be cryptographically recorded in open ledgers. In addition to that we have the underling laws. For example, laws and regulation that monitors the commercial codes that govern the rights of ownership and possession under specific
New restaurant openings and comparable restaurant sales increases are important factors contributing to Chipotle’s increase in revenues in recent years.
Chipotle’s Chief Executive Officer, Steve Ells has been reputed for having started the restaurant chain in a unique way which has contributed to its apparent success over its main competitors. Chipotle business has grown exponentially from when it was first formed with most of this growth attributed to the founder’s control process in the business. When Steve Ells first got into the industry, he acknowledged the need for promoting innovation and
Their ability to encourage healthy eating, decrease service wait time and increase customer appreciation is the reason their sales has increase year after year. Once a small one-unit operation in Denver has now grown to a billion-dollar corporation. Chipotle food maximizes on quality and customers understand that quality comes with a price. For such a very limited menu, Chipotle cost more than most of their competitors operating in the same sector but it’s not unreasonable.
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.
Threat of Substitutes – The threat of substitutes is at a medium level because the differentiation of Chipotle’s
1.3 Market Segment Chipotle is classified in the restaurant industry as fast casual, a combination of the quick serve and the casual dining segments. Fast casual restaurants have the following attributes: high quality food, upscale atmosphere, higher check averages between $7-$11, and pay at the counter (What exactly is fast casual?, 2008). 2.0 Market Opportunity Analysis 2.1 Market Trends The restaurant industry grew to $403.5 billion in 2010, a growth of 2.1% from 2009 (Consumers still thrift when dining out, 2011).... ...
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.
Operations: Chipotle has set standards from when the food is bought, to when it's produced and to when it's sold. This quality control is performed by their Quality Assurance group, which foresees all of these positions.
Time, there never seems to be enough, which is why many people choose to eat out rather than eating at home. The fast food industry has many options; between the options are many similarities and differences that people seem to overlook. Going in depth to comparisons and contrasts between restaurant chains can be very insightful. Two of the most competitive restaurant chains are Chipotle and Qdoba; both companies are well-known and often compared, but are different from each other as well.
In visiting Chipotle’s website, it is adherently clear that they are trying to do a few things to overcome their recent faux pas from the past. Putting a majority of their site’s focus on their sustainability story, how they are helping the environment,
Abstract 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
Under corporate governance, the Board of Directors has majority power. After shareholders elect the Board, said Board selects the CEO who is responsible for managing the business. The key problem with Chipotle’s central and formal governance is that their strategy does not encourage innovation or employee moral. Instead, the Board of Directors decides what they feel Chipotle’s franchisees should implement, and tells managers to relay their decisions to in-store employees. Therefore, corporate representatives strive to improve in-store quality through strict supervision of each franchisee. They make decisions regarding all processes from the preparation of the product, customer service, and marketing strategies, which are enforced at each location. This system is slow and decreases efficiency. Since store employees are kept out of the immediate circle, it is difficult for them to have confidence in Chipotle’s operations, resulting in low employee empowerment. Two solutions to consider include bridging gaps between hierarchical levels and making the company more decentralized. Chipotle can implement a few liaisons (brokers and structural holes) to make sure that all professional networks within corporate and store levels are communicating effectively and working as a
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
Burger King’s core competency is fast food restaurant franchises specializing in made to order, flame-broiled hamburger sandwiches, particularly the “Whopper”. Using the strategy of industrial organization to capture market share Burger King offers a similar product (hamburgers) in a different way (flame-broiled). This strategy of product differentiation is part of the firm conduct category that Burger King uses to set itself apart from its competitors. In order to compete with its fast food competitors Burger King accentuates its core competencies in its marketing and product strategies, thereby leveraging market share.