Nicole Glavan Jennifer Bradley Mark Monson Corrie Paterson Jessica Alfaro
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Nicole GlavanJennifer Bradley
Mark MonsonCorrie PatersonJessica Alfaro
Agenda❏ Introduction❏ Steve Ells❏ Visit to Chipotle❏ “Food With Integrity”❏ Business Strategy❏ Corporate Strategy❏ Recommendations❏ Questions
Introduction
❏ Industry: Mexican style food service restaurants
❏ Industry segment: fast casual dining
❏ Locations: over 1,600❏ Sales: $4.1 billion (2014)❏ Net income: $445.3
Million (2014)
Steve Ells❏ Co-CEO and Founder ❏ University of
Colorado❏ Culinary Institute of
America❏ Created Chipotle out
of passion for fresh, delicious food
Visit to Chipotle❏ Menu selection❏ Ingredients❏ Layout❏ Customize meals❏ Dining experience
“Food With Integrity”❏ Chipotle’s commitment to serving better
tasting food with organic and sustainable ingredients
❏ Crops ❏ Animals ❏ Non-GMO Ingredients
❏ Mission campaign has resonated with many people
❏ Unneces-scary
Business Strategy: Buyers
❏ Disposable income❏ Health conscious❏ Lifestyle brand❏ Low switching cost
and low-priced options
❏ Hard to subsitiute
Support local farmers with sustainable farming practices
❏ Produce travels no farther than 400 miles
❏ High food-quality standards reduce number of suppliers
Business Strategy: Suppliers
Business Strategy: Competitors
❏ Differentiated strategy
❏ Highly customizable menu
❏ “Food with integrity”
❏ Fairly high threat of new entrants
Business Strategy: Key Resources and Capabilities❏ Limited menu ❏ Strong management team❏ Strong brand name ❏ Relationships with customers and suppliers❏ Adapt to consumer trends❏ Innovative eye for design❏ “Four Pillars of Throughput”
Corporate Strategy: Vertical Integration
❏ Expansive list of suppliers
❏ Long-term relationships with local farmers
❏ Strict requirements❏ Focus on
maintaining integrity of its supply chain
Corporate Strategy: Vertical Structure
STRENGTHS❏ “Food With
Integrity”❏ Dedication to
quality ❏ Standard of
excellence
WEAKNESSES❏ Intricate supply
chain structure❏ Food
contamination❏ Demand for high-
quality, organic ingredients
Corporate Strategy: Diversification
Related constrained diversification approach
❏ ShopHouse❏ Pizzeria Locale
Corporate Strategy: Global Strategy
1,600 locations, but mostly domestic❏ 17 restaurants outside the United States❏ Risks
❏ High construction and operation costs❏ Finding reliable suppliers❏ Finding good management and motivated employees
❏ Centralized global strategy❏ Economies of scale and scope❏ Local, regional, and international markets
Corporate Structure: Networks and Alliances
❏ Business-Unit Level❏ Temporary partnership
with RED against AIDS❏ Tapingo ❏ Family Farmed
❏ Corporate Level❏ No franchising ❏ 100% company owned
in 2006
Corporate Structure: Organizational Structure
❏ Decision Rights❏ Compensation
❏ Front-line salary $28,000❏ Team manager salary
$133,000❏ Motivation
❏ Internal Promotion ❏ Employee performance
evaluations
Recommendations❏ Vertical Structure
❏ Maintaining public relations ❏ Long-term contracts with existing suppliers
❏ New Markets❏ Establish global brand❏ Local-responsiveness
❏ Organizational Structure❏ Encourage innovation at a local level
Questions?
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