Recommendations for Chipotle Mexican Grill Inc. Stars Consulting Group – Regina Ip
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Recommendations forChipotle Mexican Grill Inc.Stars Consulting Group – Regina Ip
Overview
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Company Issues – CompetitionsCantina Bell Menu
Impact on Chipotle: Loss on revenue and price-conscious customers
Background | Analysis | Recommendations | Implementations
4Background | Analysis | Recommendations | Implementations
Analysis: The Trend of Being Health Conscious
Background | Analysis | Recommendations | Implementations 5
Analysis: Fast Casual vs. Full Service Restaurant
Fast Casual
Full service
6Background | Analysis | Recommendations | Implementations
Recommendations
▪ Reposition themselves to the “full-service restaurant” segment
7Background | Analysis | Recommendations | Implementations
Recommendations:Reduce the pace of expansion
Chipotle opens approximately 50-60 new restaurants every quarter. For 2016, management expects to open 220-235 new restaurants.
If continue to expand
Possible Consequences
Deepening difficulty to maintain cash flow
Profit continues to decrease
More severe net loss
Implementations: Three Phases
Phase 1 Introduce Chipotle Mexican Grill full-service restaurants at selected locations in urban areas
Phase 2 Introduce to smaller cities and international markets
Phase 3 Continue Chipotle’s expansion gradually with careful selection of locations
Background | Analysis | Recommendations | Implementations 8
• Preferably 2,200 square feet or more• An initial investment will be required • Should take approximately 6 years
• Should take approximately 3 years
Recap
9
Q&A
10
ReferencesAlverez, A. (2016, May). Full-Service Restaurants in Canada. Retrieved from http://clients1.ibisworld.com.proxy.lib.sfu.ca/reports/ca/industry/default.aspx?entid=1677
Chipotle. (2016, April 26). Press Release. Retrieved from http://ir.chipotle.com/phoenix.zhtml?c=194775&p=irol-newsArticle&ID=2161714
Levine-Weinbery, A. (2015, October 25). Chipotle Mexican Grill, Inc. Is Taking a New Route to Revenue Growth. Retrieved from
http://www.fool.com/investing/general/2015/10/25/chipotle-mexican-grill-inc-is-taking-a- new-route-t.aspx
Nielsen. (2015, February 4). Younger Consumers Endorse Healthy Foods with a Willingness to Pay a Premium. Retrieved from
http://www.nielsen.com/us/en/insights/news/2015/younger-consumers-endorse-healthy- foods-with-a-willingness-to-pay.html
Wikipedia (2016, May 26). Chipotle Mexican Grill. Retrieved from https://en.wikipedia.org/wiki/Chipotle_Mexican_Grill#International_expansion
Appendix
10 Largest Cities in the United States 2 Cities in Canada
▪ Toronto, ON
▪ Vancouver, BC
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Background | Analysis | Recommendations | Implementations 13
Appendix: Fast Casual vs. Full Service Restaurant in US
Fast Casual
Full service
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