Week 9 Project Deliverable 4 - Submit here

Strategy Development

Elhousany Abosamra

Dr. Evangeline Jefferson

Management Capstone - MGT 599

04/22/2019

Business strategy

Chipotle Mexican Grill, Inc. was founded in 1993 by Steve Ells. The first restaurant was located in Denver, Colorado. As a highly trained chef, Steve Ells focused on delicacies prepared from the best ingredients that have always transformed the “fast food” experience to an akin of dining. It is more than two decades and now there are more than 1600 restaurants operated by Chipotle Mexican Grill, Inc. Chipotle has pioneered various strategies in the market so as to outdo its competitors in the industry (Grill, 2007). Disrupting the Fast‐food Business is a new strategy that can help the organization standout more in this industry if properly implemented. This idea of disrupting the fast food business has become today’s fastest growing ideas in most industries. The strategy fist Chipotle Mexican Grill, Inc. as it defines the organization’s mission to continually strive to get better sources of food from its suppliers and also enable the company to grow and beat its peers in the fast food industry. This strategy also has the ability to make Chipotle Mexican Grill, Inc. outmaneuver the competitors (Grant, 2016).

Main strategies of Chipotle Mexican Grill, Inc.

Chipotle Mexican Grill, Inc. current strategy is to be a low-cost provider, broad differentiation, focused low-cost, focused differentiation, and best-cost provider. The management took the steps to ensure that the company remains top of its competitors. The company always seeks to differentiate its products and services from its rivals in ways that tend to appeal to its broad spectrum of consumers. The type of strategy is powerful as long as Chipotle is effectively innovative to outdo its competitors in attempting to imitate or copy its products. Chipotle provides food with integrity; it has large market composed of millennial, middle and upper class. The strategy fits the company’s situation in that the products are mainly raw, organic, and meat produce that are environmentally friendly. The strategy is helping the organization to achieve a sustainable competitive advantage by having a strong stock, good revenue, and fewer imitators (Grant, 2016).

Competitors

Chipotle Mexican Grill, Inc. main competitors include Taco Bell, Moe’s Southwest Grill, and Qdoba Mexican Grill. The companies deal with similar products but Chipotle Mexican Grill, Inc. is the outstanding among the three due to its competitive advantage strategy. The competitors like Taco Bell developed two strategies in order to keep up with Chipotle. Taco Bell’s strategies include innovative products and hitting on the trends. Taco Bell has revamped the items on its menu. It has a brand known as Doritos Locos that was released in 2012 that sold more than 1 billion units in its first year. The company has also made tweaks to its ingredients. This innovation significantly improved the sales of Taco that rose to 5% in 2013. The company has also hit the trend by creating an image as a late-night destination and snacking joints. The new brand started Happier Hour with laden griller burritos and small fountain drinks. These strategies have enabled Taco Bell to improve on its income and other business activities although Chipotle Mexican Grill, Inc. is still far ahead of it in operations. This can be attributed to the fact that Chipotle Mexican Grill, Inc. still controls the larger consumer market share. The competitive advantage offered by Chipotle Mexican Grill, Inc. is far much better than the competitor’s competitive advantage (Stevens & Lunsford, 2014).

Business analysis

The industry analysis entails a SWOT analysis of the company to understand the business environment (Grant, 2016).

Strengths

It is important to understand brand analysis, loyalty, reputation, and image. Innovative marketing and tech services are some of the strengths Chipotle Mexican Grill, Inc. is endowed with. The company also hires from within, therefore it recognizes talents within.

Weaknesses

Some of the key weaknesses include relatively high price of the menu, limited choice of menu, and availability of raw materials.

Opportunities

There are many opportunities in the industry for instance there is a lot of untapped potential in the regions and other countries. Addition of new items in the menu like beer is another opportunity for the organization to expand. Another issue that provides an opportunity for growth is the increasing trend of health awareness. Chipotle provides a menu that is conscious of individual’s health.

Threats

Analysis of threats in the industry is key for future development of the company. Competition from other key players like Taco Bell, Moe’s Southwest Grill, and Qdoba Mexican Grill pose some significant threat to the company. Unstable prices of raw materials and economic instability also affect business operations of the company.

Performance goals

The following are key performance goals for the next one year (Ragas & Roberts, 2009);

i. Increase in traffic on the business website. More traffic on the website directly translates into increased sales and consumer loyalty. This creates a better goal for the growing business in a competitive business environment.

ii. Start using social media in marketing the business. It is never too late to add a new marketing strategy to the business, and if the organization has been slow in the implementation of this, then this is the time to begin social media marketing.

iii. Create a new customer service program. It is imperative to set a communication goal that focuses on making the customer service process effective and exceptional. This can be incorporated into the social media practices.

The following are performance goals for the next five years (Ragas & Roberts, 2009);

i. Creation of new products. The company should look into ways of introducing new products in the menu like beer and other beverages.

ii. Open other business locations. It is time for the organization to think of exploring other regions for business.

iii. Revamp on the business plan. It is high time the company checks on its original business plan and evaluate where the company is placed based on the plan.

References

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. New York, NY:

John Wiley & Sons.

Grill, C. M. (2007). Food with integrity. Chipotle Mexican Grill.

Ragas, M. W., & Roberts, M. S. (2009). Communicating corporate social responsibility and

brand sincerity: A case study of Chipotle Mexican Grill's ‘Food with Integrity’program.

International Journal of Strategic Communication, 3(4), 264-280.

Stevens, N. L., & Lunsford, R. (2014). Beyond the burrito: Chipotle Mexican Grill's brand

extension. Journal of Business Cases and Applications, 12, 1.