Strategic Plan

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CHIPOTLE MEXICAN GRILL CASE STUDY 3

Chipotle Mexican Grill Case Study

Strategic Planning and Implementation

8/22/2021

Chipotle Mexican Grill Case Study

Chipotle Mexican Grill has been known as a successful restaurant in the hotel industry for a longer period. The company started in 1993 in a single location; however, by 2016, it had over 2,000 locations alongside having a casual dining category. The company has served its people and consumers for over 20 years without reports of food incidences. Unfortunately, in 2015, Chipotle faced serious incidences of notorious diseases, including salmonella and E. coli, affecting more than 600 people across 13 states (Thompson, 2019). Based on the directives from the medical authorities and the FDA, Chipotle closed its stores and spent a few months under investigation by the US health organizations such as the center for disease control and prevention. The company also faced criminal investigations and charges due to the illness incidences thereof. The closure of these stores was publicized all over the country, but in 2016, Chipotle tried to bounce back by changing food sources and preparations to win back its customers.

Factors contributing to the loss of trust and confidence in the brand

The company recorded a series of food-related illnesses between 2008 and 2018. After the 2015 incident, Chipotle management and leadership tried their best to win back the confidence and trust of the consumers. It started by shutting down all its stores in the 13 states. The company also accepted its mistakes and associated them with the fact that it uses fresh produce and meat, which might be the issue (Walker & Merkley, 2017). Therefore, the consumers lost their confidence and trust in Chipotle Mexican Grill because of its negative publicity due to the food-related illness outbreaks. The customers had the right to question the company's ethics and credibility in the restaurant business.

Actions Taken to Regain Customer’s Trust

Since the illness outbreaks at Chipotle, the management and leadership of the company have tried using several strategies to win back the trust and confidence of its consumers. Under the leadership of Brian Niccol, the company has focused on using fresh, nutritious, and quality food products. The company has also adapted to a test system where the food is analyzed before selling. It has created a feedback app to allow customers to order and leave a comment for reviewing purposes. These actions have shown that the company is willing to deliver safe and healthy food to its consumers, hence presenting a strategy to improve consumers' trust in the company.

Strategic moves and competitive advantage

Considering Chipotle’s top competitors such as Taco Bell, Moe’s Southwest Grill and Qdoba Mexican Eat, the company was considered “fast-casual” which provides a more upscale experience. Customers eat in Chipotle because they can customize their orders themselves which one of the company’s strengths in the restaurant business. More so, it is committed. It has changed its preparation methods and resolved to produce fresh and nutritious ingredients in preparing meals (Thompson, 2019). This has led to an improved and sustainable competitive advantage in the company. That is why by 2017, the company's sales had increased to $4 476.4 million.

Recommendations

I would recommend that Brian Niccol continues with his efforts towards regaining consumer trust and confidence in the company. Moreover, he can provide a variety of menus to the consumers while maintaining food safety and quality. Staying as health conscious as possible will help the company outdo stiff competitors such as Moe's Southwest Grill.

Business strategy for competitive advantage

The company can opt for a product differentiation strategy in its production of natural foods. This will help in differentiating its food products from those of its competitors. Alongside its efforts to safety and quality, Chipotle will maintain its competitive advantage in the long run.

References

Thompson, A. A. (2019). Chipotle Mexican Grill’s Strategy in 2018: Will the New CEO Be Able to Rebuild Customer Trust and Revive Sales Growth?.

Walker, R., & Merkley, G. (2017). Chipotle Mexican Grill: Food with Integrity?. Kellogg School of Management Cases.