Chipotle Mexican Grill (CMG)
Title Chipotle Mexican Grill (CMG) Prefered Language style English (U.S.)
Type of document Case Study Number of pages/words 2 Pages Double Spaced (approx 275 words per page)
Subject area Business Academic Level Undergraduate
Style APA Number of sources/references 1
Chipotle Mexican Grill (CMG)
Headquartered in Denver, Colorado, Chipotle is a chain of about 1,700 restaurants in the United States, the United Kingdom, Canada,
Germany, and France, specializing in burritos, tacos, and salads. Chipotle is the Mexican-Spanish name for smoked and dried jalapeno
chili pepper. In a recent quarter, Chipotle opened another 45 restaurants, including 17 outside the United States. Chipotle Mexican Grill has a vision statement called Food with Integrity, which highlights the company’s efforts to use organic ingredients and to serve more naturally raised meat than any other restaurant chain. Through the company’s vision of Food with Integrity, Chipotle seeks better food from using ingredients that are fresh and sustainably grown, as well as raised
responsibly with respect for the animals, the land, and the farmers who produce the food. Chipotle has reported revenue growth of more than 20 percent annually in the last five years, while a rival, traditional, sitdown restaurants are slimming down and growing slowly. The entire restaurant sector is growing by about 1 percent annually. Considered to be one of the first so-called fast-casual dining establishments, similar
to Panera Bread (stock symbol = PNRA) and Moe’s Southwest Grill (private company), Chipotle is rapidly growing, while many mainstream restaurants such as Red Lobster, Applebee’s, Olive Garden, and even McDonald’s are struggling. Effective July 1, 2015, Chipotle extended many benefits, including tuition reimbursements, sick pay, and paid vacation, previously available only to salaried employees, to it’s part-time and entry-level workers. The new benefits are available to all hourly and salaried
employees, including cashiers and takeout specialists, who have worked at the company for one year. J. D. Cummings, Chipotle’s
recruitment strategy manager, states, “We want to invest in the best people we have and keep them with us; we want to recruit and retain high school and college students, a target demographic for entry-level positions.”Chipotle promotes nearly 1 00 percent of its managers from within, as it did
for 9,000 managers in fiscal 2014. The company also uses nontraditional marketing
practices such as producing Web videos, sponsoring food and music festivals, and partnering with local farmers’ markets. Recently, Chipotle tried to meet customer and societal expectations for the humane treatment of animals by withdrawing a popular pork product, carnitas, (slow-simmered pork) from one-third of its restaurants, because a particular supplier “was not treating hogs humanely.”
Chipotle’s actions, however, reveal how healthier, more humane options pose difficulties for any chain trying to balance price, standards, demand, and perception with profitability and growth. Chipotle’s
guidelines say “Pigs are to be housed in humane conditions with access to the outdoors rather than in pens.” The chain also tries to use antibiotic-free and hormone-free meat when it can, consistent with
Comparing Chipotle Mexican Grill to Panera Bread and Moe’s Southwest Grill Purpose
The company featured at the beginning of this chapter, Chipotle Mexican Grill, competes with Panera Bread and Moe’s Southwest in hundreds of cities. Gaining and sustaining competitive advantage is
something that both firms strive to do every day. This exercise gives you practice in identifying competitive advantages that could provide a basis for strategic action.
Step 1: Using the online databases mentioned in Table 3-8, and an on-site visit, conduct research aimed at comparing Chipotle versus Panera Bread versus Moe’s.
Step 2: Identify four competitive advantages that Chipotle has over the other two firms and four competitive disadvantages. Give a rationale and source for each of your identified factors.
Step 3: Discuss or write up how Chipotle can best sustain and promote its competitive advantages.
TABLE 3-8 Great Online Sources of Company and Industry Information
- IBISWorld-Provides online USA Industry Reports (NAICS), U.S. Industry iExpert Summaries, and U.S. Business Environment Profiles. A global version of IBIS is also available.
- Lexis-Nexis Academic-Provides online access to newspaper articles (including New York Times and Washington Post) and business information (including SEC filings).
- Lexis-Nexis Company Dossier-Provides online access to extensive, current data on 13 million companies. It collects and compiles information into excellent documents.
- Mergent Online—Provides online access to Mergent’s (formerly Moody’s/FISOnline) Manuals, which include trend, descriptive, and statistical information on hundreds of public companies and industries. Company income statements and balance sheets are provided.
- Regional Business News-Provides comprehensive full-text coverage for regional business publications; incorporates coverage of more than 80 regional business publications covering all metropolitan
and rural areas within the United States.
- Standard & Poor’s NetAdvantage-Provides online access to Standard & Poor’s Industry Surveys, stock reports, corporation records, The Outlook, mutual fund reports, and more.
- Value Line Investment Survey-Provides excellent online information and advice on approximately 1,700 stocks, more than 90 industries, the stock market, and the economy. Company income statements and balance sheets are provided.