Case 10- Chipotle Mexican Grill in 2012: Can it Hit a Second Home Run?
Small Quiz-Strategic Management
Felix Hedyanto Rulie-1342980281
Summary:
Chipotle Mexican Grill was established in Denver in 1993,by Steve Ells. Guided by conviction that food served fast did not to be low quality and that delicious food did not have to be expensive.
Menu & Food Preparation-The menu at Chipotle Mexican Grill was unusually limited: burritos, burrito bowl, tacos, and salads, plus soft drinks, fruit drinks, and milk.
Serving Orders Quickly-As Customer moved along the serving line, Customer selected exactly what they wanted and how they wanted it by speaking directly to the employees that prepared the food and were assembling the order behind the counter.
The Commitment to” Food With Integrity”-Use organically grown local produce, organic beans, organic dairy products, and meats from the animal that were raised in accordance with animal welfare standards and were never given feeds containing antibiotics and growth hormones to speed weight gain.
Supply Chain Management Practices-the company developed long term relationship with a number of reputable food industry suppliers that could provide high quality, fresh ingredients, and other products that meet Chipotle expectations. Chipotle utilized the services of 22 independently owned and operated regional distribution centers to purchase and deliver ingredients and other supplies to Chipotle restaurants. Chipotle personnel diligently monitored industry news, trade issues, weather, exchange rates, foreign demand, crises, and other world events so as to better anticipate potential impacts on ingredient prices.
Quality Assurance & Food Safety-Chipotle had a quality assurance department that established and monitored quality and food safety throughout the company supply chain and all the way through the serving line at restaurant.
Restaurant Management and Operations-Chipotle generally has 2 shift in each restaurant, and most employee were trained to work at various station. Chipotle executive sought to build people oriented , performance based cultures on each restaurant.
Marketing-Chipotle ultilized print, outdoor , transit, teathers, radio, and online ads
Restaurant Site Selection-Chipotle had an internal team of real estate manager that devoted substantial time and effort to evaluating potential locations for new restaurant. The site selection process entailed studying the surrounding trade area, demographic, and business information within that area, and available information on competitors.
Development and Construction Cost for New Restaurant-Chipotle has recently begun using a new , simpler design for its restaurant in order to lower the average development cost of new restaurant.
The ShopHouse Test Concept-The ShopHouse Southeast Asia Kitchen being tested from Steve Ells’s belief on same based as Chipotle but with Asian food.
Competition-Chipotle competed with national and regional fast casual, quick service, and casual dining restaurant chains, as well as locally owned restaurants and food service establishments.
Taco Bell-Taco bell new cantina bell were priced below similar types of chipotle product.
Moe’s Southwest Grill-the companies emphasizes on friendly hospitable services. The menu at moe’s featured burritos, quesadillas, fajitas,tacos,nacos,rice bowl ( chiken,pork, or tofu) , and salads with a choice of two homemade dressings and the main dishes could be customizes.
Qdoba Mexican Grill-Qdoba Mexican Grill billed itself as an “artisanal Mexican kitchen” where dishes were handcrafted with fresh ingredients and innovative flavors by a skilled cooks.Throughout each day at Qdoba restaurants, guacamole was prepared on site using fresh avocados, black and pinto beans were slow-simmered,shredded beef and pork were slow roasted and adobomarinated chiken and steak were flame grilled.
Restaurant Industry Statistics-nearly 75% of consumers said that they were more likely to visits a restaurant that offers locally produced food items. About 61% of the customer traffic went to quick services restaurant, while midscale restaurant and casual dining chains received 10 percent and 11 percent respectively.
Opinion-
SWOT Analysis
Strength- Serving Orders Quickly, The Commitment to” Food With Integrity”, Chipotle had an internal team of real estate manager that devoted substantial time and effort to evaluating potential locations for new restaurant. Chipotle ultilized print, outdoor , transit, teathers, radio, and online ads.
Weakness-Slightly more expensive than Taco Bell, the menu at Chipotle Mexican Grill was unusually limited, anddesign for Chipotle restaurant is very simple compared to other restaurant.
Opportunity- About 61% of the customer traffic went to quick services restaurant, while midscale restaurant and casual dining chains received 10 percent and 11 percent respectively. And nearly 75% of consumers said that they were more likely to visits a restaurant that offers locally produced food items.
Threat- a rising number of new quick services restaurant that offers Mexican foods.
Michael Porter’s 5 Forces Analysis:
1 Threat of new entrants-medium, to open a new restaurant new entrants needs to have substantial capital in order to operate normally.
2 Threat of substitute products or services-high, customer can choose other Mexican restaurant like Taco Bell, Moe’s Southwest Grill, or Qdoba Mexican Grill. Or even choose other restaurant in many types such as quick-services restaurant like McDonald’s, midscale restaurant or a casual dining chains.
3 Bargaining power of customers (buyers)-high, buyer had many options ranged from quick-services restaurant like McDonald’s, midscale restaurant or a casual dining chains.
4 Bargaining power of suppliers-low, Chipotle developed long term relationship with a number of reputable food industry suppliers that could provide high quality, fresh ingredients, and other products that meet Chipotle expectations. Chipotle utilized the services of 22 independently owned and operated regional distribution centers to purchase and deliver ingredients and other supplies to Chipotle restaurants.
5 Intensity of competitive rivalry-medium, because of medium threat of new entrants, high threat of substitute product or services, high bargaining power of buyer, and low bargaining power of supplier.