Executive Summary and Over View.

Chipotle Mexican chain of restaurants is the famous brand in term of high food

quality and quick service. Chipotle Mexican Grill is known for chunky guacamole, large

burritos, tacos, and an assembly-production-line service which gives customers high

quality food with the speed of a conventional fast food restaurant. Business model of

Chipotle is built on simplicity by keeping the menu simple and serving high quality, free

range ingredients. THE MISSION OF CHIPOTLE: "ensuring that better food,

prepared from whole, unprocessed ingredients is accessible to everyone" and

THE VISION is "The future will focus on performance, simplicity and efficiency;

providing our customers with the healthiest, safest, most pleasure dining experience

possible" slogan of Food with Integrity shows how ambition of Chipotle that they want

to reach in providing healthy ingredients. In fact, the company gives customers more

naturally raised meat over the world which became the first national U.S restaurant

chain to serve dairy products with no growth hormone . Animals were raised in humane

environment with high standard. Chipotle's restaurants cover over 1,300 stores in 46

states in the US, France,.. While continuing to grow its presence in the United States,

Chipotle Mexican Grill should focus on upgrading menu offerings, expanding carefully,

and make sure that the company does not diviance from its already successful business

model. The company should also highlight and continue to promote its Food with

Integrity campaign and continue to maintain this differentiating factor between the

company and its competitors. By analyzing SWOT, Chipotle can understand

themselves and have the right decision in making plan. About strategy, they use high

quality food with classic cook methods; friendly to customers; using organic products

like meats and vegetables raised with welfare animal standard; serving a limited menu

with the ingredients were tested carefully.

1
 QUESTION 1:

The specialize in their core competence is their ability to offer high quality food at a

reasonable price. Chipotle's core strategy is focus on matching high quality food with

best price for customers .The promise of Chipotle for customer is making food without

unethical. prides . Chipotle went to go to the local producer that grew organically and

bring these good meats from farm with animal welfare standards. This ingredient was

being a part of the firms experience that called the Chipotle experience. That's why

Chipotle have commitment Food with Integrity. Chipotle choose suppliers

professionally that they worked with experts to exploit farms from all around the U.S to

choose suppliers who followed the Department of Agriculture's in term of the

environment to complete campaign of having "Food with Integrity". Up to now, Chipotle

still loyal with principle of keeping the integrity alive regarding their food even the cost

and supply are obstacles to the company that they must get over it. Chipotle kept very

good relationship with farmers that made a competitive advantage of this company.

Chipotle proud of itself because of stay steal with their value which they can bring to the

customers in term of food ethics. Chipotle in return, is put on a pedestal above other

places to eat because of their high quality and better for you ingredients"; makes it

become competitive adv while in U.S ethical and organic diet are leading the trend of

food culture.

Chipotle's menu is the second core competence of the company because of the

limitation and focus. It can be considered as a main competence because it's clearly

show the way Chipotle operate and gives value to the customer. Chipotle want to make

it simple that makes customers choosing their food faster and easier according to the

fact that most of customers don't have so much time so limited but unique menu, fast

service will satisfy customers more. The "unique" of Chipotle menu because Chipotle

2
spent at least 20 hours to test and improve their ingredients when the others can't in

term of time. The Chipotle menu is unique in it and offers customers a sense of freedom

to choose what they want without being bombarded with things they dont want.

Chipotle also concentrated in efficient and effective method of service for customers.

For example, while ordering customers can watch them preparing their items in form or

their eyes. This will make people trust more about the ethical in food and food.

Moreover, they treat different kind of people with different kinds of treats, like the person

who is lactose intolerant to cheese or the germ phobic man, employees at Chipotle

caters to the customers in every way. Chipotle setting which has a minimalistic

approach to their dining and prep areas. Chipotle's quick service will be another good

point because when people go to the restaurant they want to eat quick and healthy, two

things that makes competitive advantages of Chipotle.

QUESTION 2:

i. Strengths

Chipotle's customer service is quite friendly in all restaurants but keeping unique,

professional style to keep up with modern times. Proving an experience for their

customers that is unique which takes Chipotle to the higher position in customer's mind.

In the other hands, the management with efficiency and effectively. They cover market

by having location in 41 states of U.S. Low cost in marketing and advertising can make

Chipotle either makes more money or can lower price, leads to expand market's size.

Good relationships with supplier helps Chipotle having the good, high quality food

resources.

ii. Weaknesses

3
 Limited a focused menu that could be weak point when comparing with the menu

of other competitors, leads to less attractive in customer's mind .There will be something

that the competitors have but Chipotle doesn't. E.g. Moe's and Qdoba have Cheese but

not Chipotle. Another weak point is that customer have to take many steps to take a

reward or just simply receive the discount from Chipotle. This makes a little bit

inconvenient for customer with requiring a respect amount of effort.

Chipotle does have a weakness in their marketing strategy. They used their

owned media to marketing but the countable customers can be missed. They don't have

time to search a short firm, it's more inconvenient than seeing randomly in television

commercial with no effort for it.

iii. Opportunities

The trend in todays society is going towards a more organic lifestyle with natural

ingredients that goes beyond just America, but abroad as well. Canada will be the place

which can fit the strategy of Chipotle "reasonable price with high quality of food". They

also need to broadening menu by increasing some kinds of foods. Like KFC and Mc

Donald's, Chipotle have the potential to expand worldwide because of too many

competitive advantages.

iv. Threats

The biggest threat that Chipotle faces is the volatility of the prices of the crops for

their products and what they yield. The threat is the health conscious consumers and

chefs buying these natural and organic goods. The suppliers just cant simple keep up

with the demand of consumers and businesses wanting their organic goods. Chipotle

has started to use conventionally raised meats which could hurt their image which is all

about food with integrity. The economy is also a threat that is uncontrollable, but there. If

the economy were to spiral downward, consumer demand for restaurants like Chipotle

4
would go down because consumers would spend their money cautiously while cutting

out unnecessities. Technology in todays society is always a threat, especially in the

food industry and keeping proprietary secrets. If a recipe of Chipotles is leaked, people

could opt out and cook it themselves instead of paying a premium.

SWOT Analysis conclusion:

We can see more potential than the risks. They need to keep the good service

as strength while executive on opportunities. Chipotle should eliminate their weakness.

And the most important they must take the opportunity of expanding company as

international companies to improve and make more competitive advantages over rivals

not only in domestic market but in global.

QUESTION 3.

1. Primary activities

Operating systems: The quality and food safety are checked regularly by

Assurance Department to keep the standard.

Supply Chain Management: Chipotle has strong relationship with the suppliers

as farmers. This list of suppliers is narrow in term of their high quality of meat.

Distribution: They have some distribution location in order to make transactions

with their suppliers. Over twenty two distribution centers appeared which can supply

necessities but still owned in various regions. The number of distribution centers keep

increasing which reveals us their ambition of expanding.

Service: They has very efficient way of service which can give customer's order

as fast as Chipotle could. The way they let customer telling the employee what they

want shows their efficient. Customer can see directly how their meals is prepared so

salve people.

5
 Marketing and Sales: A short film "Back to the Start" was ran during the

Grammy's in 2012 . Chipotle gets attention by publicity because of simply telling the

favorite story about their company. Besides that, Chipotle makes a grand opening with a

massive deal of promotion that can make people understand clearer about the company

2. Support Activities

Research and Development, T&S Development: "Food with Integrity"

campaign was began In the early 2000s. They took tons of research to have a new

method to organically grow their ingredients. The purpose of researching was to ensure

their customer can get the healthiest products when they go to Chipotle.

HRM (Human Resource Management): The key to recruit their employees is

the ethic of doing . The expectation of company for employer is they want a hard,

enthusiasm and handling the hard circumstances professionally.

General Administration: Real estate managers were hired by Chipotle that go

to different regions and neighborhoods to find a location which they can build a new

Chipotle restaurant. This is not easy because they need to consider many factors which

can be their advantage or not. They already had opened 150 restaurants in 2011 and

have an ambition that can expand globally.

3. Five Forces

Because of the fact that they doesn't have a true competitors who can directly

make Chipotle worried about so the competition among rivals isn't high as the old day.

Demand of consumers in healthier options for foods, fast service are based on quality

are other reasons why competition with rivals is relatively low. According to brand loyalty

and equity, it is hard for competitors to join in this market so the threats is pretty low.

Threats of substitutes are from normal to high with Mexican restaurant available and

buyer switching costs are low. In this case, The Chipotle experience is not included in

6
the switching costs. It is not the power of Chipotle because of few buyers but they

consume large amounts of product so customer demand increasing. But the power

between suppliers are high because there aren't so many suppliers who can supply

natural and organic product and the important is Chipotle need these people. That's

make suppliers can set the price of the product.

QUESTION 4: What are the chief components of Chipotles strategy?

- Serve customer friendly and professionally

-Use a high quality food and classic cooking recipe.

-Taking care of environment by growing organically like food and vegetables.

-Maximizing operation efficiency and aesthetically.

-Concentrated on limited menu.

QUESTION 5:

Chipotle uses broad differentiation as competitive strategy. They targeted on

making different from the other rival with their service, high quality ingredients and

giving a unique experience to the customers That's why they can stand out from

typical fast food chain.

QUESTION 6.

Difference in making reception: Whenever customers go into Moe's Southwest

grill, there will be a voice "Welcome to Moe's"

Every meals are prepared with chips and salsa

There are variety of menu. For example, kids menu, vegetarian menu and glutton

free menu options.

Presence of soft drinks and beverages

QUESTION 7:

Chipotles financial statement seems to be good according to the profit ratios.

7
 Chipotles Gross profit margin was increased steadily (from 2012 at 27,1% to 2014

at 27,2%) . These good number mean that the company are doing business well. The

net profit margin Chipotle from 2012 to 2014 were: 10.2%, 10.2%,10.8%. These

numbers are continuing to increase.

Liquidity ratio shows how the company can handle their short-term debts. Chipotle's

liquidity ratio is growing very fast, it increases significantly from 2,93 in 2012 to 3,58 in

2014. We can see the company is running this business well because of consistency in

rising upward of the current ratio. That means Chipotle can easy control and cover their

liabilities. This will always be good new if Chipotle keeps the current ratio over 2.

Working capital was the second liquid ratio. Chipotle even have enough financial

resource to pay current liabilities, they also money for doing other activities like

expansion in financing. Working capital of Chipotle were: 359,755 (in 2012); 467,079 (in

2013) and 632,769 (in 2014) (in $000s). The increasing in working capital is good news

for Chipotle because they are strengthen their ability to pay off their current liabilities

and it seems to go upward in 2015. Debt-to-assets ratio nearly reaches to 0 so

bankruptcy of this company is impossible at that time.

Leverage ratio consist of "debt to asset ratio"," long-term debt-to-capital ratio"," debt-

to-equity ratio", it is pretty low at 0,01 to 0,03, that means the debt of Chipotle takes no

harm to the existence of the company

Overall, financial activities of Chipotle is quite good over years. The core strategy

seems working well based on the number and figures. The demand for Chipotle will

keep rising that we can foresee the bright future for this company.

QUESTION 8:

8
9
 Overall, Chipotle is the biggest competitor for all the outside competitor because they

have clearly competitive advantage aspect on all aspects, not only menu strength

(quality, customer's value, service, popular).They basically have a net competitive

advantage over all their rivals.

QUESTION 9:

Moe's Southwest Grill should consider as a strong rival to Chipotle in term of

massive resources and capabilities and it is a threat can hurt Chipotle directly. Moe's

have very smaller size if comparing with Chipotle but they have not only bigger menu

but varieties of menu for different types of customers (like cheese which Chipotle lack of

it). The menu cover large range of Mexican foods and new things that are limited.

Simply, It is having more than Chipotle's menu with very limited meals. They also have

options meals for some kind of. These two different chains when comparing with

regards to quality and service.

Does Chipotle have a good enough strategy and adequate resource

strengths and competitive capabilities to compete against Taco Bell?

Taco Bell has made big strides in providing healthier menu items. However, they

copied items of Chipotle with cheaper price. That wouldn't the advantage of Taco Bell

because Chipotle's reputation in term of quality is undeniable. Taco Bell made cheaper

price but also "cheaper" quality of food and dining experience. Chipotle is an opposite

side of it so they can keep continue spending on Chipotle's products instead of Taco

Bells. So of course, Chipotle doesn't need to worry about with Taco Bell unless Taco

Bell's quality reaches higher standard as Chipotle had.

Recommendations

-Expand their menu but still keep on improving their ingredients.

10
 - Supplier power is one of the big factor for Chipotle because there's strict list of

supplier who qualified Chipotle's standard. So my suggestion is they should start their

own farm and supply instead of bargain prices with suppliers.

- Expanding globally: With quality of food and service reach higher level than the

others rivals, Chipotle definitely can expand their market to Western countries with the

same trend of eating organic food as U.S

- They should keep giving more for social community as their strategy.

11