Chipotle Essay

Background of Chipotle

In 1993 founder and CEO of Chipotle Steve Ells opened the first location in Denver, Colorado. According to Stock and Wong (2015) for 8 years – from 1998 to 2006 – Chipotle developed its brand under the “corporate arches” of McDonald’s. Stock and Wong (2015), further stated that at the time of its initial public offering McDonald’s had invested approximately $340 million in the development and expansion of Chipotle. Through the years Chipotle has garnered a reputation as one of the leading fast food restaurants. The Chipotle menu consists of a Mexican based cuisine. Although Chipotle’s activities included creating burritos, burrito bowls, tacos and salads they are still considered a part of the fast food industry, and

The focal point of Chipotle was to merge high quality organic natural ingredients, delivered in a quick manner to busy customers. Thus embodying the swiftness of the fast food experience. To ensure the ability to be competitive, Steve Ells developed a cost effective strategy which would enable Chipotle to gain a distinct advantage over well-established market leaders, such as Pret A Manger, Le Pain Quotidien and Taco Bell. Thereby joining the new market in the fast food industry. Steve Ells, Founder, Chairman and Co-CEO of Chipotle stated the following as it relates to the release of the company’s 2013 financial results: “Over the past 20 years, we have created a very unique and restaurant company. Chipotle appeals to a diverse customer base throughout the country and beyond. We offer our customers a wide range of flavors from a concentrated selection of, top-quality ingredients that are expertly prepared by a passionate team of extraordinary people. Our focus on our unique people and food cultures has created an impressive demand for a restaurant experience that is redefining fast food for the better,” Chipotle Mexican Grill (2014). Chipotle has managed to open over 1500 restaurants with increased sales, since its inception in

The macro-environment is defined by Kotler et al (2004), as societal forces which exerts their influences on the industry, and thereby affects all fragments of the industry. Currently Chipotle is faced with a significant strategic issue: an E.coli outbreak in locations on both the West and East Coasts of mainland United States. According to Chipotle Mexican Grill (2015), on December 21, 2015 the Centers for Disease Control and Prevention (CDC) notified Chipotle Mexican Grill Inc., that they were investigating five cases of E. coli outbreak in their Kansas, Oklahoma and North Dakota locations.

Chipotle’s vision is stated as “Food with Integrity”. This vision however is being sorely tested with the recent health crisis. Chipotle is now faced with a severe loss in sales and customer confidence. Also within the framework of this crisis the company’s future and financial bottom line may be severely impacted.

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