Chipotle Essay

For CEO, Steven Ells, the different components of Chipotle’s business-level strategy are key to the company’s overall success and profitability. In order to be successful in the fast causal, restaurant industry, Chipotle uses a differentiation strategy. According to Strategic Management, this is a “generic business strategy that seeks to create higher value for customers than the value that competitors create, by delivering products to services with unique features while keeping the firm’s cost structure at the same or similar levels” (Rothaermel 167). With this, Chipotle serves unique meals created using high-quality raw ingredients. Its commitment to serve “food with integrity” has changed the way people think about and eat fast food. In

To begin, the economy has expanded modestly since the recessions ended in June 2009. The current economic conditions are great for Chipotle, because consumers have disposable income to spend at their restaurants. In contrast, if another recession were to occur, Chipotle’s market potential would decline. This is because people would begin to cook at home or find other cheaper food alternatives. In addition, the case stated that Chipotle has higher than average food cost because of its sustainability practices. Their food costs are continuing to increase due to both its sustainable sourcing practices and a global increase in food commodity prices. Furthermore, compared to competitors, such as Yum! Brands, Chipotle return on investment is significantly less. This is due to the fact that is competitive as expanded rapidly into the international markets, while Chipotle is expanding at a less than moderate rate. Overall, I think Chipotle should expand both domestically and internationally. The more market share the company incurs, the better off it will be, especially in the case of an economic downturn. Through these new untapped market, Chipotle experience greater revenues, which will make up for the higher than average food cost if the savings are passed onto consumers. If the company does not prepare properly for impending economic and competitive