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Chipotle Mexican Grill Financial Analysis

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Chipotle Mexican Grill is an American restaurants chain that offers a focused menu of burritos and tacos. The company was founded by Steve Ells in 1993 with a vision of “food with entirety”. The company started its operations in the state of Colorado when it launched its first Chipotle in the city of Denver. Over the course of next five years, the company expanded its operations and successfully launched its Chipotle restaurants at several locations across the state of Colorado. Impressed with the proof of Chipotle’s concept, McDonald's jumped on the wagon in 1998 by acquiring small stake in the company which was later converted into the controlling stake in 2000. Over the course of next several years, Chipotle expanded its operations rapidly …show more content…

Chipotle continued its rapid expansion and transformed itself as a multinational fast casual chain with over 1,400 locations. The company’s impressive expansion is indicated by its financial performance over the las five years. The company’s financial analysis indicates that the company is in sound financial position as evident by the company’s profitability ratios, all of which are showing positive trend over the review period. The company’s current ratio indicates that the company has enough resources to meet its current obligations while the company’s leverage ratios indicates that the company is able to maintain perfect balance between debt and equity which is also evident by the company impressive return on equity ratio. (see financial ratios, Attachment A). Chipotle is continuing with its growth strategy and continuously working to diversifying its principal business. Recently, the company started testing its ShopHouse initiative with an aim to further diversify its business and expand its customer base by attracting new demographics. (see Opportunities, Attachment …show more content…

Supply chain is very important for Chipotle’s operations because of the fact that the company is dealing with small number of suppliers when it comes to key ingredients. The supply chain is becoming inefficient due to the company’s large footprints. The company’s supply chain is also subject to shortages and price fluctuations which is great threat to smooth functioning of the company’s operations. (see Supplier’s Power, Attachment B). The company’s main challenge is to fight its current and future competition, in doing so, Chipotle has alternative choices. To deter competition, the company needs to find a ways to attract new customers and the best ways is to make Chipotle stand out among competition. In doing so, the company need to focus on new innovations and continuously work on developing new menu items. (see Threats, Attachment C). Alternatively, the company needs to further diversify its business and expand its line of Asian fast casual restaurants. (see Opportunities, Attachment

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Chipotle Mexican Grill has been a very successful company since its inception in 1993. One of the biggest reasons for the company’s success is because of its marketing mix. Chipotle’s marketing mix of price, place and promotion will be analyzed to see which has provided success to Chipotle. This analysis will also help identify a marketing mix weakness of Chipotle.

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Business Policies, also known as Strategic management, requires students to write a report on a company of our choice. This is a capstone course, and therefore, this paper will demonstrate the culmination of every business class we have taken in our college careers at Bloomsburg University. The company our group has chosen to research is Chipotle Mexican Grill, Inc. The topics that will be explored in the introduction are what Chipotle is, information about the company, its vision and mission, the company's major products/services, the company’s past year performance, and the strategic management issues the company faces.

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Chipotle’s competitors have a difficult time competing against or imitating this competency because the times on Chipotle’s menu are tested and proven. Competitors don’t have the time or ability to test this concept or perfect their menu items. Chipotle on the other hand has been able to apply this limited menu style to the other ventures such as their two Shop House locations in Washington D.C. Another core competency, shown in Figure 1, is their dedication to high quality ingredients such as the organic cultivation of produce and naturally raised meat. Chipotle meets high customer expectations with their ‘Food with Integrity’ campaign.

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The original material of food cost of Chipotle operating costs is larger than other fast food restaurants, although this is a measure they have to implement to ensure freshness and health of food they sold, this is the reason for their high food prices. Even if the majority of customers are willing to pay for the higher cost of health food, Chipotle still should find out some effective ways to reduce the cost of their food in the future. Here are some suggestions: firstly,negotiate with the original suppliers to establish a long-term and stronger cooperative relationship to achieve a purpose of a certain reduction in the purchase price. Secondly, take advantage of suppliers’ promotional discounts. Attempt to make communications and collaborations

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Threat of New Entrants The threat of new entrants for Chipotle is low-to-moderate. Ambitious entrepreneurs open new restaurants regularly; however, it takes a significant amount of time and resources to develop the type of brand loyalty that Chipotle has successfully acquired over the years. Their name is well-known and customers remain loyal so others may find it difficult to compete in this industry.

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In 2013, Chipotle created a well made animation called The Scarecrow, For years many people speculate that all fast food restaurant are serving fake food, chemically produce products, and unhealthy food overall. Many fast food restaurant were left with that stereotype. Until, Chipotle demonstrating how their brand is a one of kind fastfood industry. The video got over 15 million views worldwide. The video became extremely popular, hit the hearts of their many viewers.

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CRegardless of Chipotles strengths, the company has encountered some weaknesses as well. In respect to future growth, Chipotle has seen some growth and are profitable, but there are some crucial factors that could be a warning sign of possible challenges. Chipotles principal weakness is its limited menu choices; there are basically customizable items on the menu that customers can order. Chipotle will have to offer more options to customers or increase marketing strategies; the main goal is to gain and retain customer confidence. Additionally, highly priced food items are another concern for Chipotle.

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If Chipotle is to be successful in this extremely competitive environment, they must identify all of the factors that may control their ability to

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Chipotle Mexican Grill is a fast, casual restaurant that is mainly known for its bowls and large burritos and became popular by advertising on all sorts of platforms like music platforms and others that may reach a younger audience. The company made its initial public offering in January 2006. The company’s main objective is “ensuring that better food is accessible to everyone” (Chipotle Website). The founder of Chipotle sought to change people’s perspectives on fast-food and wanted to change the experience as well which led to the success and increasing popularity of the restaurant.

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Expanding into new markets such as Southeast Asian Kitchen gives Chipotle a way to increase market share of fast-casual dining outside of the original “Mexican” food market. More specifically, Chipotle seems to be a strength leader of its competition by at least 1.0 weighted score. Key success factors include quick/efficient production, geographic coverage, customer service, brand awareness/reputation, and cost containment. One reason for the leadership advantage is Chipotle’s quick and efficient production while maintaining high quality This is something that competitors have a hard time imitating. Its small lack in geographic coverage and market scope are still

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Chipotle has suppliers that can provide high quality ingredients for their products, for a great price. New entrants will face high cost of ingredients due to the difficulty of finding suppliers. Another factor that creates high entry barriers for new entrants, is the brand loyalty that chipotle has. Chipotle has gain a relationship with their customers, due to the chipotle’s mission and values. Although the threat of new entry is low, innovation can break the barrier of entry and can lower the Chipotles profitability.

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The company was figuring out solutions and ideas to promote Chipotle even farther such as using more “owned media”, “Cultivate Chicago” and also community events. Chipotle also increased the use of social media in its marketing mix and gave customers new opportunities to access Chipotle in new ways that promoted convenience in exchange this gave Chipotle an advantage to engage with its customers. Also, this gave the company an opportunity to compete with its competitors. Chipotle competed with national and regional fast-casual service and casual dining restaurants, in addition to locally-owned foodservice establishments. More specifically, their competition include large chains such as Taco Bell, Moe’s Southwest Grill, and Qdoba restaurants.

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Restaurants come in many shapes and sizes. Some are large or worldwide and some are local. Each eating establishment has there own since of environment, people and food. The way all of these dots connect together effects what customers come and how they act within the space physically and mentally. Chipotle is a large Mexican food chain and Casa Nueva is a local Mexican restaurant.

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From this observation, we increase understanding that Chipotle management was able to have an increased understanding of various changes in the economic policies and their impact on business environments. As a result, the company would ensure strategic ways in the supply chain and in offering customer services to provide more revenues hence more capital for investment decisions. It is through the various investment strategies that the company has been able to increase its market capitalization. From the Global perspective, Chipotle needs to understand that there has been an increase in globalization, and most of its competitors are operating domestically and abroad hence the need to study the economic environments and situations to make a viable investment decision and

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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. Problem

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