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Chipotle's Competitive Advantage

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As we known, the firm's resources include tangible resources and intangible resources. Intangible resources is more difficult to be imitated by competitors than tangible resources. Therefore, the intangible resources are more valuable and can bring a relatively permanent competitive advantage to the firm(HIH, 2015). Chipotle's overall organizational resources is good. As its mission said, food with integrity. It commit to providing high quality food that made with ingredients from more sustainable sources. Compared with its main competitors, the raw materials it choose are more natural and healthy. Meanwhile, the food it provide have the better taste and nutrition. As mentioned in the case, as of June 2012, CMG operated 1,316 restaurants …show more content…

By cost comparison, I found CMG pay more attention to the food itself. Compared with his main competitors, CMG invested more money on food and packaging. As the exhibit 3 showed, from 2009 to 2011, CMG's revenue, net income, total assets and net cash provided by operating activities all increased. As mentioned in the case, as of October 1, 2012, the stock price of CMG was $316.33 per share. In addition, as of third quarter 2012, CMG's revenue increased by 18.4 percent over the same period in 2011 and net income increased by 19.6 percent. And same-store sales increased by 4.8 percent in the quarter compared to 11.3 percent in third quarter …show more content…

First of all, CMG is commit to providing the very best sustainably raised food with respect for the animals, the environment as well as the farmers. In the meantime, the taste and nutrition of the food should be guaranteed. Second, CMG pay more attention to operational efficiency at the restaurant level because of its relatively higher food costs. The size of its restaurants is relatively smaller than those of its competitors. Besides, it keep its menu options limited and use an assembly line system for food preparation in order to decrease the labor cost. Moreover, its restaurant operation can adjust measures to local conditions. In the less densely populated areas, CMG open smaller restaurants and serve a limited menu. And CMG install solar panels in its restaurants and aim to be the largest direct producer of solar energy. It is very helpful to reduce traditional energy consumption and the company’s carbon footprint. Third, CMG implement the local sourcing program. That means the specified distribution centers serve restaurants in a specific geographic area. This seasonal produce program ensure the high quality of raw materials, reduce the transportation cost, promote the development of local family farms and improve the taste of the food. Last, CMG reduce its traditional advertising spending and its main promotion method is

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According to the Table 2, Chipotle had an excellent performance in 2015. However, they did not do well in 2016. Chipotle’s Total Revenue and Gross Profit have decreased in 2016, which is (13.26%) and (57.57%). There are three main reasons that can explain in the following. The first reason, Chipotle opened 240 new restaurants in 2016 (Chipotle Annual Report 2016).

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customers. The final value is added with good employees, great customer service and environment friendly practices and locations. According to the financial analysis Chipotle has a good performance. Asset turnover ratio of 1.592 in 2011 has decreased from 2010 but it still shows that Chipotle is able to convert its assets into sales very quickly.

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