What Is Chipotle's Differentiation Strategy

Chipotle is in the fast casual industry where competition is extremely intense since there are so many different dining options. An industry like fast casual restaurants has a very high growth rate therefore there is not just one company that has the market cornered. What sets the restaurants apart is not cost but product differentiation; they position themselves in the market with their slogan of Food with Integrity. Since restaurants in the fast casual industry are priced fairly in the same range Chipotle uses different product features to set themselves apart from the others (parature.com).

The first value driver in Chipotle’s differentiation strategy is the product quality; they utilize local farmers who are conscience of the environment.

Chipotle has behavior norms in which its employees are expected to display within the restaurant, this includes official characteristics the firm requires them to exemplify (parature.com). These characteristics can be found in table #, they are not only important for customer service but also the career path that Chipotle provides for its top employees. Chipotle has a reputation for great customer service because they understand that they are only as strong as their strongest employee therefore they pay their employees on average more than their competitors. For example a line cook at Chipotle makes $10.93/hr while its direct competitor Moe’s Southwest Grill pay their line cooks only $8.38/hr

The firm is aesthetically pleasing, efficient and they have a distinctive interior. Chipotles serving line layout helps with their efficiency. This type of layout allows them to serve as many as two hundred customers and hour. Another factor that increases the brands value is the customization of food products it provides to consumers. Customers have the ability to add as many ingredients as they would like at a consistent price point, this added value increases the customer’s willingness to pay (www.fastcasual.com).

All of these different drivers allow Chipotle to earn high profits because they increase the customer’s willingness to pay. The differentiation approach has held strong for the brand since 1993. The strength of their stock, high yielding profits and imitating competitors are all examples of the differentiation strategy being a success within the firm.

Chipotle implements this differentiation strategy by promoting green farm to table. In order to spread awareness they launched an initiative to change the way people think about what they eat. At the same time they were able to build on their “Food with Integrity” vision. Also, in 2011 they had the “Cultivate a Better Worlds” campaign which aimed to tell consumers why Chipotles sources sustainable foods. They also created a Cultivate Foundation which focuses on providing farmers with sustainable resources to farmers while encouraging regenerative agriculture practices