Nicole GlavanJennifer Bradley

Mark MonsonCorrie PatersonJessica Alfaro

Agenda❏ Introduction❏ Steve Ells❏ Visit to Chipotle❏ “Food With Integrity”❏ Business Strategy❏ Corporate Strategy❏ Recommendations❏ Questions

Introduction

❏ Industry: Mexican style food service restaurants

❏ Industry segment: fast casual dining

❏ Locations: over 1,600❏ Sales: $4.1 billion (2014)❏ Net income: $445.3

Million (2014)

Steve Ells❏ Co-CEO and Founder ❏ University of

Colorado❏ Culinary Institute of

America❏ Created Chipotle out

of passion for fresh, delicious food

Visit to Chipotle❏ Menu selection❏ Ingredients❏ Layout❏ Customize meals❏ Dining experience

“Food With Integrity”❏ Chipotle’s commitment to serving better

tasting food with organic and sustainable ingredients

❏ Crops ❏ Animals ❏ Non-GMO Ingredients

❏ Mission campaign has resonated with many people

❏ Unneces-scary

Business Strategy: Buyers

❏ Disposable income❏ Health conscious❏ Lifestyle brand❏ Low switching cost

and low-priced options

❏ Hard to subsitiute

Support local farmers with sustainable farming practices

❏ Produce travels no farther than 400 miles

❏ High food-quality standards reduce number of suppliers

Business Strategy: Suppliers

Business Strategy: Competitors

❏ Differentiated strategy

❏ Highly customizable menu

❏ “Food with integrity”

❏ Fairly high threat of new entrants

Business Strategy: Key Resources and Capabilities❏ Limited menu ❏ Strong management team❏ Strong brand name ❏ Relationships with customers and suppliers❏ Adapt to consumer trends❏ Innovative eye for design❏ “Four Pillars of Throughput”

Corporate Strategy: Vertical Integration

❏ Expansive list of suppliers

❏ Long-term relationships with local farmers

❏ Strict requirements❏ Focus on

maintaining integrity of its supply chain

Corporate Strategy: Vertical Structure

STRENGTHS❏ “Food With

Integrity”❏ Dedication to

quality ❏ Standard of

excellence

WEAKNESSES❏ Intricate supply

chain structure❏ Food

contamination❏ Demand for high-

quality, organic ingredients

Corporate Strategy: Diversification

Related constrained diversification approach

❏ ShopHouse❏ Pizzeria Locale

Corporate Strategy: Global Strategy

1,600 locations, but mostly domestic❏ 17 restaurants outside the United States❏ Risks

❏ High construction and operation costs❏ Finding reliable suppliers❏ Finding good management and motivated employees

❏ Centralized global strategy❏ Economies of scale and scope❏ Local, regional, and international markets

Corporate Structure: Networks and Alliances

❏ Business-Unit Level❏ Temporary partnership

with RED against AIDS❏ Tapingo ❏ Family Farmed

❏ Corporate Level❏ No franchising ❏ 100% company owned

in 2006

Corporate Structure: Organizational Structure

❏ Decision Rights❏ Compensation

❏ Front-line salary $28,000❏ Team manager salary

$133,000❏ Motivation

❏ Internal Promotion ❏ Employee performance

evaluations

Recommendations❏ Vertical Structure

❏ Maintaining public relations ❏ Long-term contracts with existing suppliers

❏ New Markets❏ Establish global brand❏ Local-responsiveness

❏ Organizational Structure❏ Encourage innovation at a local level

Questions?