I. Strategic Profile and Case Analysis Purpose: Chipotle Mexican Grill, Inc. is a chain of restaurants, which serve quality and taste food across United States, United Kingdom, Canada and France. The name Chipotle was derives from the Mexican Spanish name for a smoked and dried jalapeno chili. Steve Ells founded the company in July 13, 1993. Its headquarters is located in Denver, Colorado, USA. There are 1430 restaurants operating in 4 countries and have 37,310 employees as of 2012. It is one of the fastest growing U.S restaurants. Chipotle had a net income of $278 million in 2012. The Company’s restaurants serve menu of burritos, tacos, burrito bowls and salads. The main goal of Chipotle is to serve high quality, delicious food quickly with an experience that not only exceeded, but also redefined the fast food experiences. The always focus on sourcing the best possible ingredients, serving the tastiest food, and the most capable team. In past Chipotle only advertise on radio, billboards but recently they are using television and social media to advertise. They are also running various program, events and promotions giving out free food to potential customers.
Chipotle has the quote " Food with Integrity". The " Food with Integrity" refers to the people, animals, environment and FWI facts. Food with Integrity is good in order to help out with the health, economic condition of the surrounding the restaurant. We can find the food use by the different food industries but where does it all come from and how the ingredients are supplied have got different stories. In chipotle: the animals are raised naturally, it meant they are cage free. The animals chicken, beef and pork are raised without being trapped in the cage. The pork are raised outside or in the deeply bedded pens instead of being trapped in the steel cage. They are never given the antibiotics and are fed vegetarian. As well the beef are raised naturally in the large area, given them space to move around and feed naturally. The chicken is raised without adding growth hormones. All these animals, whose meat is sold in chipotle, are welled raised, keeping in mind the health of the consumer.
Chipotle has achieved customer satisfactions while maintaining a unique vision. Although Chipotle market domination continues on fast-casual restaurants business, there is pressure of rival chains that have the means and are moving quickly to expand both domestically and internationally. An increasing number of fast food and fast-casual restaurants are now using fresh and quality ingredients and marketing can affect market share of Chipotle in long run.
Mission Statement: According to Annual report of Chipotle, the company’s mission is the unique purpose that sets a company apart from others of its type and identifies the scope of its operations in product market, and technology terms.
Vision statement: To change the way people think about and eat fast food, chipotle does by using high quality ingredients, classic cooking methods, charging reasonable prices, having a distinctive interior design, and friendly people to take care of each customer. This is a fusion of fast food and fine dining called fast-casual dining (Annual report of Chipotle Mexican Grill, 2011).
Values of Chipotle: “Food with Integrity” is a value philosophy concept that Chipotle utilizes to enhance their vision. It involves searching out and serving the “highest quality ingredients that are grown or raised with respect for the environment, animals and people who grow or raise the food” (Annual report of Chipotle Mexican Grill, 2011).
II. Situation Analysis
A. General environmental analysis:

Fast food has become one of the world’s largest industries. People can go to fast food and get quality food instantly when they are hungry. It has reduced business of the restaurant, which takes long time to prepare food. It has change thinking and behavior of the people.
Economic Factor: Fast food industries are down because of the economic instability. Economic factor plays vital role in this industry because if the economic condition of the country is not overwarming, people might not be interested dinning out. Fast food company are offering $value product but still they are not able to gain market share because of economic condition. Chipotle products are expensive so if economic condition of country gets bad, people will not consume their product. The company needs all these animals, foods to be grown locally. This will help the local people with the economic condition.
Socio-cultural Factor: In chipotle there is no kid’s menu, which will obviously affect its revenue. More over they are focusing only on Mexican customer rather than other demographic. According to Chipotle, their number of women worker and men worker are almost same number. Chipotle being the environment friendly, most of the food used is organic, like 40% of the beans are organically grown, that refers the low use of the chemicals. The diary products produced by cattle's are free of rBGH (recombinant Bovine Growth Hormones). The chemical is used in order to make produce more milk from cattle, which is indirectly unhealthy for human. In order to follow with the food integrity quote.

B. Industry Analysis: Chipotle has four major areas of focus: web search, advertising, apps and mobile. There is always high threat of new entrants in fast food business. Although there are already big fish in the market but still there is high threat of new competitor in the market. There is high power of suppliers because there is limited supplier in the market. Moreover they can’t buy any product form supplier, they have to get the product, which make them different than other so there is high bargaining power in the hand of suppliers. The power of buyers is high because although Chipotle is gaining market share but the rate of customer switching from one fast food to another is high. The product substitute is high because on fast food business there are other big companies like McDonalds, Subway, and Panera Bread. They have lots of option in the market. The intensity of rivalry is very high because big companies like Panera Bread, Qdoba Mexican grill Pei Wei are main rival of Google.

C. Competitive Environment: New companies are constantly entering the market place and there are still big fish in the market like McDonalds, Panera Bread, and Pizza Hut. Chipotle faces numerous local and regional competitors including many privately owned and publicly held companies.
Panera Bread: Panera Bread is best known for its people as it provides the fresh and healthy food during its service hours. Panera Bread is the quick casual/ Bakery -Cafe with the several varieties of food like bread, bagels, muffins, sandwiches, hot Panini, salads, soups, coffee and teas. It is even rated as the number one for its Best Health Option, Best Salad. Panera Bread is the first in Bakery industry to post the calories information voluntarily in all company owned by it. People can easily get nutritional information from its website. The consumers even can calculate the nutritional information through the nutrition calculator provided in the website. Panera Bread is one of the main rivals of Chipotle. Qdoba Mexican Grill: Basically Qdoba serves traditional Mexican food similar to Chipotle. Fresh guacamole, slow simmered beans, slow roasted shredded beef and pork, and flame grilled chicken and steak are all key components of a Qdoba burrito. It also offers healthy and less filling options including its Mexican lettuce Wraps that were added to the menu in 2010. Qdoba franchises are largely responsible for its growth.

Pei Wei: Pei Wei offers both full-serving offering as well as a fast-casual option which help to gains brand loyalty. More over they also include Limited Time Offers on its menu three to four times per year. It also offers a limited alcohol selection that accounts for one to two percent of sales revenue each year. They have different strategy to attract customer, which help them to gain customer of Chipotle. They utilize a cooperative network of suppliers called Distribution Market Advantage to supply all its restaurant locations.
Revenue Comparision 2013

Source: http://seekingalpha.com
D. Internal Analysis: Every company has weakness and strength. The main strength of the internal environment is quality of Food. Chipotle has always focus on healthy and unique ingredients for their product that has helped them to gain competitive advantage over other rivals. Chipotle steady growth and strong financial statements make it highly attractive to investors.
III. SWOT Analysis: Strength: * It has brand loyalty because it is a well-recognized brand in United State, United Kingdom and Canada. * It has innovative ways of publicizing and advertising the brand. * All of the Chipotle restaurants are owned by the company and not franchised. * People can order online because it has online service for ordering and delivery. * Chipotle always focus on Environment. They use the ingredients grown or raised with respect for the environment, animals and people who grow or raise the food * Chipotle has created value in customer. It is well known for quality and tasty food. So it has positive brand image * Chipotle always focus on healthy food, they use naturally raised meat and organic ingredients in cooking. * Chipotle is in an excellent position financially. They got enough cash to invest in future research and development. They got around $220.0 million free cash flow, which will help company to continue growing. * They hire experience and quality employee. They have around 37,000 employees.

Weakness: * The price of chipotle is high than other competitor because they use natural and organic ingredient. * The have limited choice of menu. Basically they have only 4 items in their menu. * It is only presence in 4 countries. Out of those 4 countries they have major presence in United State and Canada only.

Opportunities: * International expansion is the main opportunities Chipotle has. Chipotle is slowly growing internationally. Developed countries like London, Australia and developing countries like China and India present a great opportunity where it can compete with McDonald’s. * Chipotle can add new items to the menu. There are many other products, which they can try to gain more customers and give customer more choice. * People are more conscious of their health. Chipotle always focus on healthy food so they have good future ahead. * They can launce new products like frozen food with Chipotle logo and put in grocery stores.

Threats: * Big brands like Yum Brands are huge threat for Chipotle because they are making new burrito and burrito bowl. * There is economic instability in United State. The price of input ingredient like meat and corn are going up so the prices of the Chipotle product with also increase. * In past Chipotle used to hire undocumented workers but because of new Obamacare they have to offer health insurance coverage to its employees. So the employee expenses will go up.

IV. Strategy Formulation:
A. Strategic Alternative: 1. Expand market especially internationally There are only six Chipotle Mexican Grills in London, five in Canada and one in Paris. There are others country like Australia, China, and India whose economy is booming. They need to expand their market to gain more market share and increase profit. There is already tough completion in USA so they have to explore more internationally. 2. Increase items in Menu: Chipotle Mexican Grill only focuses on four items, burritos, tacos, burrito bowls and salads. There is already tough competition in the market. It will be hard to survive in long run. Chipotle need to add more items to its menu. They can also add alcohol to their store, which will help to gain more customers. They also need to add kids menu, which will help to gain family customer 3. Continue Healthy food: They serve healthy and quality food, which is their main strength. Although their product are expensive but people are attracted to their product because of quality of food. So they need to stick with this strategy rather than going cheap and compromising their mission. 4. Increase Marketing: Marketing plays key role in success in business. People buy what they see and hear. Chipotle is really far behind its competitors in marketing area. We barely see their advertisement on television and listen in radio. McDonalds, Panera Bread are spending huge amount on marketing field. Moreover they can use social media like Facebook, YouTube, and Twitter to increase their marketing. They can organize different promotional event and free give away in college and university.

B. Alternative Evaluation: 1. Nature of business is changing. It is really hard to get success if you focus on one area or country. Companies are changing to multinational. They are focusing international because cheap labor cost and product cost. Economy of USA is not stable; they are going through rough period. So in this situation you need to explore to new market place especially to those country whose economy are booming. Countries like Australia, India and China are good market because of their economy growth. Especially fast food business is growing in Australia. So I think going internationally is one of the best option if the company want to gain more market, increase profit and dominate market share, 2. Adding item to menu will certainly help Chipotle to gain more customers. Different people have different choice. People want to eat different thing. But Chipotle only focuses on burritos, tacos, burrito bowls and salads. According to Law of diminishing marginal utility, people marginal utility will keep on decreasing if they consume same thing more. So people may get fade of taste of Chipotle and switch to product of competitors. So they really need to add more products to their service. This will also help them to increase their revenue. 3. Continuing on healthy, tasty and quality food will certainly help Chipotle to retain more customers. People are more conscious about their health than past. Now day customers are ready to pay any amount to get healthy food because they don’t want to compromise their health. This strategy will help to gain more customers and help to sustain in long run. 4. Marketing is one of the key parts in business success. This age is marketing age. People buy what they see, what they hear. Companies spend millions of dollar just for advertisement and marketing their product because they know marketing can easily put them ahead of their competitors. Chipotle is spending only $25,703 in marketing in 2010, which is less than Panera Bread. They are spending around 1.5% of their revenue, which is much more less in current market.
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In order to implement this strategy, Chipotle will have to strengthening its focus on area field. They need to hire experience and qualified employee in research field to expand their market. For the new innovation and the ability to grow depends directly on the human resource. So they will have to spend more on advertisement and marketing.
C. Alternative Choice: 1. Alternative one is the best strategy for the Chipotle Mexican Grill. Fast food in the world is decreasing except the countries like Australia, India, and China. In the first quarter of 2013 McDonalds has managed to gain higher profit although figure declined for the world, which indicates Australia is good place to expand Chipotle. In Australia 89% of the total population is urban population in 2009, which is good for business purpose. More over % of growth of import of food and beverage industry in Australia is higher than any other country in the world. Australia has 98.8% growth of import of food and beverage industry in last five year. So the food business can easily gain market share in Australia. The population growth rate in Australia is much more higher than other country. The population growth rate of Australia is 1.8% as of 2012. This will certainly help chipotle to grow rapidly. Per capita income of Australia is almost same like United State so people can easily afford Chipotle. Australian people are more tending towards healthy and active lifestyle so Chipotle is perfect fit for them. Australia is voted 2nd most ethical nation to conduct business with. The economy in recent year is growing continuously in Australia. There is “Bring Chipotle to Australia” fan page in Facebook. And there is hundred of likes. People have begged to bring Chipotle to Australia because they think it is healthy, tasty and quality fast food. So because of all those reason first option is the best one.
V. Strategic Alternative Implementation:
A. Action Items: * Focus on healthy, quality and tasty food. * Increase marketing and research field * Increase items on menu. * Increase market area. * Continually survey to find taste and preference of customer. * Shift focus to customer.

B. Action Plan * The marketing departments should research consumer wants, need, choice and preference and develop strategies. * The Research and Development departments should come up with new marketing area for expansion of business, especially international. * The Research and Development departments should be increase to compete in this tough economy. * The marketing and distribution team need to find correct channel to expand their business internationally. * Marketing team need to market their product on television, radio and social media. * Research team need to come up with new product to gain competitive advantage. * Human resource should hire qualified and cheerful employee.
Overall, Chipotle is doing good job to gain market share and be at the top of fast-casual market. They are slowly expanding their market nationally as well as internationally which will definitely help them to gain more market share and profit. They are trying to add new product to their menu and they are discussing to put alcohol too. They are continuing their objective of providing healthy, quality and tasty food. If the company continues their current mission and explores more market and increase product, their future looks bright.

Reference

“Annual Report” Chipotle Mexican Grill Inc, 2011
Hitt, Ireland & Hoskission, 2010, Strategic Management 10th edition
"Australia Inflation Rate." Australia Inflation Rate. N.p., n.d. Web. 13 July 2013. "MBASkool-Study.Learn.Share." Chipotle Mexican Grill. N.p., n.d. Web. 13 July 2013.
"Chipotle Mexican Grill." Wikipedia. Wikimedia Foundation, 24 July 2013. Web. 26 July 2013.