Case Study of the Strategic Issues of Chipotle Mexican Grill

Case Study of the Strategic Issues of Chipotle Mexican grillChipotle Mexican Grill is an American chain of fast casual restaurants shortly found in more than 1000 locations throughout the join States, United Kingdom and Canada. The chain specializes in tacos and burritos and has been in operation since it was founded in 1993. It is recreate by a board of four directors and a chair piece who is in any case the founder of the food chain and has its headquarters in Denver, Colorado. The troupe is listed on the New York Stock Exchange and posted a net income of US$178 million in 20101. It has a human resource of 26,500 employees.In 1998 McDonalds do an investment into the lodge that whollyowed Chipotle to pad quickly, however in 2006, McDonalds divested from Chipotle. In January 2006, the community made its Initial Public Offering to a very compulsive response from investors who were eagerly waiting on the listing of the companys shares since it had shown a notable sign of con tinuous growth and profitability. The share price doubled on the first day of listing as a public company.The company employs property financial and budgetary control systems that keep back seen it grow and expand without landing in financial crisis since it started operations. Multiple control systems are employ to ensure that the different restaurant maintain the company standards in the quality of products produced, employee welfare and1A., M,. Hospitality today an introduction. metropolis American Hotel living accommodations educational embed, 2007.upholding of the company policies and flush. The company encourages new innovations in its products and that is why they have any(prenominal) of the restaurants selling beer and margaritas depending on the location and demand from the clients. The company has focuse primarily on its initial core line of business enterprise which has proven to be an reward to the business because all emphasis is split upn to ensure the comp any mission is upheld without side destructions from extra deviations from the core business. Recent developments in the company implicateDec, 2010 Plans to on the loose(p) the first Asian casual concept restaurantDec, 2010 employ Chef Nate Appleman to develop new cuisineApr, 2010 Chipotle Q1 Revenues Up 15.6%Feb, 2010 Chipotle to open in Marion, OhioNov, 2009 Chipotle Finalizes spot In capital of the United KingdomNov, 2009 Chipotle Mexican Grill to de scarcely in LondonOct, 2009 Converted Organics Announces Tactical Relationship With IESI to Collect, Process And Convert Food wasteland 22J.R., Zapoli,. How to Succeed in the restaurant commerce Crunching NumbersnowThats the Bottom Line City 2005.Section 2 Key Strategic issuesDespite of its success, Chipotle does face break strategic issues that the company has to deal with. Due to its rapid growth and direct to keep increment, the company has encountered problems when raising the money to finance new operations since it is all company owned and does not franchise. The large act of outlets withal makes it difficult to ensure that company standards are met and maintained thus nigh outlets have lagged behind leading to embarrassing incidents like the norovirus outbreak in Kent, Ohio. The companys strategy still keep ons expanding and setting up new restaurants in key markets and offering new menus to bring home the bacon for different tastes thus sightly available near its clients with a choice of food and drink to cater for a wider trade thus remaining relevant. The company likewise faces study competition from other chain restaurants thus the need to come up with new innovations to attract and maintain clients. The company has also been implicated with the crime of employing people using fraudulent papers especially in its outlets in Minneapolis.Section 3 Analysis and EvaluationChipotles main challenge as a restaurant chain is to fight competition. Its main competitors include Qdoba Mexican G rill, Moes Southwest Grill, Rubios Fresh Mexican Grill, Pancheros Mexican Grill, and Baja Fresh. The company executives have set ways to make the company stand out amongst the competition in different ways that they hope lead enable the company to remain at the top and keep making profits as it has through with(p) since inception. One of the best ways is new innovations. This has been done by employing a new chef with vast experience to come up with new menus that will be tested in selected restaurants before the menu is adapted by all the restaurants. This is a gamble for the chain because it has had the same menu of burrito bowls, burritos, tacos, salads, respective(a) meats and extra dishes such as salsas, cheese, lettuce and guacamole which have been the restaurants signatures. The company has also been interrogation a childrens menu that is to be incorporated in all the restaurants to damp the children a fun menu to enjoy thus attracting more families and children to its restaurants. Innovations have also included plans to open Asian fast casual restaurants to give a wider choice to the company clients in the selection of food and drinks bit at the same time attract a new clientele of lovers of Asian food and drinks. The company has continued to open new branches all over the country and has even ventured in London and Toronto. This rapid intricacy has in the past proven a disadvantage for some companies but it is worth acknowledging that Chipotle has managed to handle the growth to its advantage and is a perfect ensample of what good strategies coupled with good management can result to. In spite of the rigorous aspects and challenges of rapid expansion, the company managed to be ranked as the eighth fastest growing company in the US ground on sales in 2009 and improved this to be ranked at position three in 2010 with a daily customer average of over 750,000 customers. Thus it is evident that this company has managed to expand in a profitable manner without even facing financial difficulties considering that it takes US$850,000 to open a new Chipotle restaurant.3A., M,. Hospitality today an introduction. City American Hotel Lodging Educational Institute, 2007.Strong and strict financial and budgetary controls have been employ throughout the company and this have enabled smooth foot race of the expansive business without financial problems. The money that MacDonalds had pumped into the company in 1998 was well used to fund the initial expansion and opening of new restaurants that saw the company restaurants rise in number from 18 in 1998 to 500 in 2005 3. This means that the company management did not first focus on paying themselves and issuing themselves huge bonuses rather the money was directed into the interests of the company. It is also worth to note that the founder of the company, Steve Ells was a graduate of the Culinary Institute of America in Hyde Park, New York and has remained the chairman and C.E.O of th e company he founded. The relevancy of his educational and professional background to the company success is that Steve had acquired the relevant association and expertise in food production thus had all the needed background to set up a restaurant since he often knew what he was doing in a restaurant setup. Secondly, Steves background reveals how he had capable his first restaurant with a loan from his father thus the man has good intuition on how to spend money and his presence on the board of the company has ensured that the same intelligent virtues he had used in the beginning of the business trickle down even when the business has enceinte to astronomical scales of success. Successful operational controls employed by Chipotle restaurants begin from the top. erstwhile the first restaurant was on its feet the founder focused on growing the business rather than working in the business. This is instrumental because most business people get buried in the day to day running of their businesses and forget the reason why they started it in the first place. Chipotle has invested heavily in operating systems that enable the smooth running of the company restaurants considering the huge number of customers that they serve. The company has introduced new ways to order and pay for food items online from the nourish of ones home or office and even has an iPhone application for the same helping targeting the technology servy clients. This company has an abstract way of advertizement. Instead of the traditional media lie advertisements on television, radio and print, it heavily depends on word of mouth for advertising and the use of billboards. The company also sponsors cycling events and runs many events throughout the twelvemonth where it offers free food to participants.Works SitedA., M,. Hospitality today an introduction. City American Hotel Lodging Educational Institute, 2007.J.D., Dittmer,. Principles of Food, Beverage, and Labor Cost Controls. City John Wiley Sons, 2008.J.D., Schmidgall,. Restaurant financial basics. City John Wiley Sons, 2002.J.R., Zapoli,. How to Succeed in the Restaurant Business Crunching Numbersnow Thats the Bottom Line City 2005.