Chipotle Mexican Grill Incorporated Essay

1. Do you think CMG is a conquestful company?The Chipotle legation statement provender with integrity is our commitment to finding the very laid-back hat ingredients raised with respect for the animals, the environment and the farmers. It means serving the very outperform sustainable raised feed possible with an eye to spectacular understanding, great nutrition and great value. This is the context which Chipotle uses to determine their success. Chipotle has made a explosive charge a corporate passion. Not only have they lead the diet industry in sustainable food sourcing, they have expanded their doctrine to striving for LEED certification in their buildings. They pride themselves on providing the highest lineament food at reasonable prices. Does moral success trans youthful to financial success? Steve Ellis started a taco shop in Denver, CO with the intent of reinventing Mexi smoke food. He didnt necessity libertine food, he wanted echt food. Despite his nay-sayers stating no iodin would want to pay $5 for a burrito, no one wants to see an open kitchen and certainly no one al natural depression stand in line to have something assemble to begin with them, by 1998 he had opened 16 eating houses and McDonalds decided to buns his endeavors.With McDonalds investment, the company grew to 500 stores by 2005. By January 26, 2006, Chipotle made its initial public offering and in October 2006, McDonalds divested for $1.5 billion dollars. Financi every(prenominal)y speaking, net cash flows hang on rigid and positive. Their stock prices have rebounded very well since the financial split in 2009, where the price was $47.76 to today where it is currently $608.67. They atomic number 18 operating most 1800 restaurants including ChopHouse Southeast Asian Kitchen. In comparison to its contests, CMG spends less in constancy and building be. Where it consistently spends to a greater extentis in food and packaging, which actualises the mission of th e company. The table below reflects costs as a percent of taxationIn 2014, CMG change magnitude its food and packaging to 34.6% while decreasing its labor to 22% of revenue which is consistent with their core mission of providing quality food at a great value. 2. How does CMG compete?CMG takes a very diametrical approach to competition and marketing and advertising Our marketing strategy has ceaselessly been based on the belief that the best and most recognizable brands arent built through advertising or promotional campaigns alone, but sort of through all of the federal agencys people experience the brand. Out of import method of promotion is word-of-mouth publicity. CMG has taken conscious actions to decrease traditionalistic marketing methods by decreasing the advertising budget from an all-time high of $7.9 million in 2009, to $5.8 million in 2011. CMG markets through print, outdoor and piano tuner ads plus on-line advertising. Their goal is to target same(p)minded ind ividuals and organizations who believe in the nutriment with Integrity mission. They besides generate media coverage with their restaurant reviews about the quality of their food and their strong culture of doing the right thing in both aspect of their business.3. How do CMGs resources support the companys hawkish position? unitary area of resources is CMGs suppliers. In 2008, CMG launched a class to increase local sourcing of its food items. This program cut down on fossil fuels apply in transportation, gave local farms work and improved the savor of the food by using ingredients during their peak season. This local farm provide network provided lettuce, green peppers, jalapeno peppers, red onions and oregano. This program withal resulted in 5 million pounds of produce in 2009 and 10 million pounds in 2012, which is a huge boost in the local economy for the farms used in the program. In addition to the locally-grown vegetables, CMG used naturally raised meat, which is op en-range, antibiotic drug free and vegetarian fed. One hundred percent of the port, 80 per cent of crybaby and 50 per cent of beef used are in this classification. Additionally, all of the sour cream and chees came from cows that were not given the rBGH (human growth) hormones. While CMG would like to use all- organic fertiliser ingredients, the cost is still besides high, so they are doing what they can to cover up to keepthe prices reasonable and to turn profits. CMG is one of two Mexican fast-food chains that can say they use 100% fresh ingredients. there are no microwaves, freezers, or can openers in a CMG restaurant. This is a huge advantage for target consumer groups such as the Millenials who are smell for good, healthy fast food options by companies who practice corporate well-disposed responsibility. CMG is providing jobs to local farms, therefore helping improve the local economy in the majority of CMG locations. CMG is responding to growing health concerns in eating habits by providing fresh, organic ingredients and cutting down on the amount of food they serve with hormones, and so onBy using mostly organic ingredients, the food tastes better also. CMG also uses a vast majority of naturally raised meat which eliminates concerns of animal-rights groups. Finally, CMG is also looking into how to design and build restaurants which are more environmentally couthie and looking for systems to create more efficiency in daily operations. One way to do this is by using solar panels for energy. As of 2012, 3 of its restaurants in IL were LEED certified (Leadership in Energy and Environmental Design). This helps hack energy consumption and the overall carbon footprint. 4a. What challenges does CMG face in late 2012?From 2012 until present time CMG faces two major competitors in the Mexican Food market, Taco Bell as the fast food segment and Qdoba as the fast casual segment. Both competitors have updated their identity cards that tend to resemble CMGs but at lower costs. CMG handles their business in a way that is not as easy to copy but a competitor could try to imitate a product and possibly sell it for less. With CMGs stand on food that is raised with respect for the animal their products are more costly but have a better taste and greater nutritional value. This process has caused CMG to look into their pricing since food costs continue to rise. CMG does not want to deter customers to their competitors by raising prices too quickly.In this economy CMG is facing many challenges in the fact with the down in the mouth economy people are looking for quick service and or fast casual restaurants over full service due to cheaper prices and preservation time. CMGs competitor Taco Bell is also pushing a higher margin with a more aggressive menu and increased advertising. There also continues to be an overall increase infood prices that will eventually affect CMG and their margins with food products with their standards compared to their competitors. CMG has walked away from the conventional restaurant practice and spends more on food and they own their restaurants instead of franchising, and they take for grantedt advertise like their competitors. With these ideals CMG has structured themselves to be a strong restaurant chain and continue to be a formidable competitor.4b. How should Steve Elis and capital of Alabama Moran position CMG to respond to these challenges?CMG leases to continue to stay competitive by ensuring stability in input costs by engaging in forward pricing. CMG fatalitys to watch the economy and their competitors Taco Bell and Qdoba to begin with making any decisions on major pricing changes. They will need to continue to focus on investments and general overhead costs. Steve Elis and Montgomery Moran need to continue on the path of organic agriculture and the humane discussion of the animals they use as food. People will continue to respect and want to eat Food with Integrity. CMG will also need to continue to find new and innovative ways to advertise making for certain they solidify their reputation and push the freshness of their product. Health conscious individuals will see CMG as a healthier fare than other Mexican style restaurants.5. What would you recommend the company do?CMG should continue to focus on solidifying its reputation for freshness and offering a healthier menu than most competitors by continuing to use mostly organic ingredients and local farmers. They also need to continue to focus on using suppliers that support the humane treatment of animals. CMG can also continue to build the data link with millennials because generations after the millennials will likely follow suit. Furthermore, CMG can continue with lamentable away from non-traditional media and using more technology-based options. Finally, CMG should work on getting more restaurants LEED certified and share best practices amongst all locations on how to improve usable efficiency in order to keep costs as low as possible to offset the higher prices for organic ingredients. They need to be very intentional about not rising prices too very much higher than the competition otherwise they will price themselves out of the fast food industry.