Business Strategy

The fast-casual restaurant industry is moderately profitable, but profitability can vary depending on factors like location, menu innovation, and customer service. Chipotle has historically shown profitability, but it also faces pressures to maintain and grow its market share. The store that we are focusing on in New Jersey isn’t really busy in the morning but is busy after 4:00 PM due to schools and jobs being in close proximity and kids and adults alike loving Chipotle.

Chipotle's competitive strategy is primarily focused on focused differentiation and focused low-cost leadership. It emphasizes offering customizable, high-quality, and fresh Mexican-inspired food in a fast-casual setting. The company has also made efforts towards sustainability and ethical sourcing, which differentiates it from some competitors. Additionally, it has invested in digital ordering and delivery to improve customer convenience. It practices low-cost leadership because while Chipotle offers high-end ingredients they also want to make sure costs for food and labor are low so it can make a profit. Employees earn a minimum wage of $14.50 an hour in New Jersey and Chipotle customers are encouraged to give small portions of protein in order to save the restaurant some money. To address the threat of new entrants, Chipotle relies on its established brand, supply chain, and commitment to quality and sustainability. To manage supplier bargaining power, Chipotle's focus on local and sustainable sourcing helps maintain control over its supply chain. To deal with buyer power and the threat of substitutes, the company emphasizes customization, food safety, and healthier options. To navigate rivalry among competitors, Chipotle focuses on menu innovation, brand differentiation, and providing a unique dining experience.

Some of the primary activities of Chipotle include: Distribution, Operations, Sales and Marketing, and Customer Service. With distribution, Chipotle operates distribution centers throughout the country. These distribution centers optimize the supply chain, working with local food suppliers to distribute their high-quality supplies to each Chipotle franchise. With operations, Chipotle’s highly successful “assembly line” style of food service makes for a smooth influx of customers in a relatively short amount of time. Customers simply start at the beginning of the line, and employees craft their meals through the line. With Sales/Marketing, Chipotle has a large social media presence on all popular platforms, tailored to all demographics. Chipotle currently has 1.2 million Instagram followers, 1.3 million X followers, and 3.2 million Facebook followers. Here they promote new items, discuss their sustainability efforts and charity, and post the occasional meme to give their followers a laugh. With Customer Service, Chipotle takes pride in its ability to meet customer's orders as fast as possible. Their innovative assembly line process is highly efficient, which helps move customers along quickly. Chipotle’s mobile app is also up to the industry standard, with mobile ordering producing a considerable number of sales. Some business processes include: the Sales process, the Marketing Process, and the Manufacturing Process.

Chipotle’s manufacturing process involves the “manufacturing,” or cooking of their food in order to create meals for customers. This is an example of one of their structured processes. Chipotle uses only 33 ingredients for their meals, with no added preservatives or frozen ingredients. Chipotle uses grills, stoves, and boilers to cook their food, which then goes over to the display area where customers can create their meals. Chipotle’s marketing strategy makes it one of the most recognizable brands in the country. This is one of their dynamic processes. Chipotle uses its large social media presence, its highly successful mobile app, and its emphasis on quality ingredients to remain a staple in the food industry.

Their sales process is two-fold, with customers being able to order through their mobile app or in-store. In-store, customers are greeted by an employee who walks them through the ordering process, with the ability to customize their order to their liking, as they are walked through the assembly line through all the ingredients. In the end, they pay the cashier for the amount owed. On Chipotle’s mobile app, customers are also able to customize their order to their liking, and with fast queues, are able to pick their order up ready to go as soon as they enter the store. For mobile ordering, customers usually pre-pay through their phone and are able to scoop their orders and walk right out.

A single Chipotle restaurant can bring thousands of dollars in sales, to do so they need to use a point of sale (POS) system that allows them to process customers’ orders most efficiently. In this case, their streamlined-like system allows customer orders to be made accurately while reducing waiting time. This POS system also allows them to easily remove or integrate new menu items for display to the customers, enhancing customer experience. Chipotle uses the dynamic process system Customer Relationship Management (CRM) to collect customer data such as order history, frequency of visits, and order preferences. With CRM, Chipotle is able to leverage this information to its advantage with the segmentation of certain menu items for different locations. CRM also plays a role in Chipotle's rewards program on how many points are awarded and redeemed.

The menu of Chipotle, which is renowned for using fresh ingredients, consists of dishes including tacos, burritos, salads, bowls, and quesadillas. With a "food with integrity" ethos, the firm buys hormone-free beef and organic products. Additionally, Chipotle has vegan and vegetarian alternatives. Chipotle Mexican Grill is among the few establishments where one may get reasonably nutritious cuisine quickly. Consumers may choose whatever combination of items they like for their bowl or burrito, which is a huge benefit as it allows them to order a meal that best suits their preferences and requirements. Additionally, since customers feel more in charge of their eating experience, it makes for a more dynamic and interesting dining experience. Since it will be more difficult for customers to locate other restaurants that provide the bowl or burrito they created, this also promotes customer loyalty. Customers may earn points via the Chipotle app's loyalty program each time they make a purchase of food. These points may add up to a free meal. For the business, Chipotle Rewards has been an effective traffic generator and marketing tool. Chipotle Rewards is one of the largest membership programs in the business, with over 30 million members. Providing incentives for additional members to join is logical for the chain.