More Related Content
Similar to STRAT: Chipotle-1
STRAT: Chipotle-1
- 2. The story ofa simple line cook who reinvented the fast food industry in the 21st century. “There was no business plan,” he said on the podcast. “I was just making this up as I went along.” A fine dining mentality to the fast food industry with better and more sustainable ingredients. INCEPTION STORY Steve Ells, Founder
- 3. TIMELINE 1993 First Chipotle opens inDenver, CO 1999 First Chipotles established outside of Colorado: Minneapolis & Columbus 2000 Chipotle starts selling naturally raised pork 2001 McDonald’s becomes majority Chipotle stockholder, pouring in $350M+ over 8 years 1995 Chipotle expands with a second location 1998 McDonald's makes an initial minority investment in the company
- 4. TIMELINE 2004 Ahead of itstime - begins using zero trans-fat frying oil 2005 Altametrics - manages daily business operations: managing, inventory levels, food procurement, and production 2006 - McDonald’s completely divests from Chipotle - Chipotle goes public 2007 Chipotle begins serving naturally raised beef 2002 - USDA releases national standards that bring organic food into the mainstream - Chipotle starts selling naturally raised chicken.
- 5. TIMELINE 2009 Chipotle reconstructs its executiveteam 2010 NRN names Chipotle 3rd fastest growing restaurant; Consumer Reports: #1 Mexican Restaurants 2012 Chipotle agrees to join the Coalition of Immokalee Workers’ Fair Food Program 2015 - All time peak brought an average of 750,000 customers per day - Chipotle becomes the first major restaurant chain to start serving food entirely free of genetically engineered ingredients 2015-2016 E.coli, Norovirus, Salmonella outbreaks
- 6. TIMELINE 2016-2017 CEO turmoil 2017 Chipotle launchesits app 2018 - Brian Niccol, previous CEO of Taco Bell, steps in as CEO - Partnership with DoorDash 2018-2019 Stock up 240% since Niccol was named CEO 2019 Chipotle to pay $6.5M to settle class action suit over non-gmo claims
- 7. “FOOD WITH INTEGRITY” “WhenI started Chipotle in 1993, I wanted to demonstrate that just because food is served fast, doesn’t mean it needs to be typical fast-food, which relies on low- cost, low-quality ingredients. ‘Food with Integrity’ is about sustainable food, responsible treatment of the land, and care for animals. It is also based on the idea of including diners in the experience through an “open kitchen,” where you can see the ingredients and how the food is prepared. It is just like having a dinner party where everybody ends up in the kitchen.” - Steve Ells, Founder MISSION STATEMENT
- 8. OPPORTUNITY STATEMENT Chipotle MexicanGrill, Inc. operates in the fast-casual, franchised food industry. There exists an opportunity to further leverage quality ingredients and better prepared food in order to stand out within the fast food industry.
- 9. SIGNIFICANCE TO LEADERSHIP Ourstudy should be designed to uncover new sources of sustainable competitive advantage and to demonstrate to leadership how to use corporate level strategies to leverage new sources of competitive advantage .
- 10. SUSTAINABLE COMPETITIVE ADVANTAGE.. Sustainablecompetitive advantage is the leveraging of a company’s key strengths and assets to establish differentiation amongst competitors and to secure long term influence in its respective industry. DEFINING
- 11. z UNITY IN LEADERSHIP DIFFERENTIATIONFROM COMPETITORS SERVICE QUALITY ENHANCEMENTS INCREASE IN CUSTOMER PERCEIVED VALUE PREMIUM PRICES PREMIUM PROFIT MARGIN STRENGTHENED BRAND IMAGE 1. 2. 3. 4. 5. 6. 7. 8. EXPECTED OUTCOMES STRENGTHENED CORPORATE CULTURE
- 12.
- 13. SECONDARY RESEARCH For CredibilityPurposes, we used: - Environmental scanning - Gathered information about events and their relationships within the organization’s internal and external environments - Environmental monitoring - Gathered the most timely, relevant, and accurate information about the organization’s environment RESEARCH METHODOLOGY
- 14.
- 15.
- 16. Steve Ells Former CEO& Executive Chairman (1993 - 2020) ● Vision: bring change to the fast food industry ● Company Founder ● 2018-2020: Executive Chairman ● 1993-2018: Former Chief Executive “We decided long ago that we didn’t want Chipotle’s success to be tied to the exploitation of animals, farmers, or the environment, but the engagement of our customers.” LEADERSHIP STEVEELLS
- 17. Brian Niccol Chief ExecutiveOfficer (2018 - Current) ● Vision: brand visibility & digital expansion ● 2018-Current: Chief Executive Officer ● 2015-2018: Former Taco Bell CEO “The brand just became invisible. And we are working to make it more visible.” LEADERSHIP BRIANNICCOL
- 18. Marissa Andrada Chief PeopleOfficer (2018 - Current) ● Vision: employee driven, employee opportunities ● 2018-Current: Chief People Officer ● 2016-2017: VP of HR for Kate Spade ● 2010-2016: VP of Partner Resources for Starbucks “I am continually blown away by the number of stories I hear about employees who started at Chipotle ‘for a job’ and ended up with a career and life changing experience.” LEADERSHIP MARISSAANDRADA
- 19. Chris Brandt Chief MarketingOfficer (2018 - Current) ● Vision: digital efforts, retelling Chipotle’s story ● 2018- Current: Chief Marketing Officer ● 2016-2018: Executive VP & Chief Brand Officer of Bloomin’ Brands ● 2013-2016: Chief Brand Officer/Chief Marketing Officer of Taco Bell “I’ve always told my teams that our marketing job is threefold: We want to be innovators, storytellers, and collaborators” LEADERSHIP CHRISBRANDT
- 20. Curt Garner Chief TechnologyOfficer (2015 - Current) “We have a tremendous opportunity to further engage people who enrolled in the platform” “being able to use data and insights to shape experience is part of our focus” LEADERSHIP CURTGARNER ● Vision: Mobile App & Loyalty Program ● 2015-current: Chief Technology Officer ● 1998-2015: Chief Information Officer of Starbucks
- 21. Laurie Schalom Chief CorporateReputation Officer (2017 - Current) ● Vision: Strengthening Chipotle’s internal and external communication ● 2017-current: Chief Corporate Reputation Officer ● 2011-2017: VP of Public Affairs of Yum! Brands ● 1994-2005: Public Affairs Director of Taco Bell “I am thrilled to join the company to help shape and strengthen its strategic communications in support of a very important vision to make great tasting food, made with real, whole ingredients available to everyone” LEADERSHIP LAURIESCHALOM
- 22. LEADERSHIP SUMMARY OVERALL VISION “Wedecided long ago that we didn’t want our success to be tied to the exploitation of animals, farmers, or the environment, but the engagement of our customers” “Corporations are only as good as the people you have running them,” “I firmly believe that with the talent we have in place, we are making smarter decisions.” -Brian Niccol (CEO)
- 23.
- 24.
- 25. SUSTAINABILITY “Cultivate a BetterWorld” Food & Animals, People, & Environment “Sustainability is the backbone of that experience they’re creating and influences our strategy from our restaurants, to our company offices, to the farms from which we source our ingredients .” - Brian Niccol
- 26. CHIPOTLE CULTIVATE EDUCATION BENEFIT PROGRAM ●Began October 2019 ● Over $20M in tuition assistance ● In partnership with GUILD Education “Inclusion inspires mutual learning, development and career growth for our employees and results in further innovation and growth for the company. I firmly believe that we will grow Chipotle by growing our people.” - Marissa Andrada EMPLOYEE SUPPORT & DIVERSITY/INCLUSION
- 27. PHILANTHROPY ● The CultivateFoundation ○ Established in 2011 ○ “Making real food accessible for all” ● Food and Equipment Donation ○ Harvest Program: pairs each restaurant with a local charity or food bank ● Disaster Relief ○ California wildfire recovery efforts ○ Hurricane Florence relief “We understand that we are a part of the communities in which we operate.”
- 28.
- 29. CAREERS R E CR U I T I N G “Our managers are looking for great people who will help them ensure that every customer has an excellent experience at Chipotle. They don’t ask trick questions or try to scare candidates.” - LUCY, RECRUITING MANAGER AT CHIPOTLE
- 30. CAREERS R E CR U I T I N G INDEED ZIP RECRUITER LINKEDIN GLASSDOOR SNAGAJOB
- 31. CAREERS H I RI N G
- 32. CAREERS T R AI N I N G
- 33. CAREERS T R AI N I N G ACCELERATED TRAINING PROGRAMS ● Classroom setting ● Operational excellence and leadership
- 34. CASH & STOCK BONUSES MATERNITY/ PATERNITY COVERAGE LIFEINSURANCE & SHORT TERM DISABILITY CREW BONUS PROGRAM CAREERS R E T A I N I N G
- 35.
- 36.
- 37.
- 38. SOURCING ALL INGREDIENTS ARE SOURCEDFROM FARMS WITHIN 350 MILES PRODUCE AND MEAT ARE NATURALLY GROWN AND RAISED MEDICAL TREATMENT ACT -Support preservation of antibiotics -Reduce surplus of antibiotics given to farm animals
- 39. HEADQUARTERS ● Denver, Colorado(1993-2018) ● Newport Beach, CA (May 23, 2018) “I wanted us to be feeling good about what’s next, as opposed to dwelling on what’s happened in the past—both successes in the past and challenges in the past” - Brian Niccol
- 40. LOCAL GROWERS SUPPORT Initiativeto help local farmers Three Key Objectives: Education and Training Financial Assistance Develop new partnerships
- 41. RESTAURANTS ● All restaurantsare company- owned ● 2,600 restaurants in U.S. and international ● Expanded to Canada, U.K., France, and Germany ● More than 83,000 employees ● Queuing System ○ Established by Ells ○ Customization for the customer
- 42. ● Few franchisessold in the beginning ● Chipotle currently has complete corporate ownership and control ● Does not allow licensing - domestic nor international LICENSING
- 43. STORE FRONT DELIVERY PICK UPORDERS CATERING DISTRIBUTION
- 44.
- 45. COMPETITORS Characteristics of Competitors: -Within fast-food industry - Targets on-the-go customers - Efficient food service
- 46.
- 47.
- 48.
- 49.
- 50.
- 51. CURRENT RATIO CHIPOTLE MCDONALD’S YUM!BRANDS Current Assets _____________________ Current Liabilities
- 52. QUICK RATIO CHIPOTLE MCDONALD’S YUM!BRANDS Current Assets - Inventory _____________________ Current Liabilities
- 53. CASH RATIO CHIPOTLE MCDONALD’S YUM!BRANDS Cash ______________ Current Liabilities
- 54. DEBT TO EQUITYRATIO CHIPOTLE MCDONALD’S YUM! BRANDS Total Debt _________________ Total Equity
- 55. INVENTORY TURNOVER RATIOCHIPOTLE MCDONALD’S YUM! BRANDS Sales _________________ Average Inventory
- 56. PROFIT MARGIN RATIOCHIPOTLE MCDONALD’S YUM! BRANDS Net Income ________________ Revenues
- 57. EARNINGS PER SHARECHIPOTLE MCDONALD’S YUM! BRANDS Net Income _____________________ Weighted Shares Outstanding
- 58. PRICE-EARNING RATIO CHIPOTLE MCDONALD’S YUM!BRANDS Stock Price ________________ Earnings per share
- 59. FINANCE SUMMARY 1. Strongtechnical financials 2. Impressive rebound since 2015-2016 dip 3. Digital sales has led charge to increase revenue 4. Constant re-investment in expansion
- 60.
- 61.
- 62.
- 63. PRODUCT DIFFERENTIATION ● Locally Sourced,High-Quality Ingredients ● Classic Cooking Techniques ● Highly Customizable Menu ● High Talented Restaurant Team ● Aesthetically Crafted Store Design ● Integrated Sustainability Practices ● Customer Driven Experience ● Efficient Mobile Ordering ● Catering
- 64. PRICING METHODOLOGY Valued BasedPricing Premium Pricing Policy
- 65. PLACE ● Chipotle sellsthrough 3 channels: ○ Main stores ○ Chipotle Mobile App ○ DoorDash App ● Located near college campuses, shopping centers, and urban areas
- 66. PROMOTIONS Integrated Marketing Communications FrontEnd Awareness Tools ● Advertising ● Public Relations Front End Response Tools ● Sales Promotion Back End Tools ● Personal Selling ● Direct Marketing
- 67. ADVERTISING Chipotle’s Advertising and Marketingbudget from 2019: 141.57M Chipotle Mexican Grill's advertising and marketing cost worldwide from 2006 to 2019(in million U.S. dollars)
- 68. ADVERTISING ● Measurable: SocialMedia, Website, & Mobile App ● Non Measurable: Print, Television, Radio, Outdoor
- 69. PR ● Non-Paid BroadcastMedia ○ Focusing on becoming more engaging, visible, and culturally relevant ● “For Real” Campaign ● “Behind the Foil” ● Sustainability “I just really believe the brand had gotten into this position of being very defensive, as opposed to talking about what made the brand great” - Brian Niccol
- 70.
- 71. PERSONAL SELLING -FRONTLINE EMPLOYEES
- 72. DIRECT MARKETING - July2016 - Chiptopia - March 2019 - Chipotle Rewards LOYALTY/REWARDS PROGRAMS
- 73. DIRECT MARKETINGwww.chipotle.com SIGN UPFOR CHIPOTLE REWARDS ORDER DIRECTLY FROM THE SITE
- 74. DIRECT MARKETING CUSTOM CATERINGMENU NUTRITION MEASUREMENTS SPECIFIC TO YOUR MEAL www.chipotle.com
- 75. DIRECT MARKETINGCHIPOTLE APP -ORDER FOR PICKUP OR DELIVERY - FIND CHIPOTLES NEAR YOU - ACCESS REWARDS DIRECTLY FROM YOUR PHONE
- 76.
- 77. MARKETING SUMMARY ● SocialMedia driven ● Sales Promotions ● Direct Marketing channel ○ Website ○ Mobile App ○ Social Media ● Educating Customers On Food Quality
- 78.
- 79.
- 80. DIRECT COMPETITION INTRODUCTION ● HighQuality ingredients with cheaper prices ● Competitive Advantage ○ Queso and Guacamole without extra cost MISSION STATEMENT “At Qdoba, our mission is to create a welcoming environment for our customers with high-quality menu items featuring bold flavors”
- 81. DIRECT COMPETITION INTRODUCTION ● HighQuality healthy food ● Competitive Advantage ○ Customer service ○ Nature of bakery products MISSION STATEMENT “A loaf of bread in every arm”
- 82.
- 83.
- 84.
- 85. TECHNOLOGY ● Food DeliveryServices ○ Partnered with DoorDash ○ Order directly on mobile app or website ● Digital Technology (App) ○ Mobile Order (Pick-up, Drive-thru, or Delivery) ● Virtual Reality ○ Train new employees ● Kiosks/Tabletop tablets ● Automated purchasing tools
- 86.
- 87. INDUSTRY CONSUMER ● Demographic ○Millennials 20-35 years old ○ Well educated ○ Middle class ● Psychographics ○ Health Conscious ○ Value Social Corporate responsibility ○ Value sustainable Environment
- 88.
- 89. MACROECONOMICS ● Strong EconomicFactors ○ Lowest unemployment rate since 1969 (3.5%) ○ Strong US Dollar (low inflation, more international buying ability) ○ Consumer confidence at all-time high (more investment capital) ● Tax Cuts and Jobs Act (2017) ○ Corporate tax rate slashed from 35% to 21% ● COVID-19
- 90. S W OT ANALYSIS
- 91. STRENGTHS ● Sourcing ● Leadership ●Human Resources ● Digital Business Strategies ● Customizable Menu ● Strategic Alliances ● Public Relations
- 92. ● Rewards Program ●Overspending on Sales Promotions ● Dependent on limited number of suppliers ● Vague Mission Statement ● Underleveraged Data ● Traditional Organizational Structure ● Negative Brand Awareness WEAKNESSES
- 93. ● Growing relationswith sourcing ● Digital business strategies (DataBase) ● Food Delivery Methods ● Technology ● Drive-thru options OPPORTUNITIES
- 94. ● Macroeconomics ○ Coronavirus ●Increasing Minimum Wage ● Low Cost Competition ● Increasing popularity in meal-kit services THREATS
- 95. DEFINITION OF SUSTAINABLE COMPETITIVEADVANTAGE Sustainable competitive advantage is the leveraging of a company’s key strengths and assets to establish differentiation amongst competitors and to secure long term influence in its respective industry.
- 96. NEW SOURCES OF SUSTAINABLECOMPETITIVE ADVANTAGE CORPORATE CULTURE DIGITAL BUSINESS STRATEGY SOURCING (LOCAL FARMERS AND HEALTHY INGREDIENTS)
- 97.
- 98.
- 99. Chipotle University Differentiate employeesby current and future value ● Opt - In seminars and trainings at restaurants / headquarters ● Differentiate employees who opt in Qualify for 6 month Chipotle U rotation program Evaluate - Consult - Develop Eligibility for promotion to Restaurateur
- 100. Expected Outcomes ● Motivatedand inspired employees ● Increased retention rates ● Advanced training for future leaders ● Separates employees by value ● Proactive approach to training ● Consistent training philosophy Why Not Programmatic Recommendation ● Difficult roll out ● Does not insulate customer relationships ● New training program recently implemented
- 101.
- 102. Customer Relationship Management Program Utilizeinformation from Chipotle app and rewards program Increase touch points and dialogue opportunities Create customer communities Divide customers into portfolios ● Most growable ● Most Valuable ● Value Subtractors
- 103. Expected Outcomes ● Insulatedcustomer relationships through relationship marketing ● Higher customer perceived value ● Data capture with existing app ● More customizable experience Why Not Programmatic Recommendation ● Higher success probability after programmatic recommendation is implemented
- 104.
- 105. Minor Recommendations Correcting marketing/advertisingcosts Utilizing customer data within the rewards program Re-crafting the mission statement Strengthen Public Relations
- 106.
- 107.
- 108. Program Overview &Objective Club Chipotle would further Chipotle’s mission of “Food with Integrity”, as it would continue to promote Chipotle’s fresh and “real” ingredients. Through this new venture, we hope to not only bring convenience to Chipotle’s customers, but to also bring customers closer to what makes Chipotle great.
- 109. PHASES Phase 1: Farmingand Sourcing Initiative Phase 2: Revamping Digital Platform Phase 3: Introduction & Launch Phase 4: Interaction & Adjustments
- 110. Phase 1 -Farming and Sourcing Initiative Form database of all farmers/suppliers Supplier scorecard criteria and evaluation Appoint meal kit supervisor to the best performing farms Quality control of products
- 111. SCORECARD MOCK-UP COMPLETEDINCOMPLETE NOTES Food Safety Protocol Food Health History Employee Training Food Tracing System Labeling Processes Timeline of Deliveries Sustainable Technology Core Values Commitment Financial Independence Speed to the Market
- 112. Phase 2 -Revamping Digital Platform Utilizing the already established rewards program Adding more features in relation to Club Chipotle Customers input more applicable information Customers can choose from the provided meal kit menu
- 113. REWARDS PROGRAM &MENU MOCK UP
- 115. Phase 3 -Introduction & Launch ● Help from Digital Marketing department ● Social media campaign ○ Interactive media on all platforms ● Collaborations with social media influencers ● Educational content for customers ○ Videos, Interactive quizzes, etc.
- 116.
- 117. Phase 4 -Interaction & Adjustments ● Maintaining quality control ● Communicating with suppliers and farmers on their quality status ● Gaining customer feedback and making applicable changes ● “Meal Kit” Community ○ Separate web page on Chipotle’s website ○ Customers can include photos of their recipes and find information on any questions they may have
- 118.
- 119. JOIN CLUB CHIPOTLE SUBSCRIBETO GET YOUR OWN CHIPOTLE MEAL KIT NOW
- 120.
- 121. z UNITY IN LEADERSHIP DIFFERENTIATIONFROM COMPETITORS SERVICE QUALITY ENHANCEMENTS INCREASE IN CUSTOMER PERCEIVED VALUE PREMIUM PRICES PREMIUM PROFIT MARGIN STRENGTHENED BRAND IMAGE 1. 2. 3. 4. 5. 6. 7. 8. EXPECTED OUTCOMES STRENGTHENED CORPORATE CULTURE
- 122.
- 123. ● Primary Research ○Golden Questions ○ Surveys ○ Focus Groups ● Sales and Profitability ● Digital ○ Social Media - Daily Engagements and Click-Through Rate ○ Website - Impressions, Traffic Sources, Bounce Rate ○ App - Conversion Rate
- 124.
- 125. ● Future CustomerRelation Management Program ● Further leveraging Chipotle University ● Global Marketing ● Virtual Reality ● Coronavirus
- 126.
- 127. Verses that haveguided our study... Galatians 6:9 ● “Let us not become weary in doing good, for at the proper time we will reap a harvest if we do not give up.” Joshua 1:9 ● “Have I not commanded you? Be strong and courageous. Do not be afraid; do not be discouraged, for the Lord your God will be with you wherever you go.”
- 128. Would we workfor Chipotle?
- 129. Would we investin Chipotle?
- 130.
- 131.
- 132.
- 133.