Chipotle Managerial Accounting Essay

3884 Words Apr 8th, 2014 16 Pages
Fascinated by the simple cost-effective business models he observed at small burrito shops in San Francisco, Steve Ells founded the first Chipotle Mexican Grill in 1993 near the University of Denver. By putting his own spin on the traditional casual dinning approach, Chipotle is now an enormously successful publicly traded company with over 1,000 locations in 38 states.

Although Steve was first drawn to the business model by its limited cost structure, he aspired to run his business in a sustainable manner. The company uses management accounting to ensure their high standard operating decisions will also provide the company with enough profit to remain competitive and continue to grow.

Customer Value Proposition

Differentiating
…show more content…
The Balanced Scorecard Approach

The Balanced Scorecard is a strategic planning and management tool used by businesses to align the vision of the organization with SMART (Specific, Measurable, Achievable, Realistic, and Timely) objectives in order to realize it. We’ve created a scorecard specifically for Chipotle broken down into four sections: Customer Perspective, Internal Business Operations, Financial Perspective, and Growth and Learning.

Measurement #1
Measurement Name: Percentage Customer Retention
BSC perspective that measurement is included in: Internal Perspective
Measurement that is relevant to the firm’s strategy to: Menu Leadership – continued devotion to making quality food, first to market new health trends.
Is this viewed as a leading (driver) or lagging (outcome) measure? Lagging
Explain the logic underlying the measure. The goal for the “Food With Integrity” program is to attract a loyal customer base and maintain its relationship with suppliers. This requires an understanding of customers’ wants and needs in the “fast-casual” food industry. If Chipotle is successful in targeting consistent customers, sales and brand allegiance will increase.
Data source – How would the firm collect this measurement information? Accounting information system that will monitor customer activity and supplier history.
How often would the measurement

Related Documents