Chipotle Mexican Grill Essay

1668 Words May 28th, 2013 7 Pages
John Hawer Herrera February 21, 2013 MGMT 561

Chipotle Mexican Grill, Inc.: “Food With Integrity”
I. Key Problem What Steven Ells began with a small taqueria in Denver, Colorado in 1993, one may not have foreseen this venture to become the fastest growing restaurant chain in the last decade. By 2006, Ells’ idea made its initial public offering with 535 restaurants throughout the world. Things were going tremendously well for CMG until late afternoon on October 18, 2012 when Ells finished receiving the company’s third quarter results. While data indicated an overall satisfactory outcome, it was the competition from Yum Brands’ Taco Bell and their recent launch of the Cantina Bell menu that would result in
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However, you do get what you pay for and the overall quality and taste of Chipotle still has a slightly greater edge over Taco Bell. The value someone will be willing to pay for a Taco Bell burrito will be less than the value Chipotle has created with their better quality ingredients, hence creating a greater economic value.

III. Assessment of Alternatives

How could Chipotle effectively approach their key problem which is Taco Bell’s new Cantina Bell menu? What seems to be the main concern for Chipotle is that Taco Bell is trying to provide a similar product for half the price. Some of the alternatives available to Chipotle to are: • Buy low cost goods to reduce prices using Concentrated Animal Feeding Operations (CAFOs) • Another option could be to offer a smaller burrito for a smaller price, or to include less amounts of meat as Taco Bell does • Continue doing what they do best and differentiate themselves

Should Chipotle buy low cost goods to reduce prices using Concentrated Animal Feeding Operations (CAFOs), it would allow them to offer menu items at a lower cost to the consumer providing greater competition between them and Taco Bell’s Cantina Bell menu. However, in doing so would contradict their philosophy of providing the best quality ingredients in their food. In doing so, it will change CMG’s strategy from being a premium product and higher price to a cost leadership strategy and at the same time reducing the value of

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