2. MEET STEVE ELLS
Founder, Co-CEO
Graduate of Culinary
Institute of America
(New York)
Chipotle Visionary
$80,000 loan
$85,000 in investments
3. 1993: First Chipotle in Boulder, Colorado
1998: McDonald’s purchases first minority stake in
Chipotle
1999: Chipotle expands to 37 locations
2000: Venture into organic and sustainable
ingredients
2008: International expansion into Canada
2010: Chipotle goes to London
6. 2000
• Started
serving
naturally
raised pork.
• 2010: 100%
of pork is
naturally
raised
2002
• Started serving
naturally raised
chicken.
• 100% of chicken
comes from
farms that meet
Chipotle’s high
standards.
2007
• Over 60% of
Chipotle’s
beef is
naturally
raised
• Now, 100%
of the beef
is naturally
raised
2007
• Chipotle
stops usage
of cheese
or sour
cream with
rBGH
2010
• As of 2010,
40% of the
black beans
are certified
organic
7. Nontraditional marketing is key to Chipotle’s business
model. They focus on creating positive Word-of-Mouth
as opposed to spending money on advertising
When a new store opens, they give their neighbors free
food to create customer loyalty
Professional athletes are given vouchers for a free
burrito each day which leads to social media publicity
Only 2% of revenue is spent on advertising
8. Manager Incentives
Consistency is the ultimate goal
Managers are offered large bonuses to
stay in store
Promoting from within allows greater
success
Inspires employees and creates
dedication
9. BUSINESS STRATEGY
“I remain confident
that our
performance is
rooted in our long-
term vision to
change the way
people think about
and eat fast
food…This focused
approach makes us
unique in the
restaurant industry,
and continues to
differentiate Chipotle
in significant ways.”
~Steve Ells,
Founder of Chipotle
10. FAST-CASUAL
Among the most successful restaurants in the up and
coming niche fast- casual industry
Fast-casual dining offers
Higher average tickets
More upscale fare
Better decor and atmosphere compared to fast food restaurants
No drive through in fast casual restaurants
Able to offer high-quality food ingredients that are created
faster and less expensive than full-service restaurants
11. ORGANIC AND SUSTAINABLE
Use of organic and sustainable ingredients
All farmers are approved and must have quality
specifications
Prefer farms that are family owned and operated
Chipotle is the largest restaurant buyer of locally
grown produce
All restaurants are sustainable in the
environment
12. THE CHIPOTLE ADVANTAGE
Exceptional service
from hard working
managers and
employees
Managers are offered
big bonuses for
running a productive
business so
managers work hard
to please the
customer
13. STRENGTHS
• Sustainable supply chain
• No steroids or growth hormones
• First-mover (fast-casual)
WEAKNESSES
• Single corporate office
• Relationship with suppliers
• Unhealthy menu items
OPPORTUNITIES
• Healthier options menu
• International and domestic expansion
THREATS
• Lack of franchising
• Threat of new entrants into “fast-
casual” market
Chipotle
14. STRENGTHS
Sustainable supply chain
Able to leverage supply chain management
capabilities from McDonald’s
No steroids or growth hormones
Customers willing to pay premium price
First-mover (fast-casual)
Customers seek something “hipper, faster, and
cheaper than full-service”
15. WEAKNESSES
Single corporate office
Organizational and cultural challenges
Relationship with suppliers
Supplier shortages
Difficult to find substitutes (interruptions in supply chain)
Unhealthy food items
Average burrito: 900-1,000 calories, 50 grams of fat, and 2,030
mg of sodium
Qdoba offers healthier and less filling options
Mexican lettuce wraps
16. OPPORTUNITIES
Healthier options menu
International and domestic expansion
Continue cautious approach to foreign
expansion
Explore franchising to reap the benefits
Reduction in overhead costs
17. THREATS
Lack of franchising
Competitors moving quickly to expand
internationally and domestically
Threat of new entrants
Sourcing and offering quality ingredients is a
relatively simple business model to mimic
EG. Fast food chains
New concepts
19. Chipotle’s marketing
strategy is to replace
traditional advertising with
emotionally engaging
stories.
Example: Back to the Start
The 2-minute animated film
symbolizes Chipotle’s shift
away from factory farms and
its increasing commitment
to naturally-raised animals
and locally grown produce
Organic Sustainable
Local
20. The short film generated a lot of publicity and positive
feedback.
Chipotle should continue with this strategic, selective use of
television advertising and capitalize on the success of the
first film.
Using consistent animation and use of imagery, Chipotle
should continue advertising with emotionally-evoking short
films during popular prime time events, such as the Super
Bowl or the Academy Awards.
Each film could highlight a different aspect of sustainable
agriculture or feature different naturally-raised animals.
21.
22. Chipotle should invest more resources in
the Chipotle Student Brand Manager
Program
Before each new location is opened, a brand
manager should already be promoting Chipotle at
local campuses, schools, and community centers
Brand managers should be used to both increase
Chipotle’s social media presence and educate
consumers about sustainable farming
23. IMPROVING SOCIAL MEDIA PRESENCE
Brand managers should receive incentives for
the number of people in their network that
begin following them on social media sites.
Brand managers should utilize technology to
allow people to like social media pages on the
spot and be rewarded with coupons and
promotional deals.
24. EDUCATING PEOPLE ON SUSTAINABLE FARMING
All coupons and promotional materials should also be
informative about Chipotle’s commitment to sustainable
agriculture and their dedication to naturally-raised animals
and locally-grown produce.
27. INTRODUCING THE SMALL(ER) BURRITO
Chipotle could introduce a smaller burrito to allow
customers to experience the same great taste, but in smaller
portions.
Through social media, Chipotle should actively endorse this
smaller burrito which will be available with white or wheat
tortillas.
This new option will target consumers who are seeking
healthier options.
With an $85,000 loan from his father and the realtor's help, Ells found and renovated an old ice cream parlor near the University of Denver.Post-culinary school, Ells moved to San Francisco to work under the tutelage of celebrity chef Jeremiah Tower. While living in the city, Ells was inspired by watching an assembly line of workers at a local taqueria, efficiently feeding hungry masses of patrons.
venture
“I remain confident that our performance is rooted in our long-term vision to change the way people think about and eat fast food…This focused approach makes us unique in the restaurant industry, and continues to differentiate Chipotle in significant ways.” -Steve Ells, Creator of Chipotle
Continue cautious approach to international expansion
Chipotle offers a sleek, modern “eclectic design”
Issues with management and effective communicationLesser ability to understand local and cultural differences
With a combination of company owned and franchised restaurants, Panera is able to rely primarily on cash generated from operations to fund new company owned locations while maximizing expansion through new franchises.