Group 1-Chipotle Strategic Plan

RUNNING HEAD: CHIPOTLE STRATEGIC PLAN

Chipotle Strategic Plan Edin Na!h  Ho!ianna "at#$ara Ale% Edeig$a > '() *1 E + ,ALL (*1' Te%a! Te%a! A-& Uni.er!it/ Co00erce

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CHIPOTLE STRATEGIC PLAN

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Table Table of Contents

Introd#ction 2 Core 3al#e! 4 Operating G#ideline! ' S5OT Anal/!i! 6 3i!ion and &i!!ion 1* "road and Speci7ic Goal! 11 Strategie! 11 Critical S#cce!! ,actor! 14 Di!tincti.e Co0petencie! 18 &ea!#re0ent! 19 C#rrent I!!#e! 16 Reco00endation (1 Concl#!ion (( Re7erence! (4 Appendice! (8

CHIPOTLE STRATEGIC PLAN

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Introduction

Chipotle &e%ican Grill i! a chain o7 re!ta#rant! operating in the Ca!#al Dining Seg0ent that !pecialie! in !er.ing &e%ican coo;er/ A! at the end o7 ! o$ecti.e i! to o77er it! c#!to0er!> a !ati!7actor/ dining e%perience in #ic; ti0e= hile pro.iding #alit/ 7ood and a0$iance itho#t ha.ing the c#!to0er ait too long Chipotle co0pete! ith other re!ta#rant! in the 7a!t ca!#al dining !ector that incl#de! Apple$eeF!= do$a= Taco "ell!= ChiliF!= a0ong!t other! It al!o contend! ith other 7a!t 7ood re!ta#rant! !#ch a! "#rger @ing= &cDonaldF!= @,C and S#$a/

CHIPOTLE STRATEGIC PLAN

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Core Value

Chipotle>! .al#e! i! 7oc#!ed on using high-quality ingredients and cooking techniques to make good food accessible to all customers at affordable prices=B $#t thi! ha! gron o.er the

/ear! !ince  fresh is not enough anymore=B Chipotle= (*14J &oreo.er= Chipotle endea.or! to recognie here all o7 it! ingredient! originate! 7ro0 in an e77ort to endor!e local 7ar0er! and !#!taina$l/?gron and nat#rall/?rai!ed prod#ct!= hich goe! along ith their ,ood 5ith Integrit/B 0i!!ion !tate0ent hich i! a! 7ollo!: •

Ser.ing the $e!t and !#!taina$l/ rai!ed 7ood that appeal! to the e/e and ta!te $#d! ith

•

health/ n#trition and great .al#e S#!taining and !#pporting local 7ar0er! ho re!pect and care 7or their pro7e!!ion and the

•

ani0al! U!ing ani0al 0eat that are $red and 7ed itho#t #!ing anti$iotic! or hor0one! hene.er  po!!i$le

,#rther0ore= it! core .al#e! incl#de!: • • •

•

Hone!t/ and integrit/ Concern and pa!!ionate 7or their con!#0er! Open to .ie! and opinion! 7ro0 it! c#!to0er! and are dedicated to 0a;ing their  $#!ine!! $etter  Ala/! illing to ta;e ri!; and 7ace challenge! and are a$le to or; and !ee thro#gh the challenge!

Operating Guidelines Culture of Top Performers

CHIPOTLE STRATEGIC PLAN

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Chipotle i! 7oc#!ed on people>! c#lt#re ith e0pha!ie on identi7/ing= hiring= and e0poering top per7or0ing e0plo/ee! The/ are co00itted to creating a c#lt#re o7 high  per7or0ance that lead! to the $e!t re!ta#rant e%perience 7or the e0plo/ee! and c#!to0er! Thi!  principle i! $a!ed on hiring the $e!t people 7or the re!ta#rant! It al!o 0a;e! the e77ort o7 hiring e0plo/ee! that ha.e pa!!ion 7or 7ood and ho ill operate their re!ta#rant con!i!tentl/ ith high !tandard! ,#rther0ore= Chipotle al!o pro.ide! greater career opport#nitie! 7or e0plo/ee! ho or;  hardK pro.ide! great c#!to0er !er.iceK and ha.e the a$ilit/ to lead and e0poer other! It al!o  pro.ide! training to de.elop potential o7 the e0plo/ee! The/ are co00itted to de.eloping their e0plo/ee!= $/ pro0oting e%ceptional indi.id#al! internall/  Nonethele!!= the/ ha.e le.eraged their o#t!tanding re!ta#rate#r!> leader!hip $/ gi.ing the0 re!pon!i$ilit/ 7or 0entoring one or 0ore clo!e re!ta#rant! There7ore= it ill pro.ide the opport#nit/ 7or the0 to de.elop the leader!hip !;ill! in the re!ta#rant Re!ta#rate#r! ho ha.e !hon their !;ill! ill create a high !tandard! c#lt#re and con !tant i0pro.e0ent and e0poer0ent can $e pro0oted to $eco0e the tea0 leader! Importance of Methods and Culture Altho#gh Chipotle ha! 0an/ re!ta#rant!= the/ con!ider that their ithdraal 7ro0 the

 progra00ed coo;ing techni#e! and 0icroa.e! #!ed $/ 0an/ traditional 7a!t?7ood and 7a!t? ca!#al re!ta#rant! $ene7it! !et the0 apart The/ #!e cla!!ic coo;ing 0ethod! !#ch a! 0arinating and grilling 0eat!= hand?c#tting prod#ce and her$!= 0a;ing 7re!h !al!a and g#aca0ole= and coo;ing rice in !0all $atche! thro#gho#t the da/ ,#rther0ore= the/ or; in ;itchen! that are al0o!t !i0ilar to tho!e o7 high?end re!ta#rant!= than the t/pical 7a!t?7ood place De!pite their la$or?inten!i.e 0ethod o7 7ood preparation= the/ al!o 7oc#!ed on 0en# that create! e77iciencie!

CHIPOTLE STRATEGIC PLAN

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that allo the0 to !er.e high #alit/ 7ood= 0ade 7ro0 ingredient! t/picall/ 7o#nd in 7ine dining re!ta#rant! In addition= the 7ir0 !tri.e! to 0a;e their or; en.iron0ent= attract! !;illed and talented or;er! Thi! incl#de! en!#ring that e0plo/ee! act re!pon!i$l/= hile the/ are $eing e0poered to 0a;e their on deci!ion! 7or their con!#0er! The/ are al!o ta#ght to treat their c#!to0er! ith re!pect The/ al!o en!#re that the or; place enco#rage! people 7ro0 all $ac;gro#nd!= are a$le to or;= !#cceed and realie their 7#ll potential The Front Line is Key Chipotle ha! de!igned their re!ta#rant and ;itchen intentionall/ to place their e0plo/ee

#p 7ront ith c#!to0er! to rein7orce their 7oc#! on !er.ice Li;ei!e= their ope n ;itchen al!o allo! con!#0er to !ee that the/ are act#all/ preparing 7re!h 7ood e.er/ da/ All o7 their re!ta#rant e0plo/ee! are enco#rage to interact ith con!#0er hen the/ are preparing the 7ood Chipotle i! al!o 7oc#!ed on attracting and retaining people ho can deli.er their good e%perience pro0i!e to e.er/ c#!to0er Thi! ha! $een po!!i$le !o 7ar= $eca#!e it pro.ide! each c#!to0er ith indi.id#alied attention that e.ent#all/ create! an a. en#e to re!pond to c#!to0er !#gge!tion! in ho!pita$le and per!onalied 0anner There7ore= the/ $elie.e that their 7oc#! i! to create a po!iti.e and interacti.e e%perience to $#ild lo/alt/ and enth#!ia!0 7or the $rand a0ong the !ta;eholder! estaurant Team E.er/ Chipotle re!ta#rant ha! a general 0anager= an apprentice 0anager= !er.ice 0anager!= ;itchen 0anager!= and (4 7#ll and part ti0e cre 0e0$er! The/ #!#all/ ha.e to !hi7t! at the re!ta#rant that 0a;e the !ched#le !/!te0 !i0ple a! ell a! !ta$ile Al!o= the/ tend to ha.e 0ore e0plo/ee! in $#!/ re!ta#rant! Training i! al!o one i0portant part o7 the !/!te0 hence the e0plo/ee! can or; in a .ariet/ o7 !tation! there7ore 0a;ing the o#tlet 0ore e77icient d#ring the $#!/ ti0e!

CHIPOTLE STRATEGIC PLAN

)

"/ e0pha!iing on the c#!to0er !er.ice !ector= Chipotle enco#rage! it! General &anager! and e0plo/ee! to elco0e and interact ith c#!to0er! d#ring the da/ Additionall/= the/ al!o ha.e a 7ield !#pport !/!te0 that co0pri!e! o7 apprentice tea0 leader!= area 0anager!= tea0 director!= e%ec#ti.e tea0 director= and re!ta#rant !#pport o77icer! is! Management

Chipotle ha! $een !trong in 0anaging it! ri!; e77ecti.el/ It achie.e! thi! $/ ;eeping it! c#!to0er! !ati!7ied= earning high ret#rn! on in.e!t0ent!= and gi.ing $ac; !ta$le ret#rn! 7or it! !hareholder! Chipotle ha! $een con!i!tent and !ta$le in 0anaging ri!; and e.er/ or;er i! held re!pon!i$le Managing "fficiency

Chipotle i! 7oc#!ed 0ore on their 7ood and $#!ine!! hich 0atter 0o!t to their con!#0er! The/ red#ce their e%pen!e! in acti.itie! that don>t contri$#te to the re.en# e o7 the 7ir0 and in!tead in.e!t in groth opport#nitie! li;e e%pan!ion into international 0ar;et! a nd opening #p 0ore !tore! Corporate Go#ernance

Chipotle i! con!tantl/ !ee;ing a/! o7 $alancing the intere!t! o7 the 0an/ !ta;eholder! o7  the co0pan/ ? the!e incl#de it! !hareholder!= 0anage0ent= c#!to0er!= !#pplier!= 7inancier!= go.ern0ent and the co00#nit/ The $oard! o7 director! are elected $/ !hareholder! and the/ are !addled ith the #lti0ate re!pon!i$ilit/ o7 deci!ion 0a;ing The head o7 the 0anage0ent tea0= hich i! the CEO= i! in charge o7 the o.erall re!pon!i$ilit/ in 0anaging and 0a;ing the $#!ine!!  pro7ita$le The 0ain 7oc#! 7#nction o7 the $oard o7 director! i! to o.er!ee or ha.e o.er!ight hich 0ean! to de7ine and en7orce acco#nta$ilit/ !tandard! that ill act a! a g#ide and help the !enior 0anage0ent to 7#ll/ e%ec#te the re!pon!i$ilitie! the/ ha.e 7or the intere!t o7 it!

CHIPOTLE STRATEGIC PLAN

9

!hareholder! Apart 7ro0 that the 7olloing are the 0ain re!pon!i$ilitie! o7 the $oard o7 director!: •

E.al#ating the per7or0ance o7 the !enior 0anage0ent tea0 and the 7ir0 $/ o.er!eeing the 7ir0! cond#ct o7 $#!ine!! and e.al#ate it to !ee i7 it>! $eing e77ecti.el/ and e77icientl/ 0anaged The/ do it thro#gh 0eeting! that are held ith the o#t!ide

•

director! ith the a$!ence o7 the 0anage0ent Another proce!! i! !electing= e.al#ating and planning reg#larl/ 7or the !#cce!! o7 the CEO and 0e0$er! o7 the !enior 0anage0ent a! the $oard o7 director! con!ider

• • •

appropriate li;e 7i%ing the co0pen!ation Re.ieing the 7ir0>! !trategic o$ecti.e! and plan! Ad.i!ing and co#n!eling to the CEO and the top 0anage0ent A!!i!ting top 0anage0ent in the o.er!ight o7 co0pliance $/ the 7ir0 ith applica$le

•

la! and reg#lation!= incl#ding the p#$lic reporting o$ligation! o 7 the 7ir0 E!ta$li!hing the a0o#nt o7 co0pen!ation 7or the top 0anage0ent 0e0$er! O.er!eeing 0anage0ent ith a goal o7 en!#ring that the 7ir0>! a!!et! are !a7eg#arded

•

thro#gh the 0aintenance o7 appropriate acco#nting= 7inancial and other control!  Ann#all/ e.al#ating the o.erall e77ecti.ene!! o7 the "oard and al!o !electing and

•

reco00ending to !hareholder! 7or election an appropriate !late o7 candidate! 7or the "oard

$%OT &nalysis $trengths • • • • • • •

O77er! health/ and #alit/ 7ood "rand recognition  No 7ranchi!ing= all re!ta#rant! are oned $/ the co0pan/ Glo$aliation S#pplier relation!hip! Ad.erti!ing co!t! 0ini0al ,inancial $ac;gro#nd i! !trong ith high a!!et!

CHIPOTLE STRATEGIC PLAN •

6

Located in hea./ tra77ic area!= #r$an area! and $ig citie! Co0pen!ation and !alar/ i! higher than a.erage age! to e0plo/ee! and 0anage0ent incenti.e! Online order and deli.er/ in certain area!

%ea!nesses • • • • •

E%pen!i.e 0en# Li0ited option! 7or 7ood Li0ited 0ar;eting= #!e! ord o7 0o#th Location i! li0ited Local 7ar0! are not a.aila$le in pro%i0it/

Opportunities • • • • •

Enter and capt#re international 0ar;et! E%pand 0en# choice! Increa!e in the n#0$er o7 health con!cience con!#0er! Open 0ore re!ta#rant! Tran!parenc/ and pro%i0it/ in getting nat#ral 7ood !o#rce!

Threats • • • • • •

Co0petition 7ro0 do$a= &oe>! So#the!t Grill and Panera "read  Taco "ell adding nat#ral prod#ct! and tr/ing to $e health/ E%pen!i.e pricing Slo groth in econo0/ Ea!e o7 entr/ into the nat#ral 0ar;et! S#ppl/ re!traint! o7 nat#rall/ rai!ed 0eat!

Vision and Mission

A! !tated in their Chipotle (*14 Ann#al State0ent= their .i!ion i! to change the a/  people thin; a$o#t and eat 7a!t 7ood There7ore it>! i0portant 7or the $#!ine!! to !ho that 7ood hich !er.ed 7a!t doe! not 0ean that it ha! to $e  fast-food B  The co0pan/ act#all/ acco0pli!hed thi! $/ #!ing high?#alit/ ra ingredient!= cla!!ic coo;ing techni#e!= di!tincti.e interior de!ign to create an incredi$le eating e%perience at rational price!= and 7riendl/ people to

CHIPOTLE STRATEGIC PLAN

1*

ta;e care o7 each c#!to0er chipotleco0J The/ al!o a.oid a !tandard approach= hen creating the re!ta#rant e%perience Hence the de!ign i! done to 0a;e it loo; 0ore li;e a 7ine? dining re!ta#rant ,#rther0ore= to acco0pli!h the .i!ion and 0i!!ion= Chipotle ha! $een tr/ing to i0ple0ent a  food culture” and a “people culture hich o#ld allo the co0pan/ to create a ne 7a!t 7ood 0odel and #nit econo0ic! that ill pro.ide o#t!tanding ret#rn! to the !ta;eholder! &oreo.er= the 0i!!ion o7 the co0pan/ i!  Food with IntegrityB= hich 0ean! that Chipotle i! loo;ing 7or $etter #alit/ o7 7ood $/ #tiliing ingredient! hich are not onl/ 7re!h=  $#t are al!o !#!taina$l/ de.eloped and re!pon!i$l/ rai!ed ith re!pect 7or the ani0al!= the land= and the 7ar0er! ho prod#ce the 7ood 'road and $pecific Goals

To achie.e it! .i!ion and 0i!!ion= Chipotle ha! !o0e !trategic goal! hich are related to ,ood ith Integrit/ philo!oph/ Hoe.er= ,ood ith Integrit/ de7ine! on ho the $#!ine!! i! co00itted to:

•

So#rcing the .er/ $e!t ingredient! that can 7o#nd and prepared $/ hand S#pporting and !#!taining 7a0il/ 7ar0er! ho re!pect the land and the ani0al! in

•

their care U!ing 0eat 7ro0 ani0al! rai!ed itho#t the #!e o7 anti$iotic! or added hor0one!=

•

hene.er po!!i$le Chipotle= (*14J The/ are act#all/ co00itted $eca#!e the/ #nder!tand the connection $eteen ho 7ood i! rai!ed and prepared a! ell a! ho it !ho#ld ta!te Thi! ta;e! e0plo/ee! that are dedicated to the high !tandard! o7 the organiation Chipotle rai!e! a c#lt#re o7 #pper0o!t per7or0er! that

CHIPOTLE STRATEGIC PLAN

11

ha.e $een re7ined 7ro0 ithin to !#!tain groth The!e characteri!tic! de7ine! Chipotle and !et the0 apart 7ro0 other re!ta#rant! $trategies 'usiness Le#el $trategy %ho: C#!to0er! ho ant a 7a!t?ca!#al dining e%perience at rea!ona$le and co0petiti.e

 price! It doe! not target a de7inite de0ographic $#t pro.ide! to indi.id#al! ho de!ire ti0el/ !er.ice and great?ta!ting 7ood prod#ced 7ro0 all?nat#ral ingredient! %hat: The Co0pan/ cater! to the e.er?groing= health?con!cio#! co00#nit/ that cra.e!

all?nat#ral and locall/ rai!ed ingredient! in their 0eal! Chipotle al!o pro.ide! an e%pedited dining e%perience hile pro.iding higher #alit/ option! than the t/pical 7a!t?7ood re!ta#rant %hy: There e%i!ted a .oid in the 7a!t?ca!#al dining !pace that Chipotle loo;ed to 7ill in a

#ni#e 0anner The !trateg/ o7 creating a h/$rid $eteen 7a!t?7ood and dine?in option= and thi! ha! attracted a larger con!#0er $a!e and cater! to the hectic !ched#le! o7 0o!t indi.id#al! in toda/F! !ociet/ Additionall/= the a$!ence o7 healthier= e%pedited dining option! pre!ented an #nparalleled opport#nit/ 7or Chipotle to ta;e ad.antage o7 (o): Chipotle pro.ide! great?ta!ting 7ood at co0petiti.e price! hile catering to

con!#0erF! de!ire 7or all?nat#ral ingredient! The c#!to0iation option! at the re!ta#rant al!o allo c#!to0er! to create a 0eal #ni#e to their ta!te! and pre7erence!= hile alloing Chipotle to de0on!trate it! .er!atilit/ and c#!to0er?dri.en 0i!!ion Al!o $/ #!ing a Di77erentiation Strateg/ o7 pro.iding pre0i#0 priced organic ingredient!= ha! placed Chipotle in the co0petition ith other 7a!t ca!#al co0petitor! &oreo.er= it! prod#ct! are co0petiti.el/ priced and the/ !tri.e ith other 7a!t 7ood co0petitor! !#ch a!

CHIPOTLE STRATEGIC PLAN

1(

do$a and Panera "read and di77erent to co0pete again!t co!t leader! !#ch a! &cDonald>! and Taco "ell Appendi% AJ Chipotle can $e con!idered a! a co0pan/ that #!e! it! di77erentiation !trateg/ to act#alie the 7olloing: • • •

,oc#! on high?#alit/ prod#ct ith rapid !er.ice E0pha!ie! on po!itioning a! a 0ean! o7 di77erentiation U!e! it! co0petiti.e ad.antage to 7#el groth

Chipotle $elie.e! that e.en tho#gh the co!t o7 #!ing organic ingredient! i! higher= c#!to0er! are illing to pa/ e%tra 7or healthier 7ood Chipotle>! ,ood ith integrit/B 0i!!ion  po!ition! it!el7 a! a pro.ider o7 higher #alit/ 7ood $/ #!ing 7re!h= go#r0et and increa!ing organic ingredient! !#cce!!7#ll/ di77erentiate! their prod#ct! 7ro0 co0petitor! and 0eet! the con!#0er de0and 7or healthier 7ood &oreo.er= to control their #alit/ 7or the 7ood and !er.ice= Chipotle on! a nd control! their entire re!ta#rant! Tho#gh thi! i! con!idered co!tl/= it hoe.er allo! the0 to en!#re the high #alitie! o7 the prod#ct! ,#rther0ore= Chipotle al!o i0ple0ented a .ertical co0ple0entar/ alliance ith it! !#pplier! Since the/ act#all/ depend on their clo!e relation!hip to o$tain 7re!h ingredient! Corporate Le#el $trategies

Chipotle i! a !olitar/ $#!ine!! !#cceeding thro#gh 0ar;et de.elop0ent and penetration !trateg/ It ha! a .er/ lo le.el o7 di.er!i7ication= $eca#!e 6' o7 it! re.en#e! i! 0o!tl/ generated thro#gh Chipotle &e%ican Grill= ith in.e!t0ent in ShopHo#!e A!ian @itchen and Pieria Locale contri$#ting the re!t "oth ne re!ta#rant! are !till /o#ng and ha.e not contri$#ted o0ino#!l/ to Chipotle>! re.en#e! In tr/ing to e%pand the Chipotle &e%ican Grill

CHIPOTLE STRATEGIC PLAN

12

internationall/ and do0e!ticall/= the co0pan/ co#ld al!o increa!e it! di.er!i7ication $/ capitaliing in it! other $#!ine!!e! or inten!i7/ing it! concept and philo!oph/ to other c#i!ine! Mar!eting $trategy

,or it! pro0otional !trateg/= Chipotle ha! or;ed ith a !0all $#dget and rarel/ ad.erti!e on tele.i!ion= $#t or;! on it! on in?ho#!e Scho#lt= (*14J The/ do the!e !trategie! to in o.er 0illennial $/ !olidi7/ing their rep#tation 7or 7re!hne!! and healthier 7are than it! co0petitor &oreo.er= Chipotle al!o o$tained rep#tation $/ !h/ing aa/ 7ro0 traditional 0edia  $eca#!e /o#nger a#dience! 7eel li;e it>! le!! a#thentic and le!! ea!/ to connect ith International strategy

Chipotle ha! $een i0ple0enting a glo$al !trateg/ hich i! centralied in the United State! C#rrentl/= the/ ha.e 0anaged !e.eral re!ta#rant! located o#t!ide US hich are in Canada= United @ingdo0= Ger0an/= and ,rance Hoe.er= the/ o77er prod#ct! that are !tandardied acro!! 0ar;et! ith di77erence! in the 7ood .ariet/ 7or di77erent 0ar;et Al!o= the/ !hare their re!o#rce! acro!! the !tate $order! Hoe.er= e.en tho#gh the 7ood i! prepared in the ;itchen= !o0e o7 their ingredient! are 0ade in the central ;itchen ,or the international 0ar;et= the/ act#all/ e!ta$li!hed the n e oned !#$!idiarie! e.en tho#gh thi! thing i! co!tl/ Thi! thing i! part o7 their !trateg/ $eca#!e the/ ant to en!#re their high #alit/ o7 the prod#ct! hich di77erentiate their $rand Critical success factor

The re!ta#rant $#!ine!! i! highl/ co0petiti.e and o.ercroded ith co0panie! tr/ing to co0pete 7or con!#0er! Chipotle operate! in the 7a!t ca!#al !eg0ent o7 the ind#!tr/ that co0$ine! $oth !peed! o7 7a!t 7ood and higher?#alit/ prod#ct! In the thi! !eg0ent o7 the 0ar;et=

CHIPOTLE STRATEGIC PLAN

14

Chipotle co0pete! again!t other 7a!t 7ood re!ta#rant! !#ch a! ! 0i!!ion hich i! $a!ed on pro.iding 7ood ith integrit/B ha! $een a con!i!tent the0e thro#gho#t the hi!tor/ o7 it! rapid groth To 7#l7ill thi! 0i!!ion= Chipotle !o#rce! 7or 7ood ingredient! in !#ch a a/ that i! 7riendl/ to 7ar0er!= ani0al! and the en.iron0ent Thi! ha! gone ell ith c#!to0er!= a! thi! 0o.e ha.e !hon their !#pport 7or local 7ar0er!K re!pect and protection o7 ani0al right!K and re!pect 7or the en.iron0ent Secondl/= the co0pan/>! 7oc#! on pro.iding 7re!h and nat#rall/ rai!ed ingredient! align! ell ith the health/ eating trend #nder a/ acro!! the United State! ,inall/= the #alit/ o7 it! ingredient! re7lect! on the 7ood= a! the/ ta!te 7re!her and appetiing than an/ 7o#nd at a co0petitor!> re!ta#rant! Thi! ha! led to noticea$le con!#0er tra77ic= hich !ho! that the co0pan/>! earning! thro#gh the !a0e !tore !aleB increa!ed $/ 8( R#et!chlin= (*14J Thi! 7ig#re i! higher than hat a! reported $/ other co0petitor! ithin the !a0e period *isciplined Gro)th

Chipotle ith o.er 1=)** location! ha! contin#ed to $e a !#cce!!7#l $#!ine!! .ent#re d#e to the re0ar;a$le and !#!taina$le groth it ha! e%perienced o.erti0e Thi! contin#o#! groth can $e lin;ed ith the co0pan/>! ca#tio#! and ell?ordered approach to groing the $rand The di!cipline ha! $een e!ta$li!hed $/ the co0pan/>! #n!poiled and de$t?7ree 7inancial condition= hich ha! alloed it to re0ain a !olid in.e!t0ent The 7act that the co0pan/ ca!h 7lo allo! it to increa!e it! !tore total $/ 0ore than 1* in (*12 i! re0ar;a$le Larence= (*12J The co0pan/ adopted a groth !trateg/= that alloed it to on and retain control o.er all it! re!ta#rant location! ha! accelerated groth Tho#gh a 7ranchi!e 0odel can 7a!t?trac; groth

CHIPOTLE STRATEGIC PLAN

1'

and allo it to $e pro7ita$le @a#70ann= P ! dedication to each !trateg/ i! !i0pl/ #n0atched $/ it! co0petitor!= there$/ creating a .er/ co00anding co0petiti.e ad.antage Thi! ad.antage !o 7ar ha! dri.en Chipotle to ne height!= and the  po!!i$ilit/ that !#ch a groth ill $e tro#$led i! !een a! a drea0 &d#ertising and Mar!eting Campaigns

The co0pan/>! choice o7 #!ing ingredient! 7ro0 !#!taina$le !o#rce! in it! 0en# ha! $een a great !o#rce o7 !#cce!! The co0pan/ i! al!o aggre!!i.el/ di!!e0inating the 0e!!age thro#gh ad.erti!ing and 0ar;eting ca0paign! "elch= - "elch= (**2J= hich ha! con!tantl/ led c#!to0er! into it! door! The co0pan/ i! !#cceeding $/ r#nning ad! and pro0otion! ca0paign! that connect ith the co0pan/>! philanthropic e77ort! ,or e%a0ple= it e!ta$li!hed the Chipotle

CHIPOTLE STRATEGIC PLAN

18

C#lti.ate ,o#ndation that ai0! to gro 7ood that doe!n>t e%ploit the 7ar0er!= the ani0al! and en.iron0ent *istincti#e Competencies $upply Chain

The co0pan/ ha! $een a$le to $#ild a reg#lar !#ppl/ o7 ingredient! to the o.er 1)** o#tlet! in the United State Thi! i! $eca#!eK it ha! $een a$le to $#ild a .er/ clo!e relation!hip ith 7ar0er! C#rrentl/= the co0pan/ or;! ith (2 independentl/ oned and operated a regional di!tri$#tor that or;! ith !#pplier! that ha.e $een care7#ll/ !elected To $eco0e a 0e0$er o7 thi! !/!te0= the !#pplier 0#!t !ho #nder!tanding o7 Chipotle>! 0i!!ion= hile !ee;ing to de.elop a co00onl/ 7a.ora$le long ter0 relation!hip Chipotle &e%ican Grill= (*14J The #nion $eteen chipotle and it! !#pplier! ha! red#ced the #ncertaint/ in price! o7 ingredient!= and po!!i$l/ red#cing !#ppl/ !hortage! Chipotle ha! al!o e%perienced a con!idera$le groth o.er the pa!t 7i.e /ear! Thi! ha!  $een 0oti.ated $/ groing re.en#e in e%i!ting re!ta#rant! and the opening o7 ne re!ta#rant! in the United State! and !o0e a$road Thi! ha! gi.en the co0pan/ an edge o.er it! co0petitor!= and the co0pan/ intend! to carr/ on thi! trend in the 7#t#re *istincti#e Mission .Food )ith Integrity/

Chipotle core 0i!!ion o7 ,ood ith Integrit/B goe! 7#rther than o77ering it! c#!to0er! high #alit/ ingredient! The co0pan/>! 7oc#!ed 0en# al!o allo! the 7ir0 to ca#tio#!l/ e%a0ine the origin o7 each o7 it! ingredient!= hile !electing the $e!t !#pplier! 7or it and c#!to0er! Thi! contain! none geneticall/ rai!ed 0eat= nat#rall/ gron 7ar0 prod#ce= and dair/  prod#ce 7ro0 co! that are e%po!ed to green pa!t#re!

CHIPOTLE STRATEGIC PLAN

1)

Tho#gh the co0pan/ ha! 7aced challenge! in the pa!t= hile p#r!#ing it! ,ood ith Integrit/ initiati.e It ha! hoe.er i0pro.ed= and it i! .er/ ;een on pro.iding it! c#!to0er! ith high #alit/ ingredient! that are rai!ed or gron re!pon!i$l/ Culture of Top Performer

In order to enhance it! c#!to0er!> e%perience= Chipotle hire! the $e!t e0plo/ee! 7or all  po!ition! ithin the co0pan/ Thi! !trateg/ ha! alloed the co0pan/ to attract and retain #alit/ e0plo/ee! and potential!= $/ o77ering an attracti.e and long ter0ed career opport#nit/ The o#tco0e ha! $een i0pre!!i.e= a! 6) o7 !alaried 0anager!= and o.er 69 o7 ho#rl/ 0anager! ha.e e0anated 7ro0 internal pro0otion! In the proce!! o7 de.eloping 0anage0ent and in?!tore operation!= Chipotle e0pha!ie! on the !igni7icance o7 proce!! and c#lt#reK the 7ront line o7 e0plo/ee! that c#!to0er! relate ith= and holding on to the 7#nda0ental! that ha.e led to the co0pan/>! !#cce!!

Measurements +Financial &nalysis-

Chipotle &e%ican Grill i! a li0ited?!er.ice re!ta#rant that operate! in 0ore than 19** 7a!t ca!#al location!= ith the 0aorit/ o7 the re!ta#rant! located in the United State!= and ith a 7e in Canada= Ger0an/= United @ingdo0 and ,rance According to &ar;et Reali!t (*1'J the co0pan/ ha! o.er 4'=*** e0plo/ee!= and it! c#!to0er>! 7or0! a$o#t 1 o7 Con!#0er  Di!cretionar/ Select Sector 0123 $econd 4uarter "arnings

The co0pan/ reported earning! per !hare o7 M44' in e.al#ation! o7 M*42 Tho#gh the co0pan/>! !hare ent #p $/ ((= at M89) Appendi% CJ= $#t the Sa0e?Store Sale! groth ca0e in !igni7icantl/ loer= it a! !till in line ith the 0anage0ent>! direction o7 lo to !ingle digit!

$ame,$tore $ales Gro)th

The co0pan/>! re.en#e groth in (*1' i0pacted highl/ on it! Sa0e?Store Sale! Groth= a! it dropped $/ 42= co0pared to 1) in (*14 Appendi% DJ Thi! !ho! that= the inclination 7or !ale groth appear! to $e ha.ing a greater e77ect on tra77ic= hich 0anage0ent ha! little control o.er 0123 $econd 4uarter $ales Gro)th

The co0pan/ !ale! groth 7or the ( ND #arter o7 (*1' !ho! a decrea!e in the co0pan/>! groth 7ro0 (98 to 141= hich ha! a77ected the co0pan/>! !hare price The chart $elo !ho! that Chipotle>! !ale! groth ha! i0pacted negati.el/ on the co0pan/>! !hare  price= hich i! co0ing in loer than hat a! proected Key Financial (ighlights

According to &ar;et Reali!t data (*1'J= the co0pan/ e%perienced !e.eral po!iti.e 0etric! in it! (nd #arter report 7or (*1' and the/ are detailed $elo •

Total !ale! ere M1( $illion= co0pared ith M1*' $illion a /ear ago in (*14 Thi! i! a

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141 groth in !ale! Appendi% EJ Re!ta#rant le.el 0argin! i0pro.ed to (9= co0pared ith ()2 in the 0atching #arter  a /ear ago Thi! i0pro.e0ent i! dri.en $/ red#ction in 7ood co!t!= hich a! loered $/

CHIPOTLE STRATEGIC PLAN

16

1' /ear?o.er?/ear= or 221 a! a percentage o7 !ale! The loer 7ood co!t! are $ro#ght a$o#t a loer dair/ and a.ocado co!t According to the co0pan/= $ee7 co!t! added 1 to

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the 7ood co!t!= $#t it e%pect! the $ee7 co!t! to re0ain ele.ated La$or co!t! increa!ed $/ *9 to ((8 a! a percentage o7 !ale!= d#e to ine77ecti.e la$or  !ched#ling and e%ec#tion=B according to the co0pan/ Ho#rl/ la$or rate! al!o !a a 4(

• •

increa!e d#ring the #arter The ta% rate 7or the #arter a! 299 The co0pan/ hold! a$o#t M1' $illion in ca!h on it! $alance !heet and ha! ero de$t

Current Issues

Sloing !ale! groth and Pro7it ? according to 5S