Your assignment is to prepare and submit a paper on chipotle analysis. Chipotle’s Case Analysis al affiliation Do you think CMG is currently a successful company? Why or why not? Yes. CMG happens to be the largest player in the over $ 7 billion-plus “domestic fast-casual Mexican restaurant category”. In terms of total equity, CMG boasted of approximately US $ 1.245 billion as of 2012. With its international expansion, having 17 locations out of the United States as of October 2014 and a highly dedicated field team that delivers nothing but quality with the apprentice team leaders, and response to customer’s needs, CMG’s success is definitely on an upward trajectory in terms of equity, client base, operating income and assets. The company has also been able to maintain profit margins of about 36% as indicated by the chart below(Fundable, n.d).
Chart 1: CMG’s profit margin (Fundable, n.d.).
What is CMG’s business level strategy? Why do you think so?
CMG’s business level strategy includes cost leadership and product differentiation. In line with a dynamic corporate management under the leadership of Steve Ells, all Chipotle restaurants are company owned rather than franchised. Chipotle accepts fax orders coupled with the use of e-commerce from their website, as well as, an iPhone app allowing users to locate nearby restaurants, place orders, and prepay with their gift or credit card. These strategies offer dynamism, convenience, and efficiency to the customers, large sales, and profits turnover (Fundable, n.d.).
2. What are CMG’s key resources and capabilities that serve as the source of this business-level strategy?
First, Chipotle’s “food with integrity” mantra has been consistent throughout the years giving new and old customers something to identify with. Second, supporting local farmers, as well as, protecting animals serve as the key public relation resources. Well-established supply chains reduce logistics even during pick hours while focus on fresh and naturally raised ingredients is a parallel to most of its competitors (Fundable, n.d.).
3. In your opinion, will the competitive advantages CMG has currently developed based on this business strategy be sustainable? Why?
Yes. If CMG stays on the disciplined growth lane as it is, it can still maintain a debt-free balance sheet. Moreover, keeping away from mergers or franchising might allow it to keep a tight grip on the investments, equity, as well as, returns to investment in line with its business strategies.
4. What key weaknesses or challenges does CMG face?
The greatest challenge is competition. For example, from Panera Bread Company. Another is globalization. With the surge in globalization, restaurants are sprouting up, it might lose customers, and thus, revenues might decrease (Fundable, n.d.).
5. What do you recommend CMG do to respond to these challenges?
It has to be innovative. market oriented, and maintain a people-first culture. This way, it will regain control of the micro and macro-economic factors. It also has to invest more on advertising, as well as, an all-inclusive architecture. For instance, CMG allows the customers to see the food being prepared. However, in some restaurants, people in wheelchairs cannot do so. This can be construed as stigmatization and send the wrong customer signals.
Fundable. (n.d.). Chipotle Startup Story. Retrieved from .