Chipotle Case Study

Does Chipotle have a good enough strategy and adequate resource strengths and competitive capabilities to compete effectively against Taco Bell?

Yes, at least for now.

Why? Answer is two fold

Competitive Strengths- Chipotle

Background of Chipotle

Recommendations

• High quality food products
• Good reputation among consumers
• McDonald's as a financial asset
• Customizable menu
• High customer satisfaction
• Different product offerings (beer and margaritas)

Groups E and H

• In 1993 Steve Ellis opened the first Chipotle in Denver, CO.
• Original reason behind the openings
• McDonalds involvement (1998)
• "Food served fast did not have to be low quality and that delicious food did not have to be expensive" -Ellis
• "Food with Integrity"

• Franchise (site Chick fil A)

• Expand into adjacent businesses- Site Shophouse & Pizzeria

• Continue the good work

Best-cost provider strategy:

A hybrid of low cost provider and differentiation strategies that aim at providing desired quality/features/performance/service attributes while beating rivals on price.

Chipotle Weighted Assessment

Recommendations

Taco Bell's recent poor performance

• Decreasing portion size
• Low quality
• Low-cost provider strategy

Chipotle's Competitive Strengths

• Better food, environment, portions
• Best-cost provider strategy

Quality: 10 (2)

Image: 9 (1.35)

Location: 7 (.35)

Marketing: 6 (.9)

Distribution: 6 (.3)

Product Innovation: 2 (.2)

Financial resources: 7 (.35)

Relative cost: 5 (.5)

Customer service 8 (1.2)

Moe's

• Chipotle should continue expansion efforts
• First-mover advantage
• More innovative menu options
• Improved marketing approaches

• Founded in Atlanta, Georgia in 2000
• Over 420 locations in 26 states
• Menu includes: Burritos, Quesadillas, Fajitas, Tacos, etc...
• Catering Service
• "Welcome to Moe's"

Overall Score: 7.15

Moe's Weighted Assessment

Strongest Competitor - Moe's Southwest Grill

Quality: 8 (1.6)

Image: 8 (1.2)

Location: 5 (.25)

Marketing: 6 (.9)

Distribution: 6 (.3)

Product Innovation: 8 (.8)

Financial resources: 7 (.35)

Relative cost: 5 (.5)

Customer service: 8 (1.2)

• FOCUS's investment gives them more financial resources
• Catering options
• Good reputation in consumers' mind

Strongest Competitor - Moe's Southwest Grill

Overall Score: 7.1

Qdoba Weighted Assessment

• ​​Similar menu with more entrees and more customization options
• High quality food with no trans fats or msg
• All meals came with chips and their homemade salsas
• Friendly hospitable atmosphere including shouting "Welcome to Moe's" whenever a customer walked in

Taco Bell Weighted Assessment

Weighted Competitive Strength Assessment

Does Chipotle have a net competitive advantage?

Quality: 8 (1.6)

Image: 8 (1.2)

Location: 6 (.3)

Marketing: 5 (.75)

Distribution: 5 (.25)

Product Innovation: 7 (.7)

Financial resources: 5 (.25)

Relative cost: 5 (.5)

Customer service 7 (1.05)

Qdoba Mexican Grill

Competitive Strengths- Taco Bell

• Quality: 4 (.8)
• Image: 6 (.9)
• Location: 8 (.4)
• Marketing: 10 (1.5)
• Distribution: 9 (.45)
• Product Innovation: 9 (.9)
• Financial resources: 7 (.35)
• Relative cost: 9 (.9)
• Customer service: 5 (.75)

• 1,201 company owned and 4,029 franchised stores in US

• Breakfast sales have shown positive results

• King of innovation - always comes up with something new

• Opened 236 restaurants in 2014, most in a decade (89% were franchised)

• Opened in Denver 1995
• Acquired by Jack in the Box, Inc. in 2003
• 538 locations in 42 states and the District of Columbia as of October 2011
• "Artisanal Mexican Kitchen"
• Breakfast options and 24 hour locations

• Cheapest price of all competitors

• Ad Age Marketer of the year 2013 (Spent $280 Million on measured media)

Overall Score: 6.95

Overall Score: 6.6