Chipotle: Organisational Capabilities And Competitive Advantage

Core Competencies

Discuss about the Research and Policy for Planned Events.

Chipotle organisation comes under the quick services restaurant industry. The company operate in this new emerging industry. The main feature of these companies under this industry is possibility of saving expense and reduces cost in operations. In addition, the speedy services and customer expectations serves well for these companies (Wheelen and Hunger 2017). The quick pickup services for food has become popular that the implementation process of this has become viable to serve customers. The menus are prepared on centralised suppliers (Getz and Page 2016). The most efficient part is placing orders and payment system of the companies, which can be done smoothly without interaction. There is also efficiency of having no outlet and saving ambience expense (Chipotle.com, 2017).

The key attractive features of QSRs are to maintain growth. The marketing and brand recognition of the Chipotle and locations are the key success factor of the industry. As a twenty first century company, the consumers have adapted according their own convenience. Therefore, the attractiveness increases with the acceptance of the services (Wheelen and Hunger 2017).

• Threat of competitors – As an exclusive quick service restaurant Chipotle in USA has many threats of competitors. Fast food restaurant chains and fast casual restaurant chains are also competition with the restaurant chain (Getz and Page 2016). Though it has dominated the full service restaurants, the bakeries, fast casual segments are a success in the market. The most challenging competitor of Chipotle is Qdoba and Pei Wei, though belonging to other segment of restaurant. The other most important competitor is Panera Bread (Getz and Page 2016).
• Threat of new entrants – Chipotle has a record of steady growth and is committed to the industry. The main criteria are the customer satisfaction to eliminate any risk of new entrants. However, this Mexican grill is well established and has variety of menus; they have shortage of competitors in the region (Ho et al. 2014).
• Threat of substitutes – quick service restaurants comes under a different type of industry. Although any kind of fast food chain is known as a prospective competitors of the industry, the key features of this industry makes it unique in giving the service in a different efficient way.
• Threat of suppliers – as being networked in the best suppliers in USA Chipotle gain this as an advantage (Ho et al. 2014). Having restaurants in 1100 location and variety of menu and a central storage system in their company.
• Threat of buyers – This rate of risk is average for Chipotle. The main criteria, that gives them the competitive advantage is the service delivery method and their unique flavours in chicken according the survey result. Though other large international food chain competitors like Mc Donald’s, El Pollo, Taco Bell, KFC and others are the alternatives comes as a threat for Chipotle (Chipotle.com. 2017).

Chipotle has the organisational capabilities and other competitive advantage and carefully trained people in the company (Chipotle.com, 2017). The promotional activities, empowered teams, strong personalities and freshly prepared food are the strong elements of the company.

• Over the top services and regarded as front line operative organisation.
• Suppliers are dominated by them as being a singular organic produce buyers in the country
• The order processing and delivery services at the point of sale are essentially contributed to the capabilities and of the company.
• Strategy of differentiated product positioning and higher consumer willingness to pay is known to contribute to the sustainability factor of the company (Rothaermel 2015)
• As belonging to a vast food sector and large target consumers can lead to more value in performance of the company. Operational efficiencies are also a strong capability of the company.
• The most favoured dish of the company is chicken preparations, according to the survey by QSR Magazine. This also leverages them about the survey of the company (Shabanova et al. 2015).
• High quality and socially responsible products as well as the green technologies takes care of their CSR activities and is an addition to the positive brand recognition.

The political component of environmental analysis is very important for the company. United States Restaurant change plays a essential role in growth of restaurants. The Zoning Laws, insurance, credit policies and governments permits also affects the business across the region. Thus, the different locations become convenience factor for the company (Shabanova et al. 2015).

The global economy affects the restaurants business and trends in food prices too. All over reduction in food prices has also affected the industry. However, with the CAGR of 8.8% since 1990, the demand of food as well as the fast food has grown exponentially over the years (Hill et al., 2014). Negotiation with the wholesalers has allowed Chipotle to hold competitive prices in the industry.

The high-level service, quality deliverance and redefined experience of food must be considered as the dedication to the society of the restaurant. Using health benefits and local products and flavours that are preferred in the culture are the main criteria to being socially responsible. Chipotle gives a good responsibility for the company (Hollensen 2015).

Chipotle has invested for technological advancements in the company. It also serves the operational proficiency in automated payment system, ordering apps and tortilla grills to increase the efficiency and effectiveness of the operation of the organisation. The grills add to the 100% efficiency in the operation. The company also invested about $10 million to redesign the strategies and mobile app improvements (Chipotle.com, 2017).

Strength ·       Different and innovative advertisements (Krishna 2014) ·       Green initiatives by the company and  organic or natural food products ·       Not having a franchise corporation ·       Strong and brand image and better loyalty from customers ·       1100 outlets all total and well networked	Weakness ·       High cost of materials like ingredients used and meat ·       High priced in comparison to competitors menu ·       Media of advertisement is limited ·       Location only based on USA
Opportunities ·       Variety of menu should be introduced ·       Can expand in international market ·       Can explore to online media advertisements opportunities ·       Can expand more on green food initiatives	Threats ·       A market where there is perfect competition can be developed ·       Change in demand for food ·       Change in customer’s taste and preference (Hollensen 2015)

As USA is most popular quick service, restaurant Chipotle already poses all the strategic competitive ability that can ensure their success further in the future. For improving all the aspects of business, high quality products and well services are at their disposal to use (Hill et al., 2014). In addition, the strategic advantage also lies in sourcing natural meat produces and other fresh foods from all over USA. The company has also 1100 people to source from and have 2750 salaried employees to resource from (Rothaermel 2015). Chipotle represents a fast casual segment of quick service segments. They also sources different ingredients from convenient sources. Chipotle black beans are certified organic foods and serve for daily purposes usage. As serving a majority of individuals aged from 18 to 24 years old, Chipotle has customised their flexibility  in serving (Kwansa and Parsa 2014). Also years of services have equipped them with good experience and enhanced their brand image in USA. The Mexican grill has net revenue of $3,214,591 with profit margin of 9.43 percent.

• The menu variety of Chipotle’s can be developed and more flexibility can give them advantage that is more competitive in the market. As equipped with naturally raised meat sources they can explore more in organic food variety of the company. Adding more signature products and for enhancements of taste and lowering the prices can help them expand the market more. Smoothening the service for more effectiveness can lead to competitive advantage too. Customising the product according the need of the customers can improve the services (Kozlenkova 2014).
• Increasing the marketing budget of the company may lead to expansion in the advertisements of the company and media marketing presence may lead to better exposure in the market (Kwansa and Parsa 2014). A larger audience of the company may be targeted with new media of advertisements.
• International expansion of Chipotle may help the company to grow as well as maximising the revenue. There is also a possibility of breaking into new markets and countries for possibilities in enhancements in brand recognition (Tripathi and Dave 2017).
• Alternative ways of implementing the strategies is to offer healthier items as they have already started to explore the organic food market.

References

Chipotle.com. 2017. Chipotle Mexican Grill. [online] Available at: https://www.chipotle.com/ [Accessed 27 Oct. 2017].

Getz, D. and Page, S.J., 2016. Event studies: Theory, research and policy for planned events. Routledge.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.

Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.

Kozlenkova, I.V., Samaha, S.A. and Palmatier, R.W., 2014. Resource-based theory in marketing. Journal of the Academy of Marketing Science, 42(1), pp.1-21.

Krishna, K., 2014. Analysing Competition in the Quick Service Restaurant Industry. Browser Download This Paper.

Kwansa, F.A. and Parsa, H.G., 2014. Quick service restaurants, franchising, and multi-unit chain management. Routledge.

Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.

Shabanova, L.B., Ismagilova, G.N., Salimov, L.N. and Akhmadeev, M.G., 2015. PEST-Analysis and SWOT-Analysis as the most important tools to strengthen the competitive advantages of commercial enterprises. Mediterranean Journal of Social Sciences, 6(3), p.705.

Tripathi, G. and Dave, K., 2017. Exploration of service quality factors in the restaurant industry: a study of selected restaurants in the New Delhi region. Hospitality Marketing and Consumer Behavior: Creating Memorable Experiences.

Wheelen, T.L. and Hunger , J.D., 2017. Strategic management and business policy. pearson.