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Running head: strategy developmnet 0

Strategy Development

Introduction

In business, the most influential and critical factor is strategy. It can potentially make or break the company. The future of any organization directly depends upon the strategies it has. The current paper will describe the strategy and its appropriateness to Chipotle Mexican Grill. The study will summarize the strategies the management of the company took to the company's recent development. The paper will also analyze the strategies adopted by competitors to rule the market. Further, the study will analyze the restaurant industry to help the CEO develop competitive strategies. Lastly, the study will propose one-year and five-year goals for the company to increase sales and ensure growth and success.

Definition of Strategy and its appropriateness to Selected Company

The strategy is something that is known as planning used for achieving some targets or goals. Essentially, such goals or targets are concrete, and their achievement can improve the business (Kohne, 2019). The definition of strategy best fits the selected company: Chipotle Mexican Grill, as the company incorporated strategy to achieve some long-term goals and successfully achieved those goals.

The company started its business operation as a traditional food manufacturing company. In 1993, the company's initiation aimed to serve people with food delivery without fast food experience. According to Grant (2016), as time passes, they developed strategies such as the availability of high-quality ingredients, innovative cooking style, and unique interior design to grow in the market. They put the strategy into practice, and today, they are known as a renowned fast-food chain due to quick-service restaurants. Their strategy to provide adequate dining facilities to the customers as a quick-service restaurant is becoming more popular in the U.S.

Chipotle Mexican Grill's strategy to equip their fast food with healthy, quality, and tasty ingredients proved to be true since they showed respect in their actions while dealing with farmers, using animals, and protecting the environment. Their strategy to provide food with integrity is a unique idea that made its famous brand. The company started the strategy of "Food with Integrity" in 2003. The idea was unique, giving them a competitive edge in the market since consumers with health concerns warmly welcomed their idea and shifted to the brand. The company adopted the strategy to ensure its customers that healthy food was no more a dream and could easily access healthy, quality, and tasty food at the doorstep of Chipotle.

Though McDonald's and Yum! The brand is dominating the fast-food market, and Chipotle Mexican Grill is a small company compared to the two giants. Yet, the latter has been performing very well, taking 12.24% growth in its overall revenue. The company effectively achieved 6.93% of the market share in the third quarter of 2020, dominating the market successfully ((CSIMarket, 2020).

Summary of Strategies Chipotle Mexican Grills' Management took

Chipotle's strategy includes quality food, fresh component, swift delivery, and low price; however, the most dominating strategy that helped the company grasp considerable market share is the novelty in the adequate dining facility and fast food delivery. The company's management took the initiative of "Food with Integrity" in early 2000 to attract customers concerned about a healthy diet. The company engaged the farmers to take fresh ingredients as a unique idea and difficult to adopt by competitors immediately. The management initiative helped the company increase its market share by expanding business operations throughout the U.S. (Nanjapla, 2016).

The expansion of any business keenly depends upon the strategies taken by its management. Apart from other components, capital is one of the most critical components that strengthen the expansion decision. Steve Ells, the found and CEO of Chipotle Mexican Grill, did not restrict the menu of the company to Mexican foods only but expanded it to many other worlds' famous food. That is the reason the company opened its Asian Kitchen in 2011. Since America is a place where millions of South Asian population lives, the strategy attracted that population, leading to drastically increasing its sales.

Competitors' Strategy Analysis

Competition in a market is apparent; some markets have low competition while others have stiff competition. In a market where stiff competition prevails, new entrants always face difficulties while the key players also keep changing their business strategies to remain competitive. The main competitors of Chipotle Mexican Grill include Moe's Southwest Grill Restaurant and Qdoba Mexican Eats.

Moe's Southwest Grill Restaurant compete for the market by adopting a fun and friendly environment for its customers. Amazingly, they use Movie and TV stars in their menu items that make them unique. Moe's market strategy is different since it believes in investing in local stores to attract more customers. The company spent more than two million dollars on a community outreach program reaching more customers countrywide. Moe's Southwest Grill Restaurant's friendly atmosphere attracts more and more customers because people do not come out of their homes for a meal only but also for hanging out and fun (Kulikowski, 2013).

Qdoba Mexican Eats' specialty is Mexican foods; the company has expanded its business outlets and franchises to more than 700 locations. Most of the business analysts believe that Qdoba is the main competitor of Chipotle. The company did not initiate a franchise facility for individuals before 2019. The company's ownership transferred to Apollo Restaurant in 2018, selling all the rights of the company to the big giant in fast food. The company has been using mobile phones as a marketing tool since the SMS initiative was designed to grasp more customers' attention (Kats, 2020).

Industry Analysis for CEO of Chipotle to Develop Strategy and SWOT Analysis of Chipotle

Before the year 2019, the restaurant industry has been growing. The novel Covid-19 has drastically changed the whole world, decreasing the overall sales and growth of industries. The restaurant industry has suffered a lot just because of the pandemic since it restricts people to gather. By the end of 2017, the hotel and restaurant industry's contribution to the country's Gross Domestic Product (GDP) was 4%, which was a considerable percentage. During the year 2019, the total amount of revenue generated by Chipotle Mexican Grill was $1.21 billion, which was a considerable amount earned by a company against its competitors (Lucas, 2019).

The SWOT analysis of Chipotle reveals the following facts and figures;

Performance Goals for One Year and Five Years

Since the culture of the organization is entrepreneurial, it should be shifted to customers. The next one-year goal for Chipotle is related to building a customer-oriented culture. An organization's success depends on customer satisfaction since one satisfied customer can potentially refer to five more customers to the company. Like Qdoba Mexican Eats, the company should focus on social media and another digital marketing initiative for the next year. The use of digital tools will increase the sale yet the customer's satisfaction. People are more interested in gathering instead of eating so the provision of free Internet facility within the premises will contribute to the customer's satisfaction. The fast-paced world has changed the eating habit of people and made them busier. They want to get a Pizza in a minute after placing the order so that the active responding process will benefit the company.

The company has a limited supply chain that is restricting the company from expanding more. The goal for the next five years should be starting business operations at different locations. The opportunity of the franchise to individuals will be a great addition. Chipotle Mexican Grill should not be restricted to the U.S and Canada only, but it should start its operation in South Asian countries where people are more involved in eating tasty foods.

Conclusion

A strategy is an essential tool for a company to ensure growth and success. Organizations perform well if they have concrete strategies not only on paper but in practice. Chipotle Mexican Grill is dominating the market since it has some concrete business strategies. The company can expand its business operations if it focuses on the recommendations mentioned above. The fast-food industry is undoubtedly a growing market that has potential opportunities for existing companies and new entrants. The only thing is a strategy, whether related to business, marketing, finance, HRM, or society. All the strategies can help the business grow and compete.

References

CSIMarket. (2020). Chipotle Mexican Grill Inc. Retrieved January 21, 2021, from https://csimarket.com/stocks/compet_glance.php?code=CMG#:~:text=Total%20Segment%20Market%20Share%20Q3,share%2C%20to%20approximate%206.93%20%25.

Kats, R. (2020). Qdoba Mexican Grill advances mobile marketing initiatives with SMS. Retrieved January 22, 2021, from https://www.marketingdive.com/ex/mobilemarketer/cms/news/messaging/6655.html

Kohne, A. (2019). Business development customer-oriented business development for successful companies. Wiesbaden: Springer Vieweg.

Lucas, A. (2019, April 24). Chipotle earnings top estimates as digital sales double boost same-store sales outlook. Retrieved January 23, 2021, from https://www.cnbc.com/2019/04/24/chipotle-q1-2019-earnings.html

Nanjapla, R. (2016, January 15). A Look at Qdoba Mexican Eats' Business Model. Retrieved January 24, 2021, from https://marketrealist.com/2016/01/look-qdoba-mexican-grills-business-model