Chipotle Mexican Grill, an American fast-food franchise deals with Mexican foods, suffered a massive blow to its credibility and profitability following the E. Coli disaster. On three occasions back in 2015, customers and employees from its restaurants in Minnesota, South California, Seattle, Portland, Oklahoma, South Dakota, Kansas and Boston became ill. Investigations into these illnesses indicated that E. Coli and norovirus, which are associated with food contamination, were responsible. However, a multi-agency team involving the CDC, FDA together with the U.S. Department of Agriculture’s Food Safety and Inspection Service, did not confirm the allegations. In spite of a lack of evidence to link the cases with food contamination at Chipotle, its profits and stock price dropped significantly. Most customers fearing for their health opted to stay away from Chipotle restaurants, but this trend can be reversed. Chipotle needs to engage in sustainable business practices that are aligned with global market trends and demands.
Chipotles Brief History
Steve Ells founded the first Chipotle Mexican Grill in 1993 in Denver Colorado to sell Mexican recipes most specifically burritos. The first restaurant was very successful as it sold over 1000 burritos daily occasioning the establishment of more restaurants. McDonald's helped Chipotles to thrive as it was the restaurant's largest investor, which helped Chipotle to expand from 16 in 1998 to 500 stores in 2005 (Walker and Merkeley, 2017). In 2007 Chipotle bought back its stake from McDonald's and became 100% company-owned necessitating it to go public. The restaurant suffered a significant drawback following the E. Coli disaster prompting Steve Ells, the founder and CEO to step down and his place taken by Brain Nichol. The company is still struggling to grow its customer traffic once again to regain its popularity and profitability
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Assessment of how companies balance duties to engage in socially responsible and sustainable business practices with economic responsibilities to shareholders
Companies must master the art of balancing their responsibilities so that they can manage their financial obligations to shareholders and still engage in socially responsible and sustainable business practices. Socially responsible business practices are indicative of corporate activities aimed at benefiting individuals, the environment, and the community (Glavas, 2016). These activities, which include grants, sponsorship, and donations, help companies to develop and maintain a positive image, which is good for business. Companies must also meet their economic responsibilities and obligations to their stakeholders who include clients, suppliers, financial institutions, and regulatory agencies. Chipotle must be involved in their communities to show that they are committed to them in an attempt to regain their high customer traffic. In the same breath, the company ought to assure its stakeholders that they can address their economic concerns.
Identification and critique of policies, practices, principles, and approaches management is using to implement and execute Chipotles strategy
Chipotle’s administration is determined to rise from its 2015 drawbacks and regain its customer traffic. So far, the restaurant has been successful considering that it is capitalizing on its ability to provide fresh food. In this era of increased health consciousness, Chipotle allows its customers to choose the ingredients that they want in their burritos and tacos something that can help bring back customer traffic (Plow, 2019). In line with this objective, Chipotle is committed to training its employees not in the old tribal way of passing information but rater technologically supported training. The company has bought ipads for its employees, which helps moves training out of the kitchen, making it more effective. This approach is commendable since, apart from reducing employee turnover, it will help avert future food poising cases and in this way, increase customer traffic.
Determine if and why a company’s system of incentives and rewards promotes adept strategy execution and operating excellence. Identify the key features of a company’s corporate culture and assessing if and why a company’s culture aids in the drive for proficient strategy execution and operating excellence
A company’s system of incentives and rewards plays a crucial role in promoting the implementation of business strategies and excellence. Employees must feel that the company appreciates their efforts before they can commit themselves to perform within the companies’ expectations. Any company that is keen on having its strategies executed and be excellent must adopt a winning corporate culture. An influential corporate culture encourages dialogues and feedback from employees, invests in training and development, promotes diversity and inclusion, has an effective reward system, and has clear goals (Tasgit and Ergun, 2017). If Chipotle is to regain its customer traffic, the customers must sense its commitment to creating a productive corporate culture. While the company focuses on Mexican dishes, it must continue allowing customers to choose their ingredients in pursuit of promoting diversity and inclusion. In the end, the company will have efficient employees who can advance its vision and goals to the target customers.
Unique demands of competing in industrial environments where technological developments are an everyday event, product life cycles are short, and competitive manoeuvring among rivals comes fast and furious
Competition in the food industry is high and any company that is keen on being profitable and sustainable must put in place best business practices and strategies. The modern food industry characterized by technological developments, short product life cycles and competition to get considerable market share. Any company that is not up to speed with these features risk losing its credibility and in turn, its client base. Chipotle restaurants know all too well what it meant to have low client traffic following its E. Coli disaster back in 2015. However, the company can reverse this trend if it embraces technological developments that enhance real-time delivery of services. Chipotle is in a race to fix its restaurants to ensure that it gains its customer traffic back so that it remains competitive in the fast-food industry. The main thing that Chipotle is doing to recover from the unfortunate event is to digitize its employee training and development (Plowman, 2019). The company has secured ipads for its employees at all levels to enhance training on food safety, management systems, as well as customer experience. Besides, Chipotle developed a leadership program called ‘Cultivate U’ where employees learn situational leadership, time management, and performance coaching (Plowman, 2019). These strategies are aimed at enhancing Chipotle’s excellence in the food industry and make it have a competitive edge. The strategies may help the company to regain customer loyalty, which would translate to increased customer traffic.
Competitive capabilities play as significant a role in the strategy-making, strategy-executing scheme of things as industry and competitive conditions do
Business strategies are ways of ensuring that companies remain sustainable even in the face of noticeable economic hiccups. For a company to benefit fully from strategy, the approach must be aligned to the prevailing industry conditions and needs. A company should be seen to possess competitive capabilities, which refer to an organization’s actual performance as compared to its competitors. In this case, a company should be considered better in terms of products, services, employment terms, and customer experience. Companies with better competitive capabilities are in a better position to plan, develop, and execute states as they have human and physical resources. Of importance, here is the fact that such a company should be aware of the competitive and industry conditions. Chipotle has various competitive abilities in that it responds to the demand for organic foods by offering fresh products as opposed to refrigerated ones. Additionally, the company allows for client autonomy when it comes to selecting the ingredients for its signature tacos and burritos. The company hopes to have “Chipotlane,” which are drive-throughs for customers to pick up their digital orders (Lucas, 2019). These capabilities allow the company to operate in a saturated industry and still be profitable as it plans and executes its business strategies effectively.
Strategies to thrive in the ongoing globalization of the world economy
Companies operate in constantly changing market and economic conditions, which may threaten industries that are not competitive. In this case, companies must brace this reality by coming up with globally appropriate strategies that can help them to remain viable and profitable. These companies ought to invest in practical strategic management so that they can thrive in cross-cultural situations if they plan to extend to international markets. Chipotle is one company that needs to reconsider its strategies to ensure that it is aligned to global market trends that support cross-cultural contexts. The company, which prides itself on Mexican dishes, needs to rethink rebranding its business image to have a universal feel rather than a regional feel (Plowmn, 2019). Whenever one thinks about Chipotle, one cannot help but associate the food with Mexican culture something that does not align with the global market trends. If the company is to extend operations to other countries other than the US, it needs to incorporate the countries’ cultural themes in its menus or risk rejection. Customers must be able to associate their cultural affiliations with Chipotle and in this way help the company to regain its customer traffic,
In conclusion, Chipotle Mexican Grill Inc can recover its customer traffic that it lost to the 2015 E. Coli disaster if it develops, implements maintain effective business strategies. The company needs to conduct market research to determine the exiting food industry gaps to fill them. In line with this, the company ought to focus on global market trends to understand what clients want. This business strategy is essential considering that clients have varying needs when it comes to food. Chipotle has to insist on safety during procurement, transportation, storage, preparing, cooking, and serving of meals to prevent a repeat of the same. More so, the company needs to invest in technology to provide real-time services to its customers and in this way, have a competitive edge. Of importance is to have a good relationship with its stakeholders most especially employees and customers as these enhance its business practices. To this end, the company will be in a position to regain its customers and clinch back its former market share.
References
Glavas, A. (2016). Corporate Social Responsibility and Organizational Psychology: An Integrative Review. Frontiers in Psychology, 7(144), 1-13 ·
Lucas, A. (2019, November 5). Chipotle staged a comeback. Here’s how it plans to keep the growth going. CNBC. Retrieved on 22 January 2020, from https://www.cnbc.com/2019/11/05/chipotle-staged-a-comeback-heres-how-it-will-keep-the-growth-going.html
Plowman, S. (2019). A Strategic Audit of Chipotle Mexican Grill, Inc (Honours Theses). University of Nebraska-Lincoln, Lincoln, NE, USA.
Tasgit, Y. S. & Ergun, E. (2017). Corporate Culture and Business Strategy: Which strategies can be applied more easily in which culture? International Journal of Business and Social Science, 8(6), 80-91.
Walker, R. & Merkeley, G. (2017).Chipotle Mexican Grill: Food with Integrity? Northwestern Kellogg School of Management, Evanston, IL, USA.
