Chipotle Mexican Grill (CMG) is a dynamic restaurant chain that offers Mexican type of foods in a made-to-order format. Food is prepared in an open kitchen and the clients choose the ingredients required to have their preferred meal. The customers select the ingredients by themselves. Chipotle was first opened in 1993 in Denver, Colorado, and about 20 years later, the company had advanced as one of the most prosperous, and a quickly growing fast-casual restaurant chain (Witts, 2015). The first location that was opened in 1993 gave birth to over 2000 restaurants that have employed about 60,000 workers; all who are dedicating to creating a culture that promotes the mission “Food with integrity.” The share price at the organization’s 2006 initial public offering has was $22.00 and attained a peak of $758.61 in the June 2015 (Gilliard, Hoffman, & Baalbaki, 2017) . A retrieval of the very recent financial report of the company reflects yearly sales of about $4.5 billion dollars, which is a rise of 39 percent since 2012 (Witts, 2015). The financial breakthrough displayed is because of the company producing tailored, high quality, natural and sustainably grown produce, locally produced in a clean, ordered restaurant.
A record of their recent success according to ACSI customer satisfaction survey is that CMG was the second runner’s up to Chick-fil-A, defeating its rivals like Taco Bell as well as Panera Bread in 2017 (Witts, 2015). The organization has maintained an upward growth while endeavoring to maintain a competitive edge over other companies by providing a better product that matches the ethical and environmental guidelines. Chipotle offers pork that has been raised naturally by 100 percent as well as chicken and beef that has been naturally raised by 80 percent (Walker & Merkley, 2017) . These foods are offered at affordable prices, all to win the interests of the customer. Considering these factors as well as CMG’s positive cultural impact, the company can be confidently termed to be successful.
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Mission, Vision and Ethical Culture
The mission of Chipotle is to provide Food with Integrity. The ingredients that CMG offers are healthy, sustainable in terms of how it is locally grown and produced, which reinforces the mission of the company. The mission statement of Chipotle is changing the way people think about and eat fast food, and it is catching on—fast. Whether you are interested in restaurant jobs or the “corporate” side of things, there is plenty of opportunity for you (Walker & Merkley, 2017) . The company does not have a vision statement yet but through its mission, it can clearly see that the company is visualizing to be a world leader in providing natural foods with a simple menu customized to the customer’s needs.
The company’s key mission, vision, and ethical culture emphasizes the commitment to provide food with integrity and altering the perspective of people about eating fast foods. Chipotle’s ethical culture comprise sticking to the foundational requirements of a simple menu as well as simple, interactive employee roles (Haberman, 2015) . Simply put, the company is committed to finding the very best ingredients for their customers with much respect for the animals, the environment as well as farmers.
Products and Services
In terms of products, CMG has many stores that are spread across to provide foods to their customers that are of high quality, and with sustainably produced ingredients among the menu requirements. The company is focused on supplying organic and non-genetically-modified-organic foods to the customers who have now begun to be conscious of their health. Foods such as beef, chicken, and pork that are among the menu items are locally sourced (Gilliard, Hoffman, & Baalbaki, 2017) . In terms of services, the company is offering a casual dining market whereby it makes the consumers foods according to what they have ordered.
Customers
Chipotle understands its customer base very well. The company has determined that its consumers appreciate the differentiation in a flavor of the natural meats as well as the fresh vegetables they offer to them. They have customers throughout the states who visit their stores that are spread in most part of the nation (Garcia, 2016). Families and college students visit the stores for meals that are made of them upon choosing the ingredients they want.
Social Responsibility
One of their social responsibility is to supply foods such as beef, chicken, and pork that are sourced from farmers locally. Therefore, the farmers within the communities benefit from the profits they make by selling products to the company. In response to social responsibility, the company focuses on a campaign of “Food with integrity.” They are also adopting alternative forms of energy like solar power so that they do not pollute the environment. The operations of the company are customer-centrically and the local community appreciates such services (Gilliard, Hoffman, & Baalbaki, 2017) . There is a positive return of investments so that the shareholders are left satisfied as well as the stakeholders in the business and the society who enjoy a personal connection with the company through the utilization of social media platform.
Internal and External Trends that Impact the Business
Competition has increased and food costs are rising. Among others, such trends impede the growth rate of the company. Externally, Chipotle has experienced stiff competition from Qdoba and Taco Bell’s fresh rollout of its Cantina Bell menu (Walker & Merkley, 2017) . Even with this competition, the company has endeavored to produce quality products concurrent with the needs of the customers, which have caused it to maintain significantly its good financial results. The company has experienced short stock supply, even though this has not changed its focus. To influence the patron’s loyalty as well as sustain its customer base, the company is committed to source sustainable foods that are locally produced (Haberman, 2015) . Internally, menu prices have to be increased gradually to counterbalance some of the rises in the food costs without keeping away the customers. The company counters internal and external trends by differentiating themselves and creating loyal customer base based on their “Food with integrity” mission.
Rising competition among new entrants in the market implies that Chipotle has to fight to gain more market share. The competitors are offering similar products and services to the customers. Chipotle overcomes this by ensuring that they consistently differentiate themselves (Garcia, 2016). Consequently, the company has achieved brand loyalty, as its customers know that they do not compromise when it comes quality ingredients and sustainable sourcing locally to provide food with integrity.
Corporate Leadership
The key executives of Chipotle include the chief executive officer and director who is Brian R. Niccol, the chief financial officer who John R. Hartung, the chief restaurant officer who is Scott Boatwright and finally Jim Slater, who is the managing director of Europe. Other board members include Steven Ells, Albert Baldocchi, Neil William, and Paul Cappuccio (Gilliard, Hoffman, & Baalbaki, 2017) . The corporate leadership also entails executive committees such as the audit committee, compensation committee, nominating committee and corporate governance committee. This leadership is steering the company to be recognized by many customers worldwide who appreciate tailored natural fast foods .
References
Garcia, T. (2016). Chipotle is out of the top 4 on list of fast casual Mexican restaurant brands.
Gilliard, D. J., Hoffman, D. L., & Baalbaki, S. (2017). Is Chipotle Mexican Grill Successfully Recovering from Its Food-Related Incidents? Journal of Marketing Development and Competitiveness , 11 (4), 34-48.
Haberman, M. (2015). Hillary Clinton, just an unrecognized burrito bowl fan at Chipotle. The New York Times.
Walker, R., & Merkley, G. (2017). Chipotle Mexican Grill: Food with Integrity? . Kellogg School of Management.
Witts, S. (2015). Chipotle opening seventh London site. Big Hospitality .
Part II
An order was issued on Chipotle that required it to produce some many documents that could tell about the restaurant in Simi Valley, California. One of the outlets of Chipotle underwent a bizarre incident in August 2015 that was only specific to it (Strom, 2015). The company’s earnings dropped by $2.85 a share at the end of that year (Czaplewski, Olson, & McNulty, 2014). The shareholders of the company are growing more weary and anxious every day. In the following one year, the company’s stock dropped by about 30 percent (Strom, 2015). People have gotten ill in their numbers after taking their meals at Chipotle.
In Boston, it was reported that 120 university students became sick after taking foods from Chipotle. Also in August 2015, Minnesota health and agriculture representatives determined an epidemic of salmonella among consumers of 18 different Chipotle stores situated majorly in the Twin Cities metro region (Strom, 2015). The report mentioned that the tomatoes were the cause of the epidemic that influenced about 64 consumers (Klink & Wu, 2017) . Ten of those consumers that got sick because of the outbreak were hospitalized. Many dozens of instances have risen when the company’s customers have been diagnosed with E. coli infection in nine states in 2016 (Czaplewski, Olson, & McNulty, 2014). Chipotle did not find this ordeal an easy one as it has often marketed itself as a healthier alternation to fast food provision. In fact, the company considered itself as the first renowned national chain that endeavored to get rid of genetically modified ingredients from a great part of its menu. Therefore, these scandals shook its ethical considerations and commitment to deliver because its products were found to be causing its consumers sick.
The share price at the organization’s 2006 initial public offering was $22.00 and attained a peak of $758.61 in the June 2015 (Czaplewski, Olson, & McNulty, 2014). However, during the period of scandals, the earnings dropped by $2.85 a share in 2015 (Strom, 2015). A retrieval of the very recent financial report of the company reflects yearly sales of about $4.5 billion dollars, which is a rise of 39 percent since 2012 (Bellman, Rask, & Varan, 2017). The company could have avoided these scandals by reinforcing integrity as their mission suggests. Both the employees and local suppliers were supposed to be vigilant and demonstrate honesty, which makes up the organization’s integrity objective. The employees could have practiced these values by enforcing a good judgment, upholding high standards of ethics and eliminating any circumstances that amount to a conflict between the interests of the company and the customers (Klink & Wu, 2017) . The goals are not just for the employees to demonstrate their loyalty to the company but also to value several other business stakeholders of Chipotle like customers. With such steps, the employees would not have entertained contaminated products from the local customers that sickened customers.
The ethical questions that surrounded this situation include why they are producing products that were contaminated, how they could be making bigger profits than competing companies could yet they allude to buying ethically raised meats, and among others. Natural meats have higher prices compared to meats that are raised in factory farms. Chipotle could not possibly be authentic about their ingredients to match up with the demands and still maintain the same profit margin as its competitors. Even though, they defined themselves by stating that ethically raised meats have a better taste, which attracts more sales. It also raises many questions on how Niman Ranch, which is one of the Chipotle suppliers, is able to sell “natural” meat comparatively at a cheap price if it is not compromising honesty of that “natural” tag (Bellman, Rask, & Varan, 2017). Chipotle has a challenge of ensuring a constant menu year-round across the entire nation. Some Chipotle’s stores lack natural avocados, lettuce, and tomatoes, unfortunately without the knowledge of the customers.
The company would also have put in place a whistleblower policy whereby stakeholders would quickly raise any complaints or concerns concerning the business and operations of the company. In that case, the company would have detected the problem of the products being supplied to them on the onset and dealt with it (Czaplewski, Olson, & McNulty, 2014). Aspects relating to audit reports, regulation of accounting and violations of the organization’s codes of conduct may have been strictly observed. With this, they might have attained transparency and accountability, which should be observed not just in their activities but also the operations of the business.
Managers can learn a number of things from the circumstances that revolved around the Chipotle scandal. They should make sure that the employees, as well as other stakeholders, follow and support the codes of conduct guiding their companies. They need to have a system that facilitates reporting any violations or compromises and of making inquiries on ethical matters that relate to the company. Managers need to institute a user-friendly system of reporting that allows stakeholders or specifically the employees to report unethical behaviors or tendencies, being sure of their confidentiality (Yohn, 2014). For instance, an ethics and compliance office may give its telephone contacts so that any anomalies are easily reported or a mailbox could be put outside the premises. The managers have an obligation to state and reinforce their central values and policies frequently, reciting the behaviors expected of the employees and the consequence of disobeying them. They should also be ready to discipline any violator of the standards by applying the adopted standards. Such approaches will make the employees responsible and accountable for any situations that surround the company they are serving.
References
Bellman, S., Rask, A., & Varan, D. (2017). How Chipotle used unbranded content to increase purchase intention by changing beliefs about ethical consumption. Journal of Marketing Communications , 1-20.
Czaplewski, A. J., Olson, E. M., & McNulty, P. (2014). Going Green Puts Chipotle in the Black. Marketing News .
Klink, R. R., & Wu, L. (2017). Creating ethical brands: the role of brand name on consumer perceived ethicality. Marketing Letters , 28 (3), 411-422.
Strom, S. (2015). Chipotle posts another quarter of billion-dollar sales. New York Times.
Yohn, D. (2014). How Chipotle changed American fast food forever. Fast Company .
