Case Study



Chipotle Mexican Grill, Inc.: Disrupting the Fast–food Business

Case analysis Guidelines

Summary:

Give a detailed summary for the case

Case objectives:

1. Chipotle offers a straightforward, but illuminating case in how a company can use a novel strategy to establish a competitive advantage in a mature, intensely competitive industry and its prospects for sustaining the resulting competitive advantage.

2. The case applies a number of the concepts and principles outlined in Chapter 7 concerned with establishing and sustaining a competitive advantage.

3.  What expected from the case is:

a. How to devise a strategy that takes account of external changes in an industry (notably consumer preferences for fresh, ethically-sourced ingredients) then uses strategic innovation to develop a unique market positioning deploying a novel business model.

          i. The case can therefore be used to apply Kim and Mauborgne’s “blue ocean strategy.”

         ii.  In particular, by specifying the characteristics of Chipotle’s product offering and its market positioning relative to existing Mexican-style fast-food chains such as Taco Bell, a “strategy canvas” can be plotted (see Strategy Capsule 7.2 and Figure 7.2 in Chapter 7).  

b. Assessing the sustainability of a firm’s competitive advantage. You can assess the extent to which potential competitors can imitate Chipotle’s strategy through identifying and assessing barriers to strategy imitation including: pre-emption, uncertain imitability, and barriers to the acquisition and replication of resources and capabilities.

4. Applying the ideas of business system and business model to recognize the role of complementarity among the different components of a firm’s strategy and operations, and its implications for challenges of business development and the sustainability of competitive advantage.

Case Questions:

1. What is Chipotle’s strategy? Why has this strategy been so successful?

2.  Can Chipotle sustain its competitive advantage?

3. Should Chipotle diversify into other types of cuisine (e.g. pizzas, Asian cuisine)?

Case Discussion and Analysis:

Please consider the following tips to conduct your analysis:

       Chipotle’s Strategy
o   Strategy components and areas of focus
o   Why has Chipotle’s strategy been so successful?
o   Internal consistency

The Sustainability of Chipotle’s Competitive Advantage

o  Chipotle’s growth, profitability, and shareholder returns between 1993 and 2014.

o What are the key threats to the sustainability of competitive advantage.

o   The sustainability of consumer interest.

Should Chipotle Diversify into Other Types of Cuisine?

o  Where Chipotle’s best prospects lie

o Are Chipotle’s resources and capabilities and its overall business system can be readily imitated by competitors? What will be the implications?

o How then can Chipotle be able to sustain its performance?

o The devastating impact of Chipotle’s recent problems with food poisoning and its impact.

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