Introduction
The restaurant business develops quickly and is now quite complicated to enter and make consistent profits. Fast-food restaurants present the most challenging segment of the restaurant services, as they offer similar menus at almost the same prices, and it is the clientele that forms demand rates. Chipotle Mexican Grill is a major restaurant chain that offers a variety of Mexican fast food . It is necessary to understand what the company does for the revenue, who manages it, and the risks it may face to figure out if the business is competitive and reliable or not.
Description
Chipotle was founded by Steve Ells in 1993 in Denver and was planned to be just a burrito restaurant. However, since then, it has become a company with more than 2000 stores worldwide and over four billion dollars annual profits. The menu that Chipotle offers today has grown since the company’s foundation. Today, it offers not only burritos but also a variety of tacos, burrito bowls, and salads made from fresh, naturally raised, and high-quality ingredients. The fast development and high approval ratings are provided not only by delicious food but also by the quick and quality service. The company targets getting-food-served-fast experience to gain the customers’ trust.
Operation
Chipotle has designed and implemented several methods that enabled it to provide the customers with the best services regarding the quality of the food and the speed of its preparation. The fast and well-done job of the company is enabled by the unique operation strategy it sticks to. First, unlike other fast-food restaurants, Chipotle offers a menu that consists only of four dishes made of the same ingredients, which fastens the process of preparation. Then, the food is made in front of the customers, so they can see mistakes, if any, and point at them. And there is one more peculiarity that ensures the high quality of the service. All Chipotle stores are owned but not franchised, which means that customers and their needs are treated carefully in every location.
Management
Chipotle, founded by Steve Ells, is currently managed by Brian Niccol, the Chairman and the CEO of the company. His career at food services began with the executive positions at Pizza Hut. He was chosen as the Chairman of Chipotle in March 2020, still being the CEO he became in March 2018, and the company’s revenue and sales have considerably grown. Chris Brandt serves as the Chief Marketing Officer of Chipotle since April 2018. His main responsibilities in the company are to develop marketing strategies and assess those of the competitors and run the company’s marketing service. The Chief Financial Officer of Chipotle is John R. Hartung, who has worked in the company since 2002. He manages finance, assesses the possible risks and damages, and plans the company’s budget . The professional team provides high revenues and customers’ approval the company possesses.
Risks
One of the major risk factors Chipotle faces is the dependence of the sales from negative headlines. In 2016 the company lost a significant part of its revenue due to the incident with suspected norovirus due to the mass media reports (Peterson, 2016). In addition, Chipotle may be susceptible to food inflation. The revenue from burrito sales may be unable to compensate expenses on the preparation process since the food prices are growing, and the burrito is not popular enough for its sales to compensate for the growth. As a result, the company may face a serious crisis.
Conclusion
To conclude, it is necessary to stress that Chipotle is one of the most quick-growing companies today that provides customers with fast and high-quality services. Such success was achieved with the help of effective management and unique operation strategies that helped Chipotle turn into a worldwide company with a billion revenue. However, the Chipotle team should consider the possible risks in order not to lose progress.
References
Management.(n.d.).
Peterson, H. (2016). Morgan Stanley identifies 3 risks to Chipotle’s business. Business Insider.
Real food right to you. (n.d.).