Analysis of the Chipotle Mexican Grill Service
Introduction
The purpose of this assignment is to conduct a multifaceted and complete analysis of the service, provided by the Chipotle Mexican Grill restaurant, operating in direct customer service in own physical space as well as catering. To narrow down this analysis and due to the limitation of the personal experience only to direct customer service in the restaurant, this document will look specifically at this aspect of the business. To better understand the proposition of the restaurant it is important to look at its business model. Founded in Delaware in 1993, today the organization operates over 2000 restaurants across five countries, including the US, France, Germany, UK, and Canada. The company is growing at a rapid pace, opening on average 250 restaurants per year over the past five years. In spite of the challenging decade, characterized by the global financial crisis and stagnation of the domestic market, Chipotle continues expanding its operation and demonstrate the stable competitive position.
The proposition of the company is to serve traditional Mexican food with the focus on burritos, burrito bowls, tacos, and salads. The entire customer experience is built around a sustainable business model, fresh ingredients fast service. To differentiate the menu and ensure that the restaurants attract clients, who are not as passionate about the Mexican cuisine offer, the company have complemented its portfolio with the SouthWest Asian Kitchen Restaurants, serving contemporaryAsian cuisine. Moreover, the recent strategy demonstrated further focus on diversification, when the organization took the decision to invest in three pizzerias. The values of the company include the transformation of public opinion about fast food, bringing forward the concept of healthy fast food options.
Business-Level and Corporate-Level Strategies
Chipotle operates in a very competitive environment with a large number of market players. In this environment, the pressure on the costs builds on significant challenge along with the need to differentiate the product through incremental customer experience. With that in mind, the Brand identity of the company as a sustainable company with the integrity of the service and product justifies the mixed business-level strategy, focused on cost leadership and differentiation (Porter, 2008). This combination allows reducing the risks of differentiation strategy, such as the ease of imitation and loss of value by making the market entrance and imitation more costly, based on the cost leadership of Chipolte.
The corporate-level, the organization is concerned with the long-term marketing decisions, which affect the entire organization. The Chipolte Annual Report (2015) outlines strong growth ambitions for 2016-2017 in terms of physical stores as well as incremental revenue,coming from investment activities in differentiated business models, such as Asian food and pizza. This serves as the evident for the expansion corporate-level strategy, where Chipotle actively adds products and services in already existing portfolio. This comes along with the value-creation strategy, where the company aims at edging out the competition and gaining larger market share by utilizing the economies of scope that it possesses in the domestic market (Porter, 2008).
Price proposition of the company is very lean, with the objective to generate profitable operation for the wide public. The company expects that the clients will be able to pay a little extra for the specificity of the food and the healthy profile of the menu. At the same time, Chipotle is a casual dining place, targeting middle and upper classes. This means that the pricing strategy should be accurate in a way to maintain loyal clientele with relatively high frequency. More specifically, it is possible to outline the approach to menu pricing as cost-plus pricing. This allows guaranteeing the profit, based on the price calculated on the basis of overhead costs.
Chipolte product is the specific Mexican menu, focusing on easy food, such as burritos, burrito bowls, salads, and tacos. The company aims at building the loyalty based on customer experience and value of healthy fast-food eating, as opposed to simple product. This experience includes the menu items, the positioning of the menu as well as the ambiance of the Chipotle restaurants. While competing in the mature market with a large number of local and chain competitors, the company brings unique proposition and brand image, which guarantees long-term customer relationships and trust.
Promotion strategy is critical for the companies, operating in the restaurant sector. Due to the reasonably low-medium bill, the organizations should focus operational efficiency on the elimination of waste and utilization of the seats. This means that marketing strategy should become a paramount tool to control these elements. Chipotle's core marketing strategy is based on word of mouth and its unique Come Back Plan. The strategy involves social media and special finalization mechanisms, such as expressing the love for burrito through haiku and special social campaigns. Additionally, the company produces a Web Series and other important creative marketing tools. Moreover, the company operates effective digital strategy, attracting and retaining the public through the utilization of Chipolte application and Sustainability elements, building on the “green customer” proposition (Wohl, 2016).
The final element of this analysis is the place. Chipolte is the restaurant business and the distribution channels of the product include in-house service in all the physical locations, delivery services, available through the phone and digital application and the catering service, which brings different format, but allows introducing the menu and increases the recognition of the brand (Kotler and Armstrong, 2010).
Positive Emotional Elements
Chipolte actively utilizes emotional marketing strategy, where the pillars of customers positive impression include, apart from traditional elements, such as quality and price of the food, such important subjective factors, as feeling of comfort in the special Chipotle ambience, feeling of belonging to the health-aware group, perception of superiority of the products, due to the focus on sustainable service and business, brought through the video and social media, such as the series "Back to the Start". Additionally, digital application and presence along with delivery service and diversification of the business in Asian food serve as the strong argument for the clients, who value quality and innovation in the restaurant sector. Chipotle tries to bring new items and tastes to its menu on the four-season basis, which constitutes an important influence factor on consumer positive image of the company (Sadler, 2003). All these elements played an important role in building my personal positive experience about the restaurant.
Negative Emotional Elements
While the overall experience was extremely positive, there are some elements of the service and product, which could be enhanced and improved. First of all, one of the important elements in evaluating the dining out experience is the presentation of the dish. It is possible to argue that the company does not place a lot of emphasis on the visual aspects of the dish. The focus on this visual identity could increase sales and make the experience more memorable. Secondly, the Mexican Food is very specific in the aspects of species ad strong ingredients. It would be beneficial if the menu offered the suggestions about how to make the taste milder and allow more flexibility in the choice of ingredients in the selected dish. Finally, there is a room for improvement with regards to the management fo the waiting and queue to the restaurant. There are numerous companies, which offer distance waiting list or utilize pre-order digital applications. By implementing this state-of-the-art technology could increase utilization and improve customer experience.
Physical Evidence
Chipolte ambiance offers traditional and simple layout and decoration. The focus on transparency of operations is seen through the application of such important elements of physical evidence as the open kitchen and the layout, which enables direct eye contact with the production process. The exposition of the food is always a part of the in-house experience, where this exposition always comes with textual elements, such as banners promoting the vision and mission, taking about food integrity and sustainability and other important aspects of emotional marketing.
Recommendations for Improvement
Chipotle is a strong brand, with customer-centered corporate strategy. It is possible to conclude that the organization offers high-quality service and product with strong brand identity. Some of the important considerations in the contemporary business environment are the costs of imperfections in an operational layout. Personal experience demonstrates that there is a room for improvement in the layout of the stores to ensure higher space utilization and reduction of the queue. Some of the possible solutions in this area include the reevaluation of the order setting, allowing for not only make-to-order approach but also playing some of the items fully prepared to be served at the cashiers. Secondly, the company should further focus on the waste reduction, which comes from wrongly served orders, time wasted in preparation and the lack of training. Finally, the company could further enhance the customer experience by personalizing and bringing more "coziness" in the ambiance and visual element of the dishes to make the "healthy and stylish" characteristic to be extended beyond the product, to the overall service. Additionally, the company builds its identity around the sustainability and integrity. While this message is widely transferred through the social and traditional media channels, Chipotle could benefit from placing the most visual advertisement in their physical locations and create higher public awareness through customer appreciation events, inviting them in-stores for specific contests, events, and teambuilding activities.
Conclusion
It is possible to argue that Chipotle is the extremely strong organization in terms of its corporate structure. With the alignment and standardization of the service and product across a large number of locations, the company manages to maintain full control over the franchise and own operations, including those, on the international market. One of the strongest sides of the business is the unique for the segment identity is the organization with Sustainability-driven strategy and effective cost management approach, creating the cost-leadership position on the market. With that in mind, brand management and marketing strategies outline the most critical strengths of Chipolte. Some weaknesses include the lack of focus on waste management and the potential improvement in HR practices to ensure better training and emergency management among the regular level employees. Additionally, the lack of focus on physical evidence can also result in the loss of customer identity for the in-house business and give space to the competitors.
References
Sadler Ph (2003). Strategic Management. 2nd Edition. London: Kogan Page Limited
Chipolte (2015). Chipotle Mexican Grill Annual Report 2015. Chipotle Corporate Website. Retrieved 29 July 2016, http://www.annualreports.com/Click/7950
Wohl, J. (2016). Chipotle's Comeback Plan: Company-Wide Meeting and Marketing. Advertising Age [Online]. Retrieved 29 July 2016, http://adage.com/article/cmo-strategy/chipotle-s-comeback-plan-company-wide-meeting-marketing/302134/
Kotler PH.and Armstrong G. (2010). Principles of Marketing. London: Prentice Hall Publishing.
Porter, M. (2008). Competitive Advantage. Creating a Sustainable Superior Performance. Berlin: Simon and Schuster.
