Case Analysis – Chipotle Mexican Grill’s Strategy

Case Analysis – Chipotle Mexican Grill’s Strategy

Factors That Contributed To the Loss of Confidence in the Chipotle Brand

The downfall of Chipotle’s brand started in 2008 when a man called Chris Collins was discovered to be bearing food born illness. Collins had complained of excruciating pain in his stomach alongside bloody diarrhea. As a result, bacteria called E-coli were detected in Collins, and several other cases broke out in numerous Chipotle restaurants. Chipotle could not locate the source of the problem and ended up closing 43 of its restaurants. Even though the restaurants were reopened later after thorough investigations from the Federal Drug Administration, the confidence in Chipotle’s brand customers had declined (Assenza & Lewis, 2019). Thus, the primary factor behind the decline in confidence in Chipotle’s brand was the outbreak of E-coli bacteria across its outlets.

The Question of Whether the Current Actions Present a Strategy That Would Improve Consumer Trust

Yes, the actions taken to date present a strategy to improve consumer trust. Notably, this is so because the breakout of bacteria across the brand’s restaurant promoted a need for a better strategy for the brand. Chipotle made significant actions that have greatly impacted consumers’ eyes, such as replacing the CEO, training employees on the best ways of cleaning and handling food, and realigning the procedure of purchasing products. Essentially, this move indicates an effort by the company to ensure that the unfortunate event does not occur again, winning the trust of consumers and stakeholders.

A Look at Chipotle’s Competitors

Chipotle has several competitors in the industry. Its primary competitors include Qdoba Mexican Eats, Moe’s, and Southwest Grill. Chipotle’s internal environment is comparable to that of its competitor, Moe’s Southwest Grill. One aspect of the internal environment to compare entails the internal controls for ensuring that the safety of the food products being handled and served is maintained. Both restaurants have procedures for ensuring that high quality food is maintained for customers. However, Chipotle’s quality controls are more sophisticated than Moe’s Southwest Grill. Chipotle conducts DNA testing for all farm produce received to ensure that potential issues are detected and resolved at the initial stages. Essentially, this is an extra mile that Chipotle takes to portray a better internal environment than Moe’s Southwest Grill.

Based on the above internal environment analysis, there is a high probability that a better internal environment will result in a competitive advantage. Notably, this is so because the efforts taken by Chipotle will continue winning consumer trust in the short run. In the long run, the customers will demonstrate loyalty to the brand, making the competitive advantage sustainable. According to Arsawan et al. (2022), a brand’s uniqueness is essential to gaining and sustaining a competitive advantage. Therefore, the uniqueness of Chipotle’s internal environment could help it gain and sustain a competitive advantage.

Additional Recommendations for Gaining Consumer Trust and Reclaiming a Leadership Role in the Fast-Food Industry

Various recommendations are made to help Chipotle gain consumer trust and reclaim its leadership role in the fast-food industry. First, Chipotle should install proper internal processes to ensure product quality standards remain high. Notably, this will ensure that an event such as the one that made consumers lose trust in the brand does not recur. By avoiding such instances, its leadership role in the industry will be reclaimed over time as more consumers will trust the brand. Second, Chipotle should train employees on the importance of quality food and proper hygiene across all its outlets. Essentially, this will ensure that an event of bacteria will not occur again. Lastly, Chipotle should ensure that focused and strategic individuals drive the leadership roles of the brand. Notably, this is so because leadership roles are responsible for the brand’s strategic direction.

Suggested Business Strategy

Chipotle should consider a marketing plan as its business strategy. The marketing plan should focus more on social media marketing by employing a variety of platforms such as Facebook, Twitter, and Instagram. Further, the marketing plan should include a promotion effort. All the marketing messages undertaken by Chipotle should convey their commitment to quality standards to ensure that the loss of confidence among consumers experienced in the past is avoided going into the future.

References

Arsawan, I. W. E., Koval, V., Rajiani, I., Rustiarini, N. W., Supartha, W. G., & Suryantini, N. P. S. (2022). Leveraging knowledge sharing and innovation culture into SMEs sustainable competitive advantage. International journal of productivity and performance management, 71(2), 405-428.

Assenza, P., & Lewis, M. S. (2019). Can Chipotle compete by delivering “food with Integrity”? The CASE Journal, 15(4), 233-252.

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Read “Case 12: Chipotle Mexican Grill’s Strategy in 2018: Will the New CEO Be Able to Rebuild Customer Trust and Revive Sales Growth?” in your Connect textbook.

Write a 350- to 700-word response that addresses the following questions:

What factors contributed to the loss of confidence in the Chipotle brand?

Do the actions taken to date present a strategy that would improve consumer trust? Why or why not?

Consider Chipotle’s competitors. How does Chipotle’s internal environment compare to the internal environment of one of its competitors? Based on this analysis, what is the probability that the strategic moves implemented by Chipotle would lead to a sustainable competitive advantage? Explain.

What additional recommendations would you make for Chipotle to gain consumer trust and reclaim a leadership role in the fast-food industry? Provide justification for your response.

Based on the information presented in this case study, what kind of business strategy would you suggest to help Chipotle achieve a competitive advantage?