Chipotle

  • gap-china476A corporate strategy article by Thunderbird students Manya Andrews Dotson, Wes Herche, Brie Lam, William Randle and Jonathan Walters

    Abstract: Can a cut and paste application of the Chipotle strategy lead to another runaway restaurant success in an industry rife with pressures on profitability? Was it the business model that fueled Chipotle’s meteoric rise? Or was it that CEO Steve Ells took a food we already knew and loved, the burrito, and made it taste even better? Or, are the two inseparable? Will replicating Chipotle’s strategy yield another blue ocean success story?

    The foodie blogs are abuzz … a new naked light bulb has been lit in a stainless steel restaurant in Washington DC’s Dupont Circle. Firmly planted in a neighborhood where restaurants such as Panera Bread, Cosi and Starbucks dot the grid, it fights for purchase in a bloody — if tasty — battle for the upscale business lunch crowd fed up with traditional fa(s)t food (though, there’s some of that around there too). It boasts artisanal tofu, farm fresh ingredients, and free-range meats charred to medium-rare perfection right under the customer’s nose. It would be hard to believe that an Asian restaurant this good could be using the same playbook as the blazing burrito chain, Chipotle.

  • chipotle1By Matthew Blong, Richard Kim, Rebecca Knowles, Wei Li, Eri Miyagi and Ryan Scalise

    Stephen Lindner’s eyes lit up as he pulled a hefty burrito wrapped in foil out of a brown bag covered with the catch phrases “I think about Chipotle every time my stomach growls” and “one delicious bite left in the bottom!

    When asked what he liked so much about Chipotle, the graduate student at Thunderbird School of Global Management in Glendale, AZ – famished as he began to devour his burrito – immediately responded, “because it tastes good!”

    Without knowing it, Lindner exemplifies the effect that Chipotle’s strategic advantage has on its customers.  Namely, that Chipotle tastes great because it serves classic Mexican entrees made from organic and locally sourced meats and produce, all under the banner of the company’s motto, “Food with Integrity.”  And like Lindner, few Chipotle customers realize that good taste is, in fact, a direct result of organic ingredients.