Innovation: The Recipe for Chipotle's Success

Innovation: The Recipe for Chipotle's Success
Case Code: BSTR527
Case Length: 14 Pages
Period: 2001-2017
Pub Date: 2018
Teaching Note: Available
Price: Rs.400
Organization: Chipotle Mexican Grill Inc.
Industry: Restaurant
Countries: US
Themes: Strategic Management
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Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

This case discusses the innovative strategies adopted by one of the leading fast casual restaurants in US, Chipotle Mexican Grill, Inc. Chipotle adopted an innovative strategy called ‘Food with Integrity’ where the ingredients are sourced naturally from local farmers and meat is sourced from animals which are naturally grown in open fields. Chipotle leveraged the sustainability in food as its unique selling factor to replace the homemade food for the busy professionals and promoted the importance of healthy food through unconventional advertising practices like short films and web series.

However Chipotle was in trouble and was reeling from lost sales after a food safety crisis that sickened 60 people with E. coli across 14 states in the US in 2015. Moreover the data hacking scandal further dented the image of the company. Thereafter, Steve Ells took full control of the restaurant chain and implemented a multi-pronged turnaround plan aimed at luring customers back to its restaurants. The case highlights the importance of innovation to survive in the high competition of an industry and achieving customer loyalty by maintaining consistent quality of production through commitment to the company’s core policy like Chipotle adhered to its core policy of ‘Food with integrity’ even in tough times. The challenge before Steve Ells, CEO of Chipotle is to create a fair food system, regain the trust of American customers and increase sales.

Issues

The case is structured to achieve the following teaching objectives:

  • Identify the challenges faced by Chipotle and explore strategies that the company might adopt to overcome them
  • Evaluate Chipotle’s business model, and understand the reasons behind the fast food chain’s success. Understand the issues and challenges related to Chipotle’s business model
  • Study how innovative business models help companies grow and gain competitive advantage
  • Study how innovation drives competitiveness in achieving low cost
  • Understand various concepts like disruptive innovation, sharing economy, and business model innovation
  • Identify the role of entrepreneurs in any industry and the challenges they face while conducting a sustainable business like Chipotle

Contents

Keywords

Chipotle,Innovation,Fast casual restaurants,Food with Integrity,Sustainable practices,Competitive advantage,Innovative promotion,Four-Box Business Model

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