Introduction Chipotle Mexican Grill (CMG) was found in 1993 with a mission to service good quality food with inputs sourced using sustainable farming practices. Since its IPO in 2006 it has been attractive to investors due to fast growth and sizeable profit margins. However, in 2012, faced with domestic competition, rising food cost, and a slowdown in key performance metrics, with additional negative remark from a hedge fund manager, its stock price declined sharply. In this case study, CMG’s business strategy and its core competencies are discussed. Also, recommendations on how it can use international strategy and cooperative strategy, as well as how it can use corporate governance as a source of competitive advantage are included.
CMG revenue topped $4.5 billion in 2015. In addition, CMG netted near 10 percent growth in 2015 and revenues are projected to increase 3.1 percent in 2016. Although CMG does not pay cash dividends, 2016 earnings per share (EPS) is expected to yield 12.78, which would fall below the 2015 EPS of 15.10 (Standard & Poor’s, 2016). Among peer restaurants, CMG stock Beta holds at .48, which indicates the stock is less volatile (Standard & Poor’s, 2016). Specifically, the stock price fell to $404.26 during the E.coli outbreak in 2015 and current stock price closed at $473 March 23, 2016 (Google Finance, 2016).
“The strict rules at fast-food restaurants help to create food that always tastes the same. They help workers fill orders quickly.” (McJobs by Eric Schlosser and Charles Wilson) This supports my claim because it shows how fast food is inexpensive and consistent. This means that people that don’t have the money to go to the grocery store every week can put food on the table for their families that always tastes the same. Finally, the following quote shows that the fast food industry provides jobs for uneducated people. “When all the knowledge is built into the operating system and the machines in the kitchen, a restaurant no longer needs skilled workers.” (McJobs by Eric Schlosser and Charles Wilson) This supports my claim because it shows how the fast food industry provides jobs for uneducated people.
He believes that this explains why many of the Americans today are overweight. In Bittman’s article he mentions that he frequently reads confident statements as to “it’s more affordable to feed a family of four at McDonalds than to cook a healthy meal at home”. He proves his point by giving an example that ordering from McDonalds for a family of 4 can come to an estimated total of $28, this includes two Big Macs, a cheeseburger, six chicken McNuggets, two medium and two small fries and two medium and two small sodas. He believes that if you cook at home you will spend less that $28 dollars for feeding a family of four. Cooking a meal at home like
The owners were able to purchase and renovate the food truck utilizing savings. Given that the Bread Head on Wheels operates from a food truck the company does not pay rent on a full time kitchen. Their fixed monthly costs are insurance for the food truck, and a $1,500 monthly co-op fee, that goes to monthly use of a professional kitchen that the company utilizes for prep work, storage and the cleaning of tools used daily. The co-op fee is low because the space is utilized by 8 food trucks in the area. The first eight months that Bread Head on Wheels were in operation were extremely difficult, but the last eight months have been better and the company has been able to generate profits that have exceeded their plans by 20 %, enabling the company to pay down the debt accrued during the first eight months and hire the part time employee.
STRATEGIC MANAGEMENT CASE STUDY: MCDONALD’S CORPORATION 1. INTRODUCTION McDonald’s Corporation is the world’s leading fast food restaurant chain with more than 34,000 local restaurants serving approximately 69 million people in 119 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local franchisees. Its revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants (McDonald’s, n.d.). The organization view themselves primarily as a franchisor and believe franchising is important to delivering great customer experiences and driving profitability.
Additionally, the company also added 48 new restaurants in the quarter, bringing its total count to 1,878. Additionally, the company is promoting healthy food by excluding GMO items. According to a press release from Chipotle: “The strength of our business is the product of our unique food culture and unique people culture, and we constantly find ways to improve, and overcome challenges we encounter-whether that means non-GMO ingredients, adding new pork suppliers to ensure food with integrity, or reinventing the way tortillas are made at
Food waste is harmful both financially and environmentally. 40% of American’s food never goes to table, which cost 105 billion in the economy, the number for global is 750 billion. For environmental perspective, methane gas is 20 or 25 times stronger than carbon dioxide, which cut back on the global warming.
Introduction The restaurant industry in the United States had annual sales of $ 631.8 billion and employs 12.9 million people in 2012. Even in times of recession there is little evidence that this industry has seen a decline especially in its fast food and quick service segment. But with a depressed economy with no immediate upward trend in the near future, majority of the customers indicated that they would either curtail their spending on eating or best maintain its current level which is certainly going to affect the future of many restaurants in the industry. Chipotle is part of the fast casual segment of the U.S industry with over 1,600 restaurants. Chipotle Mexican Grill was founded by Steve Ells in 1993 and had its first restaurant
The age factor used by the target market of McDonalds is a family with dual income that does not have the time to prepare their food for their children, the workers who are having lunch and teens. Besides that, according to Schroder and McEachern (2005), global target market fast-food industry account for 79 percent is at age 17-25. The income factor used by McDonald target customers are upper-middle and lower income consumers. The Mac value offered by McDonalds will attract lower class customers to upper-middle customers. McDonald 's lunch meal RM5.95 has improved the product as it is attractive to upper-middle and even lower customers.