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BUOL 533 – Marketing Management
University of Cumberlands
10/31/19
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Introduction
The purpose of this paper is to conduct a case study analysis on Chipotle Mexican Grill.
This case analysis will cover an introduction, along with Chipotle’s policy of local sourcing,
Chipotle’s model for operations and processes, demonstrating and communicating a commitment
to safety, Chipotle rebuilding trust, Chipotle’s competition, Chipotle’s internet response, as well
as a conclusion.
Chipotle is one of the leading Mexican food chain restaurants in the country. The first
Chipotle restaurant was opened in 1993 in Denver, Colorado by Steve Ells. Steve Ells who is a
classically trained chef seen the potential of what Chipotle Mexican Grill could be. As Chipotle
began to grow Ells decided to add five more store locations in Denver. Ells was not the only one
who understood the potential of Chipotle. In 1998 McDonald’s Corporation purchased a
minority stake in the company. Chipotle had grown to 14 stores and by the next year
McDonald’s purchased majority control over the company. Chipotle continued to grow and
McDonald’s continued to invest. McDonald’s fell in love with Chipotle’s concept and in 2006
McDonald’s spun off Chipotle in an IPO on the New York Stock Exchange. On March 31, 2016,
there were 2,066 Chipotle stores worldwide, the vast majority of these locations were in the
United States. Chipotle’s business model was defined by five elements. These elements included
a sample menu, high-quality fresh ingredients, fast, personalized food, no franchises, and
committed employees (Walker & Merkley, 2017).
Even though Chipotle has had much success in 2015 the company was revealed as the
source of multiple outbreaks of illness from norovirus, salmonella, and E. coli that sickened
nearly 600 people in 13 states. The CDC which is the Centers for Disease Control and
Prevention and other health organizations investigated the outbreak. Chipotle suffered and had to
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close several of its stores in 2016 and made numerous changes to its food sourcing and
preparation practices. Chipotle tried to win back its customers with increasing its advertising and
free food promotions. Chipotle announced its first quarterly loss after the incident. The same
store sales for the first quarter were 29.7% lower than the previous year and the operating
margins fell from 27.5% to 6.8% over the same period. The company’s share price also went
down 41% from its summer in 2015 (Walker & Merkley, 2017).
Chipotle’s Policy of Local Sourcing
Chipotle has always been known for using fresh high-quality local ingredients. In 2001
the company adopted the slogan and tag line “food with integrity”. This described the companies
approach to both sourcing and preparing the ingredients. All of the food was prepared on site
from raw ingredients and was sourced from producers that used sustainable, humane practices.
