CASE 18
Chipotle Mexican Grill, Inc.:
The International Challenge
TEACHING NOTE
■ SYNOPSIS ■
The case is an extension of Case 10, “Chipotle Mexican Grill, Inc.: Disrupting the Fast Food Business.”
The earlier case should be read as a background to the current case which deals exclusively with
Chipotle’s international expansion. However, students who are familiar with the company (presumably
US-based students), will probably have sufficient knowledge to discuss the case without reading Case 10.
If overseas opportunities are attractive to Chipotle, how should the company adapt its US strategy
and organizational model to meet the circumstances of foreign markets, and what mode of entry
should it adopt?
■ TEACHING OBJECTIVES ■
Reading and discussing this case allows students to gain expertise in analyzing fundamental issues in
international expansion, namely:
■ POSITION IN THE COURSE ■
I use the case in the part of my strategy course that addresses international and global strategies.
industries.
■ ASSIGNMENT QUESTIONS ■
1. Do overseas markets offer attractive growth opportunities for Chipotle?
2. If so, should Chipotle replicate its US strategy in overseas markets, or does it need to adjust to
■ READING ■
R. M. Grant, Contemporary Strategy Analysis (9th edn.) Wiley, 2016, Chapter 12, “Global strategy and
the Multinational Corporation,” especially the section on “Internationalization Decisions: Entering a
Foreign Market” (pp. 322-324).
■ CASE DISCUSSION AND ANALYSIS ■
Do overseas markets offer attractive growth opportunities for Chipotle??
Is there market demand for Chipotle’s offerings?
Fast food seems to have a similar appeal in non-US markets as it does in the US. For other US fast food
chains, international expansion has been the primary source of growth once US market saturation was
reached. As Table 1 shows, McDonalds, KFC, and Dominos all have more non-US than US outlets. In
addition, most countries have home-grown fast food businesses, some of which are local imitations of US
Apart from cuisine, are other dimensions of Chipotle’s offering attractive? Chipotle’s emphasis on
organic, sustainably grown, responsibly raised foods is likely to appeal in Europe, but less so in Asia.
However, in Europe, a large number of competing restaurant outlets offer these attributes.
Can Chipotle recreate in overseas markets the resources and capabilities that make it so successful in
the US?
Chipotle’s competitive advantage in the US rests upon:
• Efficiency, Chipotle’s restaurant design and operating system allows levels of productivity that lead
the industry—notably in terms of labor productivity and asset productivity.
These competitive advantages are achieved through a system that comprises several resources—notably
the Chipotle brand and the entrepreneurial leadership of founder Steve Ells—and a number of
capabilities: notably in sourcing, product design, operations, marketing, and human resource
management.
There seems no reason why these same resources and capabilities cannot be replicated in overseas
Adapting Chipotle’s US strategy to overseas markets
Differences between US and overseas markets suggest that Chipotle cannot simply replicate its US
strategy. To begin Mexican cuisine forms tiny share of the restaurant market outside North America and
In terms of locations, key considerations include:
• Countries/cities with diverse culinary tastes.