Introduction

Chipotle Mexican Grill is an established brand famous for its quality food. The company offers
salads, tacos, and burritos prepared from natural organic and natural vegetables and meat-free of
hormonal injections. The company was established in 1993 by Steve Ella in Denver, Colorado. According
to Ang et al.,(2021) the company's mission statement is "Food With Integrity," which enables the
company to offer food prepared from organic ingredients and then served in a dinner setting. The
company operates in over 1100 locations. The project analyzes the business model considered by
Chipotle Mexican Grill, putting into consideration the resources and capabilities, target market,
customer value proposition, and revenue model of the company. The project also provides strategic and
tactical suggestions for the company to achieve its innovation.

Business Model Chipotle Mexican Grill

The business model of Chipotle focuses on offering an enhanced food experience in all the
outlets. The outlet brings together efficient services, a clean environment for clients, the convenience of
service, and aspects of fine dining. Such a hybrid experience resonates with the consumers visiting
Chipotle's outlets. The company's business philosophy runs against the standard norms of the fast food
industry. The company's business model helps it attain an increased throughput rate. Data from the
outlet indicates that the company serves approximately 300 clients in an hour. In return, the company
makes over $million in revenue (Ang et al., 2021). The system considered in the outlets is set up like
assembly lines to meet high efficiencies. The outlet also considers the division of labor among the
employees, lowering the variability and streamlining processes. The store also considers a consistent
set-up in all the restaurants to ensure that the service levels are the same in all the outlets.

The outlet also sources all its ingredients, and all its offerings are fresh. The company firmly
believes that consumers can identify new products from those that are not fresh. The decision to offer
fresh foods is seen in the premium pricing considered by the company. The company does not run
promotions; all items run on the total price ( Manoharan et al.,2021). This approach is uncommon
because Chipotle's competitors, such as Taco Bell, offer their clients affordable foods that revolve
around a single dollar. Premium pricing by Chipotle has generated an image of making the consumers
pay for quality food, a healthier food outlet, and a picture of a high-end restaurant ( Ang et al., 2021).
The menu is also very focused and straightforward; the company does not serve products such as
cookies and coffee because they do not align with the dining experience of the company. The fast food
industry has been on the line for paying low wages to its employees ( Madhani, 2021). However, this has
not been the case with Chipotle, as the company pays its employees well. This has resulted in the
development of a review system that is rigid. The company does not tolerate low performance, which
can be seen from the high employee and customer approval rate ( Ang et al., 2021). The business model
by Chipotle requires that the employees have high levels of energy and show commitment to ensuring
food safety and offering outstanding customer service. Employees who are unable to match these
standards their services are terminated ( Abwanzo, 2017). The chain pays most of the clients hourly,
ensuring the employees' income security. The income security has seen the chain attract better
employees and new talents, which has dramatically influenced the restaurant chains' commitment to
providing the best foods to the customers. The business model considered by the company leverages
the outlet's operating features, such as high-quality food and fast-moving line, to drive the brand. The
business model assumed by the company has expanded to over 1,700 places and has more than 40,000
workers. The company has been ranked as the leading chain restaurant in Mexico.

Resources and Capabilities

Chain restaurants have both tangible and intangible resources. In this case, tangible resources
consider resources that have a physical nature and can be pointed out quickly in an organization.
Furthermore, tangible resources can be accessed from the market. Land is a tangible resource for the
chain restaurant. Land encompasses all the rented and owned spaces by the company for the aim of
production and as well as warehousing purposes. This also includes all the rented and owned areas used
for packaging purposes. The chain restaurant also owns the equipment used for packaging and
production purposes. An extension of equipment by the company includes all the technological
advancements used in the production line (Manoharan et al.,2021). All the raw materials used by the
chain restaurant are also tangible resources. These raw materials are accessed from the local farmers
indicating that all raw materials used are fresh. Chipotle committed to using non-GMO resources, which
has been a massive step in ensuring sustainability and protecting the consumers' health. The raw
materials from the local farmers include soybeans, garlic, black pepper, rice, beans, bay leaf, kosher salt,
and citrus juice. Aside from the tangible resources used in the process of food production ( Madhani,
2021). Other resources are used for sales, design, shipping, and advertisement ( Ang et al., 2021). Some
of the company's outstanding resources include trees used to create wood, oil, plastic, metal, and paper.
The chain restaurant also considers its facilities as tangible resources. The facilities encompass the
offices, warehouses, and production units which help streamline the operations and processes of the
company (Abwanzo, 2017). Other facilities that belong to the company include the interior of buildings
and interior designs created to maintain brand image and optimize performance.

Chipotle also has intangible resources, which include all the resources that lack physical value.
The intangible resources offer a competitive edge that the competitors lack. Brand reputation is an
example of an intangible resource owned by the company ( Madhani, 2021). The company works hard to
provide its consumers with high-quality products, which has helped the company earn trust over the
years. Chipotle also considers its intellectual property as an intangible resource. The intellectual
property and trademark for Chipotle include the following phrases "Chipotle," "Shophouse," "Fresh Is
Not Enough Anymore," "Food with Integrity," "Unburritable," and "Chipotle Mexican Grill” ( Manoharan
et al.,2021). The intellectual property has helped ensure the chain restaurants of novelty and protects
the unique product blend of the company ( Ang et al., 2021). Chipotle Mexican Grill is successful in its
businesses and operations and has a considerable following. The chain restaurants' trade secrets, such
as having a secret recipe, have helped the company compete with other restaurants and maintain its
competitive edge.

There are several capabilities that Chipotle has been able to use to meet its set goals and
objectives. As stated by Manoharan et al..(2021) Chipotle has been able to differentiate itself from other
restaurants, which can be seen from the quality food offered by the company at reasonable prices.
Serving quality food at affordable prices has been vital in ensuring that consumers enjoy wholesome
meals with great value. The restaurant only serves meat raised within the established criteria, focusing
on promoting animal welfare and improving sustainability. The restaurant brands its meat as
Responsibly Raised. The restaurant highly considers responsibly grown foods, which means purchasing
from suppliers who conform to the food integrity policy of the company ( Abwanzo, 2017). The
company's supply chain of the company s also effective, ensuring that the raw materials reach on time
to prepare fresh foods. The company s ability to run a successful business with a culture of people
accountable (Ang et al., 2021). The company also sustains world-class employee experience by retaining
and developing talents at every level. The company has used its digital platform to drive its strategic
growth. In recent years, the company has upgraded its capabilities, which has seen the company digitize
most of its kitchens and expand its partnerships. The company has also invested in human capital and
employed over 90,000 people worldwide ( Madhani, 2021). The company hires world-class employees
dedicated to supporting future goals and working together with other partners to create a consumer
base positively. The company is rooted in values and focuses on cultivating a better environment that
extends beyond nutritious food through natural ingredients. The company has also developed talent
partnerships to amplify vision and purpose for people and also foster talent curation. The company's
value proposition engages its team members and community through partnerships. The company
internally works with employees enrolled in its degree programs that are debt free. The company also
focuses on the employees' mental, physical and financial wellness. Chipotle's commitment to pay equity
is seen in its compensation packages and other offerings such as hourly wages, eligible crew members,
and an expanded debt-free program that offers employees access to degrees.

Target Market

The ideal target market for Chipotle is millennial professionals and college students. Most
people in this group view cooking as a hobby and prefer making most of their meals using healthy and
fresh foods. This is because of increased awareness of the importance of eating healthy. When pressed
with what is typical for the target market, they seek an alternative food source ( Abwanzo, 2017). Most
of them do not consider visiting Wendy's or Mcdonald's because of the health risks associated with food
from these outlets. Instead, they consider restaurants such as Chipotle, which offer authentic food.
Chipotle provides them with healthy food; thus, they do not have to sacrifice their diet for just a meal
(Madhani, 2021). These people have a disposable income and are well familiar with the concept of
balanced diets. Focusing on this market will allow Chipotle to gain consumers who believe in "Food with
Integrity ."Therefore, the target market for Chipotle is not interested in contemporary fast foods but is
looking for an inexpensive fast that has value for the price. A fresh atmosphere and fresh food are vital
in drawing the target market.

Customer Value Proposition

Chipotle Mexican Grill was created from the belief that a connection exists between how food is
prepared and raised. The company's mission is to offer its clients "Food With Integrity ."This shows that
the company has a high focus and uniqueness in its activities. Chipotle is a unique brand that
differentiates itself from other fast food outlets worldwide. The preparation methods considered by the
company indicate that the company values its consumers and their well-being. As ascertained by
Madhani (2021) the company is aware of the impact of the ingredients and their effect on the well-being
of the clients it serves. This shows the commitment of the company to using natural and genuine
ingredients. Regarding its offerings, the company is the most trusted outlet, bringing a balance to the
food industry. Chipotle Mexican Grill allows the clients to consider their options and preferences in all
the offerings. All the customers need to do is specify and order the level of customization that meets
their needs. This indicates that there is no limitation for the clients and that the chain restaurant never
compromises on the choices and preferences of the clients. The employees at the company their time
preparing food on-site; however, the customers can get the food in seconds. The customers can choose
what they want by communicating directly with the staff. The restaurant's layout has a natural flow,
including the serving line design and the floor plan, to make the entire process efficient and intuitive
from the point of order to the food being served. The company accepts orders from clients through an
online ordering application on iPhone phones or fax ( Ang et al., 2021). The company has emphasized
speed without interfering with the interactions between the employees and the customers. The
flexibility to corporate the clients' wishes is outstanding, and this helps the company to go beyond the
customers' expectations. The company's core values are committed to using the best ingredients. The
outlet has proven to be a reliable outlet for students and Millenials looking for a reliable, quick food
outlet that offers healthy and affordable meals at affordable and reasonable prices. The ever-changing
and reliable menu has attracted consumers of all ages focused on enjoying a quiet meal.

Revenue Mode for Chipotle

The revenue model for Chipotle Mexican Grill is transaction-based. The model is where a
business generates revenue from selling multiple and single products to the target market. The company
makes most of its revenue through its outlets. The company serves casual Mexican food, including
bowls, tacos, and burritos, to name a few. The company operates 44 global locations and 2918 domestic
locations (Madhani, 2021). The company has a single segment that is divided across eight regions. The
digital sales program has seen the company deliver food to clients through partnerships with companies
such as Uber. Digital sales spurred during the Covid-19 pandemic ( Ang et al., 2021). The company also
sells gift cards with no expiry date, and no non-usage fees are deducted. The company generates
revenue from the gift cards when the customer redeems the gift card.

Strategic Advice

There are several ways through which the company can improve its service delivery and meet the needs
of the consumers. Below are several recommendations that Chipotle Mexican Grill can consider:

1. Establish a culture of top performance among the employees- The Company should focus more
on empowering, hiring, and identifying top-performing employees. Chipotle Mexican Grill
should show a commitment is developing a performance-based culture in all of its outlets to
achieve an all-around best experience for all the customers and employees. This culture can be
maintained by ensuring that the right people are hired. Efforts should be made to ensure that all
the hired employees share a passion for food.
 2. Uphold the importance of culture and methods- Despite its labor-intensive approaches to food
preparation, the company should focus on creating menus that generate efficiencies, ensuring
that the company is always able to serve high-quality food using unique and natural ingredients.
3. Maintaining close relationships with the suppliers- The company should always keep close
relations. Chipotle Mexican Grill should ensure that it carefully chooses suppliers based on the
restaurant's mission and quality. The restaurant should work closely with the suppliers. The
company should also seek to increase suppliers to help deal with supply shortages and pricing
volatility.
4. Marketing- Chipotle Mexican Grill should ensure its communications align with the customers'
experiences. The promotional and advertising programs should present the consistency of the
company's communications. The company's advertising strategies should go beyond radio ads,
transit, outdoor, and printed media. Instead, the company should focus on embracing digital
marketing approaches. There is a need to evolve the company's marketing approach to ensure it
aligns with the modern-day needs of businesses.
5. The competition-The company competes with regional and national causal dining, quick-service,
and fast-casual restaurants. The company's competition also arises from in-store cades, deli
sections, and locally owned restaurants. The company should position itself in a continuous
growth mode in the new and existing markets. The company should focus on delivering food
prepared using fresh ingredients and remain committed to its "Food With Integrity" philosophy.
6. Restaurant site selection- In site selection, the company should ensure that it studies the
neighboring locations, business information on the identified area and demographics, and the
available information on the competitors.

Tactical Suggestions

1. The company should tap into the global markets by opening places in Italy, France, Britain, and
emerging markets in Kenya and Nigeria.
2. Ensure that consumers have efficient and open lines of communication to air their grievances
and provide feedback on services.
3. Introduce healthy beverages to attract more customers.
4. Carry out visits to different outlets to ensure that the rules, regulations, and standards are
followed.
5. Expand and diversify the menu to maintain a competitive edge.

Conclusion

The report shows that the business model of Chipotle Mexican Grill focuses on providing an
enhanced food experience in its outlets. The model focuses on improving its products' value through
fresh ingredients. The model also works to ensure that the employees are productive. This model also
helps the company to utilize a simple and focused menu. The tangible and intangible resources at the
company have been instrumental to its success. The tangible resources include but are not limited to
land, property, equipment, and inventory. On the other hand, intangible resources include brand
identity, intellectual property and trademarks, and brand reputation, to name a few. Considering its
capabilities, the company has been able to differentiate itself from competitors by offering quality food
and using Responsibly Raised meat. On the capabilities, the restaurant invests in employee retraining.
The target market for the company is college students and working millennials due to their increased
knowledge of the need to eat healthy foods. The company's customer value proposition is embedded in
its philosophy, "Food With Integrity. The philosophy helps Chipotle to focus on being unique and
differentiating itself from contemporary fast food restaurants. The revenue model for Chipotle is the
transaction-based revenue model that allows the business to generate revenue from selling single food
products to the target market.

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