While the fast casual segment of the restaurant industry is the smallest it also is the fastest growing with an 11 percent growth rate between 2007 and 2011 (Pearce & Robinson, 2014, p.g. 18-3). Chipotle Mexican Grill (CMG) quickly became the front-runner in the fast casual dining industry by going against the traditional ideology of its competitors. Reduced prices, easily prepared menu items, and streamlined operational management have been the customary business strategy for the fast food industry. Instead CMG has challenged these dominant industry trends by focusing its mission on sustainable food sources, investing in a quality workforce, and avoiding franchising.
Food With Integrity is CMG’s commitment to changing traditional fast food …show more content…
While not having to deal with pressure from franchisees related to increased food costs and unstable economics that is inherent to being committed to sustainable ingredients, CMG is missing out on the increased capital and expedited expansion that franchising offers.
Analysis of Problems:
Rising food cost and the commitment to organically sustainable food is pressuring CMG to operate under constantly changing price structures and its lack of growth within a booming segment of the restaurant industry alleviates barriers for competitors to enter the industry successfully.
Due to its commitment to natural, organic, and locally sourced raw materials, CMG is not offered the price security other national and regional restaurant chains receive. CMG’s competitors are able to negotiate with its suppliers to ensure competitive prices (Pearce & Robinson, 2014, p.g. 102). Since CMG strictly adheres to a more specialized supply chain, it is not afforded the luxury of stable food costs or even food supply (Pearce & Robinson, 2014, p.g.118). CMG’s dilemma of having above-average food costs can steer potential customers into the arms of its competitors if it decides it should increase its menu prices or veer from its promise to only use sustainable food …show more content…
200). Since CMG stressing locally sourced food above all else, it attempts to build a loyal customer base. CMG’s main target segment is millennials that believe in and identify with its Food with Integrity philosophy. Millennials represent a key segment for quick service and fast casual restaurants because 57% of young adults from 18 to 29 say they eat fast food at least weekly, the most often out of all consumer groups (Haden, 2014). Since CMG resonates with consumers who are interested in socially sustainable foods, these customers tend to be wealthier and less price-sensitive, than typical fast food customers (Haden, 2014). This largely contrasts quick service restaurants like McDonald’s that primarily serve families and teenagers and would not be able to absorb price increases on menu
Food With Integrity is CMG’s commitment to changing traditional fast food …show more content…
While not having to deal with pressure from franchisees related to increased food costs and unstable economics that is inherent to being committed to sustainable ingredients, CMG is missing out on the increased capital and expedited expansion that franchising offers.
Analysis of Problems:
Rising food cost and the commitment to organically sustainable food is pressuring CMG to operate under constantly changing price structures and its lack of growth within a booming segment of the restaurant industry alleviates barriers for competitors to enter the industry successfully.
Due to its commitment to natural, organic, and locally sourced raw materials, CMG is not offered the price security other national and regional restaurant chains receive. CMG’s competitors are able to negotiate with its suppliers to ensure competitive prices (Pearce & Robinson, 2014, p.g. 102). Since CMG strictly adheres to a more specialized supply chain, it is not afforded the luxury of stable food costs or even food supply (Pearce & Robinson, 2014, p.g.118). CMG’s dilemma of having above-average food costs can steer potential customers into the arms of its competitors if it decides it should increase its menu prices or veer from its promise to only use sustainable food …show more content…
200). Since CMG stressing locally sourced food above all else, it attempts to build a loyal customer base. CMG’s main target segment is millennials that believe in and identify with its Food with Integrity philosophy. Millennials represent a key segment for quick service and fast casual restaurants because 57% of young adults from 18 to 29 say they eat fast food at least weekly, the most often out of all consumer groups (Haden, 2014). Since CMG resonates with consumers who are interested in socially sustainable foods, these customers tend to be wealthier and less price-sensitive, than typical fast food customers (Haden, 2014). This largely contrasts quick service restaurants like McDonald’s that primarily serve families and teenagers and would not be able to absorb price increases on menu