INTRO PAGE-Alvin Swarup

Authors: Alvin Swarup, Erich Rommel, Harneet Kaur and Anmolpreet Kaur

The following information includes in debt information about the fine fast food
organization of Chipotle Mexican Grill. As you continue to read through the following
report, you will find an introduction, executive summary, marketing plans and strategy
followed up by financial reports, our company outlooks and furthermore.

Date: October 13, 2023

INTRODUCTION-Alvin Swarup

The company our group has decided upon is Chipotle Mexican Grill. The purpose of this
report is to narrow down and explain in detail all the factors related to our company, our
marketing strategy and our financial situations, which we are going to further provide.
Chipotle is a fast food corporation. It was founded July 13, 1993, its headquarters are
located in Newport Beach, California. The founder of Chipotle is Steve Ells, as the
current CEO is Brian Niccol Over the years, chipotle has made its name through the
world excelling in the fast food industry. Chipotle currently has almost 3,000 locations in
the United States of America alone. They have consistently been at the top of the food
chain in America, sneaking their way into some of the top fast food ranking lists in the
country. Chipotle locations can be found all across America, Canada, Germany, France
and the United Kingdom, as they plan to extend and branch out more in Europe. The
deciding process was quite interesting for us, in the deciding process, we all suggested
different companies. As a result, we suggested we should land upon a topic that none of
us chose, which was chipotle. We figured it would be interesting researching something
that was nobody’s first decision, we also believe it challenges us more and helps put us
out there more, assisting us in the learning process. As we get deeper into the report, we
will mention the talks of business structure, financial situations, and the general company
overview.

References:

Chipotle founder Steve Ells leaves board, CEO Niccol to add chairman role. (2020,

March 6). Reuters. https://www.reuters.com/article/us-chipotle-board-idUSKBN20T27L

Daszkowski, D. (2019, December 6). Chipotle Mexican Grill’s Humble

Beginning. LiveAbout. https://www.liveabout.com/history-of-chipotle-mexican-

grill-3973222

R, S. (n.d.). Chipotle Headquarters Information. Headquarterslist.com. Retrieved

October 17, 2023, from https://headquarterslist.com/chipotle-headquarters-

information/.

X
COMPANY OVERVIEW - Harneet kaur

Chipotle Mexican Grill (chipotle) began in 1993 by Steve Ells. This company is an
American established chain of restaurants. The symbol or stock exchange of chipotle is
CMG (NYS). There are over 3250 franchises of chipotle and 47 new restaurants were
opened by chipotle in the second quarter of 2023. There are over 110000 employees who
are working for chipotle all over the world.

Tacos, burritos, salads, kids' meals, chips, and drinks are offered by chipotle to their
customers without any artificial flavors, color, RBGH (recombinant bovine growth
hormone), and GMO (genetically modified organism). Chipotle prepares all food in front
of customers and only uses 53 ingredients to make the whole menu. The company worked
worldwide like in America, Canada, France, and Germany.

Chipotle Mexican Grill's yearly revenue was (American) $8.6 billion in 2022 which was
14.47% more than2021. Company sales, operating margin, restaurant level operating
income margin also rose in 2022.the revenue quarter revenue of chipotle increased by
13.6%.

The goals of chipotle for this year is to buy 36.4 million pounds of organic ingredients
such as rice , beans from local farmer , in January 2023 almost thousand restaurants of
this company take a part in comporting programs and now chipotle wants to compose
23% and raise the number of restaurants that take a part in this programs. Furthermore,
chipotle dedicated to decreasing greenhouse emissions gas up to 50%.

References - Harneet kaur

Chipotle Mexican grill.(2023,march22).chipotle announces 2023 environmental, social

and governance goals tied to executive compensation. Retrieved from
https://newsroom.chipotle.com/2023-03-22-CHIPOTLE-ANNOUNCES-2023-
ENVIRONMENTAL,-SOCIAL-AND-GOVERNANCE-GOALS-TIED-TO-
EXECUTIVE-COMPENSATION

Chipotle Mexican Grill. (2023, feb7).full year 2022 highlights. Retrieved from
https://ir.chipotle.com/2023-02-07-CHIPOTLE-ANNOUNCES-FOURTH-
QUARTER-AND-FULL-YEAR-2022-RESULTS

Chipotle Mexican Grill. (2023).our values. Retrieved from https://www.chipotle.com/

Chipotle Mexican Grill. (2023, june26).second quarter highlights. Retrieved from
https://newsroom.chipotle.com/2023-06-06-CHIPOTLE-MEXICAN-GRILL-TO-
ANNOUNCE-SECOND-QUARTER-2023-RESULTS-ON-JULY-26,-2023

Chipotle Mexican Grill. (2023).sustainability: Food with integrity. Retrieved from

https://www.chipotle.com/

Market Line. (2022).company profile: chipotle Mexican grill. Retrieved from

https://web.s.ebscohost.com/bsi/companyinfo?vid=4&sid=227c8580-6f25-4fca-
a66f-a3ba8b46281a
%40redis&bdata=JkF1dGhUeXBlPXNzbyZzaXRlPWJzaS1saXZl#
Company Situation

S.W.O.T Analysis - Erich

Strengths Weaknesses

-Operational Network -Dependance on U.S. Market

-Customizable Menu -Limited Suppliers /Food Shortages
-Marketing Strategies

Opportunities Threats

-Strategic Marketing Initiatives -Increasing Employment Costs in U.S.

-Delivery /Takeout Development -Increasing Competition
-Expanding Into International Markets -Negative Publicity

Strengths:

Operational Network

Chipotle Mexican Grill has had much success in expanding their business across
the United States setting up locations in all the major cities along the southern border as
well as all major liberal states including but not limited to: California, New York,
Washington and Illinois (Says, 2016a). Chipotle’s marketing team has targeted both the
southern border and Liberal states in an attempt to draw the largest demand since
Mexicans and millennials /Gen Z generations provide the highest quantity demanded in
the U.S. Since Chipotle is able to set up so many locations around a country as large as
the U.S. the company is able to continue profiting without the risk of economic collapse
in a given region as their other locations will be able to support the downturn (Says,
2016b).

Customizable Menu

Another strength of Chipotle is their customizable menu (Cision, 2023 para.1).

Chipotle, much like a sandwich shop, allows customers to personalize their meals to
better align with their tastes and preferences. Although many other companies have
already implemented this innovation in the food industry, meal customization has allowed
Chipotle to excel and become one of the United-States top ten fast food restaurant chains.
By allowing customers to essentially make their own food, Chipotle is able to target both
the millennial and Gen Z generations as these people are statistically more selective with
their food and this allows the company to continue to grow through the years (meisenzahl,
2021, para. 1-6).

Marketing Strategies

Finally, Chipotle’s strongest attribute is their dedication to effective marketing.

Chipotle was able to achieve success by differentiating their product from other
alternative fast-food restaurants, claiming they are more of a fast-casual dining experience
(The Brand Hopper Team, 2023, para.2). In addition to changing the way people see their
restaurant, Chipotle has been proven to be dedicated to only serving fresh products that
are nutritious and will be enjoyed by their loyal customers (The Brand Hopper Team,
2023, para 2). Another more recent marketing campaign for Chipotle has been their
commitment to sustainable, chemical and pesticide free food supply from several farms
across the United States (The Brand Hopper, 2023, para.18). Although Chipotle does put
a significant amount of marketing budget towards advertising safe, fresh and sustainable
menu items, the company has also decided to expand its digital marketing efforts by
developing a mobile app, loyalty program and other integrated marketing campaigns that
include partnerships with organizations such as Formula 1 and the National Hockey
League (The Brand Hopper Team, 2023, para 11-19).

Weaknesses:

Dependance on U.S. Market

One major weakness for Chipotle Mexican Grill is their heavy dependance on the
U.S. market as 98% of their operations are based out of the United States of America
(Chipotle, pg.1). For a company that generated just shy of 10 billion dollars revenue
annually (Companies Market Cap, 2022, para.1) international revenue generated by the
company would only account for around 200 million dollars. Since the company has only
around 60 locations outside of the U.S (ChainXY, 2023, Fig.1), Chipotle is prone to
economic collapse should the United States economy continue to decrease over the next
several years.

Limited Suppliers /Food Shortages

Chipotle is a company like many others that is striving for agricultural

sustainability and safe farming practices which makes them extremely selective when it
comes to suppliers as there is only a limited number of farms that these sustainability
striving companies are able to draw from (Chipotle, 2023a). Not only do these high
expectations for clean and natural ingredients affect their restaurants supply nationwide,
these promises for healthy products comes at a severe cost to the restaurants demand as a
single burrito from chipotle will cost nearly twice as much as their competition e.g. Taco
Bell (Matagay, 2020, para.6).

Opportunities

New Restaurant Openings

In accordance to (Marketline, 2022, p.28), The company intends to expand its

presence through opening of restaurants. In February 2022, the company opened its
3,000th restaurant in Phoenix, Arizona, the US.” As of 2023, Chipotle currently owns and
operates upwards of 3200 restaurants internationally and they are in the process of
constructing their largest franchise to date in Paris, France (ChainXY, 2023, fig.1)
Opening new restaurants all over the world including domestically in the United States
allows Chipotle to reach new demographics and populations in Europe and Canada that
otherwise may have not even heard of the restaurant chain if they hadn’t. Another positive
of this expansion process is that since 98% of Chipotle’s operations are based out of the
U.S. (chipotle, 2023a), outsourcing their franchises to other countries is a great way to
cover their losses should the U.S. economy decline.

Strategic Initiatives

Chipotle’s main goal as a company has been for the better part of two decades has
been to open at least 7,000 restaurant franchises here in North America (Forbes, 2023a).
Forbes Magazine also suggests that restaurants could possibly generate upwards of 3
million dollars annually, 750 thousand dollars more than what restaurants reported
earning in 2022 ( Forbes, 2023b). These revenue reports from other franchisee’s are sure
to attract more and more investors looking to purchase their own franchise as they are
proven to generate a significant amount of revenue. Chipotle has also been developing
their online presence by creating an online app where they are now able to streamline all
delivery and takeout methods (Butcher, 2023, para.1), as of 2023, 750 thousand people
have downloaded the restaurant’s mobile app.

Threats:
Increasing Employment Costs in the U.S.

With California being the state with the greatest number of Chipotle operations,
(457) we can look into employment costs and how they have increased since the year
2000 (Chipotle 2023a). In the year 2000, the state of California had a mandated minimum
wage of $5.75; now in 2023, California has a minimum wage of $15.50, nearly 3 times
greater than the standard wage in the year 2000 (D.I.R. 2023, Fig.1). A relatively good
inflation rate for any country should be no greater than 2% annually, in the case of
California’s employment costs, minimum wage has risen by 270% since the year 2000.
This rise in employment costs does in fact help citizens afford more as the C.P.I.
continues to rise but it also negatively impacts businesses like Chipotle as their costs to
produce will increase as they must pay their workers more and more.

Increasing Competition

Another threat to the Chipotle franchise is their competition. Although Chipotle is

classified more as a fast-casual restaurant rather than a fast–food chain, they are still
competing against all the major fast food restaurant chains, primarily Taco Bell
(Investopedia, 2023, para.3). Chipotle’s fast-casual competition consists mainly of Qdoba
Mexican Eats and Moe’s Southwest Grill. (Investopedia, 2023, para.2) also claims that
“competition became more intense when the industry experienced unprecedented
challenges during the 2020 crisis,” this has led to more innovation within the industry in
order to cut costs just to turn a profit.

Negative Publicity

Finally the greatest threat to the future of this franchise is another “food virus
nightmare;” Not so long ago, Chipotle took a severe blow as a result of their poor health
and food safety standards. In 2017, A Texan actor came forward on social media claiming
the restaurant chain had given them the e.coli virus and this news went viral (Trefis, 2017,
para.1). In a time where news may go viral in an instant with some celebrity influences,
this story pushed Chipotle’s stock price down a whole 6% within days of the incident
(Trefis, 2017, para.2). Not only did this viral story impact the companies share price but
there were also several negative news stories bad mouthing the Chipotle franchise
pushing an unsafe narrative in regards to the franchise's food quality. These news stories
further repel customers from visiting their local Chipotle stores impacting the business
even more.
P.E.S.T.O.L. Analysis Erich

Political Economic

-Quarantine /Closure -Labour Costs

-Rising Tariffs -Cost of Fresh /Organic Products

Social Technological

-Target Demographic -Security

-Environmental -Legal

-Sustainable Organic Farming -FDA Regulations

-Energy Management

External Political Factors

Quarantine /Closure

As we have seen over the past few years the entire North American economy was
shut down as a result of Covid-19 where almost every stock price in the market dropped
significantly with the exception of drug companies; Chipotle was no exception to this.
Although Chipotle’s stock price did drop nearly 40% from economic collapse, the
franchise was able to come back stronger than ever, all thanks to Chipotle's new CEO
Brian Niccol, who was the previous CEO for Taco Bell. During the pandemic, Niccol was
able to ramp up the companies digital platform and revolutionize the Franchise by
creating a mobile app, improving takeout /delivery and considering the implementation of
“Chipotlanes,” a drive thru for Chipotle (Luna, 2020, para.3).

Raising Tariffs
 A second example of an external political factor would be tariffs on imports into
the U.S. as increased prices from these suppliers would result in increased costs from
there on out. While President Donald Trump was in office, specifically in 2019, he
imposed some significant tariffs on Mexican imports starting at a mere 5% and gradually
rising to 25% after approximately a year. Although we cannot see any substantial proof of
this when analyzing Chipotle’s stock price, it is fair to say that in the upcoming election,
Chipotle could be at risk of increased costs due to tariffs should Trump be elected into
office.

Economic

Labour Costs

With California being the state with the greatest number of Chipotle operations,
(457) we can look into employment costs and how they have increased since the year
2000 (Chipotle 2023a). In the year 2000, the state of California had a mandated minimum
wage of $5.75; now in 2023, California has a minimum wage of $15.50, nearly 3 times
greater than the standard wage in the year 2000 (D.I.R. 2023, Fig.1). A relatively good
inflation rate for any country should be no greater than 2% annually, in the case of
California’s employment costs, minimum wage has risen by 270% since the year 2000.
This rise in employment costs does in fact help citizens afford more as the C.P.I.
continues to rise but it also negatively impacts businesses like Chipotle as their costs to
produce will increase as they must pay their workers more and more.

Cost of Fresh /Organic Products

Another negative economic factor of Chipotle is the constant rising cost of fresh,
organic and sustainable supply of ingredients. Since the farms Chipotle uses to source
their products do not use an genetically modified organisms, pesticides or any other non-
sustainable methods of farming, they are essentially punished for their value of
sustainability. GMO’s, Pesticides and other chemicals have all been developed to
maximize the output of a crop to yield the greatest profit but without these, farmers make
less food and increase their costs further raising their prices to consumers like Chipotle.

Social

Target Demographic
 Chipotle’s style of customizable meals really draws the mouths of the younger
generation in today's age, primarily people aged 18-34 (TBH, 2023, pg.1). The science
behind this fact is quite simple; Millennials are more picky. Since Chipotle provides a fair
selection of organic, fresh and nutritious meals, millennials spring at the opportunity to
customize their favorite burrito bowl through the mobile app. People born in the
millennial /Gen Z generations are the most common people to be influenced by digital
marketing, especially social media marketing simply because they are on their phones
more than people in earlier generations.

Technological:

Security

One major concern for the Chipotle franchise is their cyber security. In 2017, a
hacker was able to install malware on credit card processors within Chipotle’s operations
and was able to steal a significant amount of money from customers over about a month's
time before the company caught on (Lukic, 2020a). This security breach took a
devastating blow to the trust between Chipotle and their customers as this was also the
same year they had apparently given a famous Texan actor the e. Coli virus. Chipotle was
able to recover from this disater by hiring the top cyber security tech they were able to
find and according to recent reports, the companies security appears to be just fine (Lukic,
2020b).

Legal

FDA Regulations

Chipotle has been under the scope for the better part of the past decade as the
companies lack of food safety resulted in over 1100 cases of food-bourne illness; Chipotle
ended up paying a 25 million dollar fine to California’s very own Department of Justice
in order to settle a number of civil lawsuits filed against the company for violating the
basic rights of a consumer. Since these allegations against Chipotle have come out, the
company has done everything in their power to bring their food up to a higher standard
than the FDA requires which is now one of their marketing points ironically.

Environmental:

Sustainable Organic Farming /Energy Management

 As per Chipotle’s sustainability statement, “See the difference we can make by
farming more organically and growing things locally. Good for our bodies and good for
the Earth. Become a part of nature again,” goes to show how conscious Chipotle is
regarding their environmental footprint (Chipotle, 2023c). Among other goals and plans
the franchise has, their most expensive goal would be to donate a total of 5 million dollars
towards young farmers in order to help them begin producing organic vegetables.
Chipotle does not only view sustainability as farming alone but also in energy
consumption. In 2022 Chipotle achieved its goal by purchasing more than 40% of their
energy from renewable energy sources. Also, the company also reduced their direct
greenhouse-gas emissions by 13% (Chipotle, 2023d).

Critical Issues

The S.W.O.T. and P.E.S.T.L.E. Analyses above allow us to identify a few critical
issues facing Chipotle Mexican Grill. Of the many issues Chipotle faces, cyber security,
the scarce quantity of organic suppliers and the company's history of negative publicity
appear to have the greatest effect on the company’s performance. It is paramount that
Chipotle must address these issues and strategise how they will be able to resolve these
issues in order for the company to remain profitable.

The first critical issue for the franchise used to be their lack of cyber security.
Back in 2017, hackers were able to install malware on processing machines allowing
them to steal credit card information and later using that information to make purchases,
stealing from the wallets of Chipotle customers. The result of this lack of trust between
the company and its customers had severe implications on their sales for a while until the
negative media surrounding the topic finally fizzled out. Although Chipotle was able to
hire and implement strong cyber security, there is still some hesitation of trust between
customers and their favorite mexican grill.

The second critical issue facing Chipotle is the scarce amount of suppliers they
can draw ingredients from given their extremely high standards for health and safety.
Since being fined a significant amount of money for failing to meet food safety guidelines
set out by the FDA, Chipotle has made it their priority to make the quality of their food,
one of the best in the world; but with this title comes the sacrifice of increased supply cost
and very little quantity supplied. If you were to imagine the slope of demand on a graph,
you would realize that since there is so little quantity demanded of these high quality
crops, the price must be ridiculously high in order for the farmer to even consider
growing these sustainable crops.
 Finally the last critical issue significantly hindering Chipotle’s ability to expand
and continue to profit is their issues with negative publicity. Chipotle has had to push
through a number of viral negative media campaigns stemming from two major instances;
the first being the breach in their cyber security and secondly, their food safety concerns.
Although the breach in Chipotle’s cyber security was enough to destroy the trust between
the company and their customers, they were never too financially damaged from it. On
the other hand, Chipotle’s issues with food safety has ultimately led them into a 25
million dollar fine paid to the California Department of Justice as a result of passing on
disease and infection to over 1000 individuals. This major set back allowed the company
to bounce back and now advertise their now extremely safe and high quality food but
Chipotle must stay true to their promise to provide a safe and healthy meal if they wish to
continue prospering financially.

References - Erich

Affairs, O. of R. (2020). Chipotle Mexican Grill Agrees to Pay $25 Million Fine
to Resolve Charges Stemming from More Than 1,100 Cases of Foodborne Illness.
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resolve-charges-stemming-more-1100-cases-foodborne
Butcher, A. D. (2023). Chipotle ordering app approaches 750K downloads in App
Store | Retail Dive. Www.retaildive.com.
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Chainxy Team. (2023). Chipotle Mexican Grill. ChainXY.
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Burritos, Fast Casual, Order Online. Chipotle.com. https://locations.chipotle.com/
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D.I.R. (2018). History of California Minimum Wage. Ca.gov.
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Official TikTok Hack Menu. Www.prnewswire.com.
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casual/chipotle-mexican-grill-outlines-key-tactical-wins-during-covid-19-crisis
Matagay, G. (2020, May 28). Supply Chain Lessons from Chipotle. Next Level
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strategy and its partnership with a Formula 1 team. TheStreet.
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%20Chipotle
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Team, T. (2023). Chipotle’s Stock Up 50% Over Six Months. What’s Next?
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publicity-continues-2017-11-28
Strategic Directions -Anmolpreet Kaur

Chipotle Mexican Grill’s Mission Statement:

“To provide ‘Food with Integrity.’”

The main factor that makes Chipotle’s mission statement different from others is that it is
not only covers customers' experience but also includes the company’s brand attitude as
well as how the food is produced, prepared, and delivered.

This simple yet powerful statement represents the company’s purpose and reason for its
existence in various key elements which are discussed below:

· Providing healthy food to the customers: This is the foremost and important
element that makes Chipotle unique from other fast-food companies. As Chipotle's
main objective is to provide high quality food, they make sure that every step
involved in production, preparation and serving is the best for their customers. To
provide the signature taste in every item of their menu Chipotle has their own 53
ingredients and forms partnerships with farmers who prioritize sustainable and ethical
practices. In this age and time, people are really health conscious. To meet the
customer’s expectation Chipotle, provide customization of meals according to
customers needs and restrictions. Although, the company uses a customer centric
approach to guide its menu by listening to the demands and feedback of the customer
then applying those to bring changes in its menu.

· Affordability: Providing food that is affordable by everyone is also one of the

missions of the company. To provide amazing food at reasonable prices is one of the
main concerns during the unstable economy. Chipotle always makes sure that items
on their menu can be accessible for all. However due to inflation there is moderate
increase in the prices of chipotle but still according to the Chipotle CEO Brian Niccol,
increase in prices doesn’t weaken the lower income consumers to buy Chipotle’s
 products. Thus, having a strong and loyal customer base is one of the strengths of the
company. So, serving the customers at a reasonable price is the company's duty.

· Transparency: According to the two rights of consumers, they have right to get
information and have right to make choice regarding what they are eating and what
they want to eat, Chipotle provide the detailed and complete list of 53 ingredients that
they use to create their meals with no use of artificial flavoring or colors and
preservatives which are also tested by RFID technology of ingredients as per
mentioned in company’s new releases. Furthermore, the company also launched
‘Behind the Foil’ the most intimate look of the company's operations where they
provide information regarding the company's kitchen, employees, and farming
partners.

Chipotle Mexican Grill’s Vision Statement:

“To do more than just rolling burritos while working to cultivate a better world.”

Chipotle’s official vision statement wasn’t released by the company, but this is the
implicit vision statement given to the company by its general practices. It represents what
the company does and the priorities of the company. Following are the factors related to
the vision statement:

· Cultivating a better world: Chipotle won the hearts of many customers by

providing more than customers expectations and works for overall development of the
community. Using sustainable practices and reducing the 50% of landfill waste in
2021 and greenhouse gas emissions by the end of 2030 shows that the company is
more concerned about providing more than taking from nature rather than solely
focusing on profit maximization for its own growth.

· Do more: Company’s vision is not only to roll burritos for its customers, but it
provides flexibility to incorporate customers' wishes into a burrito or other dishes.
Chipotle has proven that it is unique from others as distinctiveness and branding of its
products speaks to this status of the company.

Chipotle Mexican Grill’s value statement:

“We believe that food has the power to change the world.”

The Line is the Moment of Truth

Teach and Taste Chipotle

Authenticity Lives Here

The Movement is Real

Chipotle believes that there is a connection between how food is raised, prepared and how
it tastes (Chipotle, Nd. -our values). Chipotle’s major focus is to improve its ingredients
for its customers. The company emphasizes on doing everything right even if it is hard to
do so but being real is what makes Chipotle different from others.

· Commitment towards providing the best ingredients: Chipotle is one of the

national restaurant brands who is committed to use local organic produce and
responsible for using only raised meat. Apart from this company has its own
ingredients for making fresh food everyday with no artificial flavors and colors.
Company knows what it serves and how it prepares the meals. That's why Chipotle is
not afraid to announce its ingredients publicly that it uses 100% natural ingredients in
its menu items that reflects the authenticity of the company.

· Owning the responsibility: Company makes sure that its values that it stands for
are not just words, but it also wants to reflect those words through its actions and day
to day activities. From making these values true company’s employees play their
crucial role. The line is the moment of truth is one of core values of the company
which emphasizes the front and digital line that shows employees hard work,
commitment, dedication, and their skills by providing behind-the-scenes of how the
meals of customers prepared. To provide the best customer service, the company also
provides culinary training with career opportunities and other benefits for its
employees which is one of the core values of a company to treat its people right.
Company provides excellent pay and bonuses with medical insurance for the workers
and their families as well as provide potential compensation up to $100k in 3 years.
Osiris was one of the crew members in Chipotle with no restaurant experience from
dominance republic is now a general manager in just two years (Chipotle-careers, nd.)
shows the outcome of company’s training and opportunity to grow together.

Thus, company shows that its day-to-day operations are in line, and it is living its
mission, vision and value statement and committed towards achieving its long-term
goals or objectives which are discussed below:

The first alternative of the company towards a long term objective is to expand
globally. Initially, the goal was to open 6000 restaurants which have raised to 7000
restaurants across North America out of which 3200 restaurants are already opened
across the world. The brand expects to open between 235 or 250 new restaurants this
 year including drive thru and is targeting small towns with a population of 40,000 to
100,000 because of favorable cost structure, said Niccol. Chipotle has 24 restaurants
open in Canada and 13 restaurants in Europe as of 2017 and has eyes on expanding its
business in Australia also (Chipotle,2018). This expansion resulted in providing more
revenue sources for the company. However, due to expansion in new markets the risk
of finding suppliers in foreign markets is also increased. Limited brand awareness in
foreign nations is another challenge for Chipotle but because of taking risks, the long-
term reward would be fruitful for the company’s income sources.

Another strategy is branching out into other food genres with other restaurants.
Previously, Chipotle's experience of branching out with Tasty Made (a burger joint) was a
failure, it only continued for 2 years in one location. Still, Chipotle tried to work out with
Pizzeria Local in multiple units, but the company faces difficulties to carry out in this
venture also as a result all the locations were shut down outside of the Denver area.
Instead of losing confidence because of failure company learn its lesson from its mistakes
and uses its experience with these ventures to provide fully focus on growing the brand
and finding other alternative sources for long term success of the company and it still
have long term goal to do venture with grade B food and beverages companies in future
stated in sustainability report of 2022.

The last but not the least is to focus on providing food safety, adding new variety in the
menu and innovative ways to serve the customers. Chipotle already started experimenting
digitally for customers to order their food using the Chipotle application and to get their
food easily and quickly from a pickup window called ‘Chipotlanes’. The percentage of
sales in restaurants having Chipotlanes has increased by 15% as compared with non
Chipotlane restaurants. Watching the success rate of this digital practice Chipotle plans to
include Chipotlanes in 90% of its restaurants. Innovations like this help Chipotle to
improve its digital image and even increase the revenue sales of the company.
Furthermore, Company’s simple menu can be considered as an advantage for attracting
new customers and handling the shortage of food. Although, Chipotle tried to add new
items in its menu by adding queso, chorizo and in 2021 a new chicken item was
introduced in the menu called Pollo Asado. Chipotle uses limited time offers twice or
thrice a year to attract new customers rather than revamping its menu. They can also
expand the plant-based ingredients for the vegetarian and vegan customers because they
already have limited options at many other restaurants. The drawback of adding items is
finding new suppliers but still the outcome of taking this is greater as it provides
opportunity to get customers inside the restaurant which offers increase in sales, loyal
customers, and revenue.

Chipotle Mexican Grill’s Ethic Policy:

 1. According to Ethic’s policy of Chipotle, it involves 7 main contents:

2. Cultivating a better world through business with integrity

3. Cultivating a better world for our employees

4. Cultivating a better world by serving exceptional food

5. Cultivating ethical business practices everywhere we work

6. Cultivating better communities

7. The keeping it real test.

8. Additional resources

Everything in detail in those contents is mentioned in the code of ethics on the corporate
website. Chipotle says that its code of ethics enables them to make good decisions on a
daily basis and set standards for the employees to work ethically. These guidelines are
applicable to all employees and even at every level which also includes executives and
board of directors of the company. Chipotle also updates its ethics from time to time. If
anyone in the company doesn’t follow its code then there will be consequences which can
result in suspension without pay, termination of employment, fines, and criminal
prosecution. Even unethical behavior can be reported to the managers, workplace hotline
team, legal or internal audit department and it can be reported online at www.chipotle
confidential.com. There is a code of ethics for suppliers also which makes sure that all the
suppliers are performing the ethical policy. One example is Chipotle’s supplier of pork
failed to meet its ethical requirements consequently the company stopped serving pork in
many of its restaurant chains (Lupa. April 2015.). Chipotle never compromises its quality
of food the offers and its efforts of two years to eliminate the use of unnecessary additives
and preservatives lead them achieve its title of only national restaurant brand with no use
artificial colors and flavors (Chipotle, nd).

Moreover, there are some codes of ethics that have been violated by companies in the past
few years. Company states that they are dedicated to prevent harassment and
discrimination at the workplace whereas an unethical conduct happened in 2021. When a
manager at Chipotle in Kansas repeatedly harassed a Muslim woman by asking her to
remove her hijab because he wanted to see her hair. As per the complaint after many
weeks, he forcibly removed the hijab of the employee. Therefore, a federal agency sued
the chain of Chipotle because of religious harassment and retaliation. The lawsuit states
that Chipotle violated its federal civil right of protecting employees from discrimination
based on religion, race, sex, ethnicity, and national origin. They want improvement in the
company's policy and to pay damages to the employees (Rush. September2023). Chipotle
also started providing anti harassment training for the employees. Another unethical
behavior of the company can be seen in Washington, DC. Where minor workers were
working for more than 48 hours per week consequently Chipotle had to pay $322,400 as
fine to settle allegations in 2020. Also, company pays $7.75 million for violation of child
labour laws in New Jersy. Talking about this year, the company had to pay $24,000 to the
former employees due to violation of labor laws and workers kept forming unionization
even after the unit of restaurant in Augusta location was shut down (Jackson.2023).
However, after all this mishap, the company always tries to improve and learn from its
mistakes with a mindset of doing better in the future.

Sustainability Goals of Chipotle Mexican Grill:

‘Become a part of nature again’ is the sustainability policy of Chipotle that emphasis
on usage of locally produced organic material which are good for both human and
nature and according to the recent, 2022 sustainability report of chipotle there are
three categories to perform sustainable practices: People which further includes the
employees, farmers, suppliers, customers and community; Food and animals then
Environment which are as follows:

Considering the life cycle impact of sustainable policy company goals, inventory
analysis and assessment and interpretation are impacted by the progress and achieved
target of the policy.

· People: The report states the major goal to provide $5 Million to help the
young farmers by the end of 2025 out of which $1 Million is already
provided measuring from the initial commitment towards the goal.
However, it provided seed grants to the farmers and donated 5% of its
tractor beverages’ profit to the young farmers. Apart from this the
company provides promotion to 22000 employees and gives bonuses of
total cost $37 Million. Chipotle also awarded $14 million in tuition
assistance to more than 4800 young employees. For the community, the
company donated 282,000 meals to the needed people. Thus, all these
targets show how dedicated Chipotle is towards achieving its goal which
interprets the socioeconomic objectives of the company.

· Food and animals: In order to maintain the high quality, Chipotle focuses
on its usage of organic material which is locally produced that makes them
to purchase $22 Million pounds of organic ingredients and $232 million
pounds of animal welfare certified chicken, beef and pork. Chipotle also
uses a food print sustainability impact tracker to track its 53 ingredients to
 show transparency. Also, the company achieved its goal of 100%
American Humane Certified for Chicken by 2022. Thus, the inventory of a
company is based on providing high quality and usage of organic sources
on which companies spend millions of dollars. This might be considered as
a secret of the company's large customer base.

· Environment: The major long-term goal of the company from 2019 is to

reduce 50% in greenhouse gas emissions by 2030 out of which 13% of the
goal is already achieved and in progress. Moreover, 40% of electricity is
purchased from renewable resources. Another long-term goal is to identify
the key biodiversity hotspots and to reduce 5% of the waste to landfill by
2025 which starts from 2020. The company also uses biodegradable
material and its policy of closed loop glove to trash bag is such a great
example of a circular economy (Chipotle - 2020 sustainability report).

From our perspectives Chipotle is doing great by providing transparency of its

progress towards achieving its goals rather than just blabbering about its achieved
goals only.

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