The Sexy Six
Company History
Started in 1993 by Steve Ells in Denver, CO with the idea
that food that is served fast does not always come with
the “fast-food” experience
He wanted to use high-quality, local ingredients, classic
cooking methods, and a fine-dining atmosphere. Chipotle
would offer “a few things, a thousand ways.”
McDonald’s invested in the company when they had only
16 restaurants. They handed resources and guidance
down to the young company for 8 years, helping it grow to
the publicly traded company that it is today
During the year of 2014, Chipotle opened 192 new
restaurants, bringing their total restaurant count to 1,783.
The fourth quarter of 2014 shows a 26.7% revenue
increase from the fourth quarter of 2013.
Vision, Values, Goals
Vision
To change the way
people think about and
eat fast food
Values
 Support and sustain family
farmers who respect the
land and the animals in their
care
 Use meat from animals
raised without the use of
antibiotics or added
hormones
 Source organic and local
produce when practical
 Use dairy from cows raised
without the use of synthetic
hormones
Goals
Use higher-quality
ingredients and cooking
techniques to make great
food accessible to all
people at reasonable
prices.
Map the Industry
Raw
Materials
Industry Boundaries
Farmers/Ranchers
Product Scope: Fast-Casual Restaurants
Geographic Location: United States
Distributors
Competitors: Panera, Five Guys, Zaxby’s
Restaurants
Consumers
Qdoba Mexican Grill, Einstein’s Bros Bagels,
Boston Market, Panda Express, Jimmy John’s,
Noodles & Company
Assess
Profitability
Farmers/Ranchers
Meat
Dairy
Vegetables
Paper products
Plastic products
Dining equipment
Bargaining Power of Suppliers
Potential Entrants
International Quick Service
restaurants
Non-Quick Service
restaurants
Buyers
Individuals
Teams
Business
Fast-Casual restaurants
Panera, Five Guys,
Zaxby’s, Qdoba
Mexican Grill,
Einstein’s Bros Bagels,
Boston Market, Panda
Express, Jimmy John’s,
Noodle’s & Company
Substitutes
Full-service restaurants
Fast-food
Casual restaurants
Buffets
Caterers/refreshment
stand vendors
Retail-host restaurants
(Gas stations/grocery
stores)
Complements
Soft-drinks
Juice
Snacks
Force
Factors
Product costs % of total? 33.4%
Bargaining Power of Suppliers Concentration of suppliers? Yes
Switching costs? Low
Strength
Profit Impact
Low
Bargaining Power of Buyers
Product differentiated? Yes
Criticality? Yes
Switching costs? Low
High
Rivalry Among Existing Firms
Industry concentration Very high
Diversity of competitors High
Product differentiation Med
Low
Threat from New Entrants
Capital requirements Low
Economies of scale Yes
Product differentiation Yes
Access to channels High
Expected retaliation Low
Low
Threat of Substitutes
Buyer propensity to substitute High
Product differentiation High
High
Power of Complements
Mutually beneficial industries? Yes
Stronger market position? No
Low
Neutral
Industry Key Success Factors
1.
2.
3.
Strong brand image to help distinguish restaurants from their competitors
•
Branding might involve focusing on bold flavors, fast preparation of special orders, better ingredients or healthier diets.
•
“By Technomic's estimation, there are at least 10 different markers of restaurants that fall within the category: the quality of
the food, the use of better ingredients, food that is wholesome, a perception of freshness, first-rate decor, fair pricing, fast service,
friendly employees, flexible offerings, and a full view of how the food is prepared.”
The quality of products that a restaurant provides their customers determines how successful they are
•
“It’s generally acknowledged that fast-casual concepts are hybrids of quick-service and casual dining that provide counter service
and offer more customized and freshly prepared dishes than traditional quick-serves, all in a upscale, inviting atmosphere.”
•
“Fast-casual menus feature a wider, more daring range of ethnic fare, which gives chefs and consumers the opportunity to try new
tastes.”
Restaurant layout
•
4.
“In the design of Fast Casual Restaurant Concepts, the restaurant consultant working with the customer, starts with the menu,
develops the service model and the menu boards. The service model as the interface between the customer and the restaurant
team, dictates the rest of the design and layout.”
Price
•
“They offer some dishes at around the same price as [those at burger joints], but they seem to be better than McDonald’s at
nudging diners towards pricier dishes and extras. Fast-casual chains typically manage to squeeze 40% more out of each diner’s
wallet than fast-food joints do.”
•
The sector still maintains its traffic count indicating that people prefer quality and hygiene over a rise in item prices.