Chipotle Mexican Grill Case Study Term Paper

Environmental Analysis

Such was the case when the business phenomena that triggered the great depression and the more recent great financial crisis exploded and wreaked havoc on businesses, entire industries, and even on the world economy. In this case, the focus is on Chipotle Mexican Grill’s environment and the industry it is operating in. Chipotle is an international business that operates in the food and food services industry. Specifically, it specializes in selling burritos, tacos, and other Mexican foods and delicacies. For what it is worth, the company’s name is derived from the Aztec term for dried and smoked jalapeno chili peppers, one of the spiciest variants of chili used in food preparation.
There are several ways how to make an industry wide analysis and one of the most common ways how business and risks analysts do it is by examining the effects of certain economic phenomenon (e.g. economic booms and busts) on an industry. For example, during the recent great financial crisis, it was the financial firms (i.e. banks and asset management institutions) that took the greatest hit; whereas the food and food services industry was barely untouched—from a sales volume perspective. The food and food services industry is one of the most resilient industries . With the world population rapidly increasing at an almost uncontrollable rate, especially in urban areas where the building density gets higher and higher (that is the number of persons living per unit of area gets increased), the practice of food buying becomes more and more common. Also, as people, especially in urban areas, get busier with their jobs (i.e. most jobs today take more than a quarter of an individual’s available time per day), more and more people resort to buying and eating foods in food stores (e.g. fast and casual dining chains such as Chipotle) instead of spending their time preparing their food themselves.
As this obvious shift in the trend of practices related to the way how people consume food, one of the most important physical needs according to Maslow’s hierarchy of needs, the situation becomes more favorable for the food and food services industry because their market tends to become larger and larger, and also to the companies that are already positioned in and for it such as Chipotle in this case.
In a journal entry published in Forbes’ website, author Steve Denning suggested that for the coming years, companies operating in the food and food services industry are expected to experience significant sales growth as the industry gets revolutionized . One example he mentioned was the way how the use of the internet enables people to order food online and get the food delivered to their doorstep. In general, new ideas like these are expected to have a positive impact on companies like Chipotle.
There are two major stakeholders that Chipotle cannot afford to take for granted: their customers, and their raw material suppliers—their business partners. This is pretty much the same for other businesses operating in the same industry. Customers are the ones who buy their products while their suppliers are the ones that make it possible for Chipotle to produce its products. Without these two, Chipotle would not be able to generate the necessary earnings to complete another business cycle of buying food raw materials, preparing their food products, and selling those products to their customers for a price.
Stakeholder management is an important part of organizational management . While it is important for companies like Chipotle to focus on these two stakeholders (i.e. their customers and suppliers), it would not be a wise decision to lose their focus on their other stakeholders such as the government and the members of the community where there core business operations are conducted . If the company can individualize their approach when it comes to dealing with their stakeholders, then they may be able to arrive at improved outcomes. Otherwise, a balanced approach would still be more recommended. Some specific examples of strategies that they can implement include giving regular promotional deals and other marketing gimmicks so that their customers would be more compelled to buy their products and avail of their services, or giving bonuses to their business partners or suppliers for every number of successful orders made on time, or for every emergency order fulfilled. The key here is to be creative when it comes to bolstering the company’s relationship with its stakeholders .

Human Resources Management

All of Chipotle’s stores in the United States and in overseas locations such as in the United Kingdom, Canada, Germany, and France, are company owned. The company does not franchise its business to individual store owners. It now has more than 1,700 store locations with a staff number of no less than 45,000 employees . All of its employees are managed by its corporate management team which is composed of corporate managers and the board of directors. The corporate management team in turn reports to the members of the top management team which is composed of the Chief Executive officers, the Chief Development Officer, Chief Financial Officer, and the Chief Marketing officer, as well as the board of directors.
This is a rather unique human resources management strategy or model because most companies operating in the food and food services industry have a dedicated human resources manager for every region or location. In this case, it appears that Chipotle’s corporate and top management team members are the ones getting hands on experience in managing their human resources. At some point this may be considered as a positive characteristic mainly because the true leaders of the company get to have a bigger influence on the way how they want their employees to behave or perform.
However, this may also be considered as a disadvantage especially when one considers the fact that there may be other valuable things that the organizational leaders may do aside from staying focused on the human resources management department; some of which include spending more time in planning for future expansions, fixing the company’s financial books and fiscal control policies, spending more time consolidating the assets of the organization, and other managerial jobs that are highly likely to be taken for granted as a result of the corporate and top management’s apparent heavy placement of attention in the human resources management aspect.

References

Buysse, K. and A. Verbeke. "Proactive Environmental Strategies: A Stakeholder Management Perspective." Strategic Management Journal (2003).
CNN Money. "Chipotle Mexican Grill might be a victim of its own massive growth." CNN Money (2015).
Denning, S. "What's the future of the Food Industry." Forbes (2014).
Freeman, R., E. McVea and J. McVea. "A Stakeholder Approach to Strategic Management." (2001).
Hillman, A. and G. Keim. "Shareholder Value, stakeholder management, and social issues: What's the bottom line." Strategic Management Journal (2001).
Wang, N., N. Zhang and M. Wang. "Wireless Sensors in Agriculture and Food Industry - Recent Development and Future Perspective." Computers and Electronics in Agriculture (2006).