Comprehensive Business Plan: Analysis of Chipotle Mexican Grill

This report presents a business plan solution focused on addressing the challenges faced by multinational restaurant chains, particularly Chipotle Mexican Grill. The study delves into issues such as food safety, supply chain management, labor market dynamics, and competitive pressures, aiming to provide feasible solutions. Through qualitative interviews and secondary research, the report analyzes the external environment using the PESTLE framework, examining political, economic, social, technological, legal, and environmental factors. It also assesses the internal environment and proposes strategies such as improved supplier training, strict supply chain management, and inventory restructuring. The report further includes a marketing mix and SWOT analysis to suggest improvements in the current business situation, concluding with ethical considerations and a critical evaluation of the findings. The analysis reveals that addressing food safety is crucial for boosting market performance and maintaining customer confidence.

Running head: BUSINESS PLAN OF A RESTAURANT
Business Plan of a Restaurant
Name of the Student:
Name of the University:
Author Note:

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BUSINESS PLAN OF A RESTAURANT
Table of Contents
a) Introduction to the actual issue:...................................................................................................2
b) Business Mission / Vision:..........................................................................................................2
c) Research Goal and Objectives:....................................................................................................3
d) Evidence of collecting of data:....................................................................................................4
e) Detailed analysis of findings in regards to the environment/culture/competition:......................4
Political Factor –..........................................................................................................................4
Economical Factor –........................................................................................................................5
Technological –...........................................................................................................................9
Environmental –.........................................................................................................................10
Legal..........................................................................................................................................10
f) Graphs/diagrams and tables:......................................................................................................10
g) Justification choosing a specific computerized statistical system:............................................13
h) Main analysis and discussion of the recommended solutions:..................................................13
Training and development of suppliers of raw materials:.........................................................13
Strict supply chain management:...............................................................................................14
Restructuring of inventory management:..................................................................................16
i) Suggested strategies of improving and/or change a current business situation (marketing mix,
SWOT Analysis etc.):....................................................................................................................17
Marketing Mix...........................................................................................................................17

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SWOT analysis..........................................................................................................................19
j) Ethical Consideration in regards to research and recommendations:........................................20
k) Conclusion/Summary/Critical evaluation:................................................................................20
References:....................................................................................................................................22
Appendices:...................................................................................................................................26

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a) Introduction to the actual issue:
The chains of multi cuisine suffer from several issues pertaining to food safety, supply
chain issues, dynamic condition of the labour and mounting market conditions. These factors are
of serious concern to the restaurants have negative impacts on their businesses like lowering of
revenue, demeaning customer satisfaction and devaluation of their market goodwill. This means
that the management of the restaurants have to take steps to counteract these issues. The aim of
the paper would be exploring the issues faced by multinational chains of restaurants to
recommend feasible solutions. The study would take into account the Chipotle Mexican Grill
Inc., which is based the United States of America and is listed on the New York Exchange
(Bloomberg.com, 2019). The restaurant is present in the United Kingdom, Canada and Germany
other than its home country, the US (Chipotle.com, 2019). The report would emphasise on the
issue of food safety the restaurant and its impact on the operations of the restaurant.
b) Business Mission / Vision:
The mission of the Chipotle Mexican Grill Inc. is to offer fast food products which are
made without with additives and preservatives. The official website of the restaurant claims that
the restaurant prepares the fast food items in the ‘classical’ methods which ensures the nutritional
values of the ingredients remain intact. The company also aims to provide food products to
customers at reasonable rates which would allow it to create value for them. This would also
allow the company to earn high revenue (Chipotle.co m, 2019).
The vision of the Chipotle Mexican Grill is to bring about disruptive innovation in the
fast food market and how consumers perceive fast food. The restaurant chain aims to provide
organically fresh fast food products instead of highly cooked and spiced fast food. This would

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enable the firm differentiate itself from its competitors like Dominos. The firm caters organically
prepared fast food items containing natural ingredients (Khan et al., 2016). This would enable
the fast food company to cater to health conscious customers and establish itself as company
offering fast food items which benefit the customers.
c) Research Goal and Objectives:
The goal of the research is to delve into the issues from which the fast food chains are
suffering and are facing long term problems. The objectives of the study would be investigating
deeper into the issue of food safety to uncover the impacts which the issue has on the business
operations of the company.
The first issue which the restaurant chain faces in its home country as well as host
country is issues pertaining to food safety. The poor food safety creates several problems.
Boyland and Whalen (2015) opine that poor quality of food effects the health of the consumers
negatively which results in illness. This results in low customer satisfaction which leads to
customers shifting to other restaurants. Thus, it is evident that food safety is a crucial aspect of
the business of restaurants because poor food safety results in preparing of low quality food
which results in low revenue generation. Wilson et al. (2016) supporting the previous author
opine that poor food safety does not only hit revenue generation but also capital generation
(Bloomberg.com, 2019). Thus, it clear that the goal of the restaurant should be improving food
safety to boost its market performance.
d) Evidence of collecting of data:
The method used to collect the data about the issues which the Chipotle Mexican Grill
faces pertaining of safety of food products is qualitative interview. The interview of Steve Ells,

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the founder of the restaurant chain is the evidence of the use of interview to gain information
about the topic. Steve Ellis, the founder of Chipotle Mexican Grill reveals in an interview how
the restaurant chain was formed (CNBC.com, 2017). The founder of Chipotle in an interview he
took in 2017 from the Denver Post spoke about a salary reduction which he had suffered after
being appointed as the executive chairman (Denverpost.com, 2017) (Figure 5). The information
about the effect of food safety at Chipotle can be obtained from an interview of Brain Niccol, the
new CEO. The interview clearly mentions that Niccol wanted to revive the market position by
dealing with the food safety issue. The graph of stock indices of Chipotle attached with the
interview also showed that the company’s share prices dropped due to food safety issues.
(Bloomberg.com, 2019). The Forbes also reports the fall of share prices of Chipotle due to food
safety issues (Forbes.com, 2017). The interview of apex managers of Chipotle can also be
obtained from Youtube. The method of interview was chosen over questionnaire because unlike
the latter interview allows more extensive discussion about the topic. For example, the topic
under consideration is food safety at the Chipotle. It would be prudent to use interview in this
case because it would allow the interview to gain more knowledge about the topic from the
respondent by asking pertinent questions. An interview unlike a questionnaire follows no
predetermined questioning pattern and can be adapted according to the need of the situation. This
advantage of interview over questionnaire makes it more appropriate to choose the former over
the latter. The analysis of the findings from the interviews show that food safety issue is the
main issue which is affecting Chipotle. The negative effect of the food safety issue on the
international restaurant is evident from the fact it has led to fall in the share price of the
restaurant (Bloomberg.com, 2019). This means that the issue of food safety has hit the very
capital base of the restaurant.

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e) Detailed analysis of findings in regards to the environment/culture/competition:
The Chipotle Mexican Grill is an American restaurant headquartered in the US and
present in overseas markets like Canada. The restaurant as a result comes under the influences of
different macroeconomic environmental factors in both the US and its host markets. These
external market factors pertain to the political, social, economic, technological, legal and
environmental factors abbreviated as PESTLE. The research about the external market factors of
the restaurant would be based on the analysis of secondary resources like articles and websites.
The following are the findings from the research of PESTLE of the Chipotle Mexican Grill:
Political Factor –
The Chipotle Mexican Grill is based in the the United States of America which is
considered as the world’s second largest democracy. The restaurant comes the influence of
several political factors prevailing both its home country and host countries.
The first political factor which influences the Chipotle is political stability in both its
home country and host countries are political stable. The findings of analysis of political
stability of the home and host countries of Chipotle show that their political stability
enables them to form laws and regulations which form the base of the strategies of the
restaurant chain.
The second political factor which influences the Chipotle is international bilateral
relationships between the government of the US and the countries like Canada, the UK and
Germany (2001-2009.state.gov, 2019). These bilateral relationships of the Government of
the US have enabled the Chipotle to enter these host countries and establish itself as the
leading restaurant.

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The third factor which comes into play in the functioning of Chipotle is threat like
terrorism and political disturbances. Enfield (2019) points out in this respect that
challenges like terrorism have devastating impacts on the businesses of multinational
restaurants like Chipotle. Terrorism attacks result in loss of resources like building and
expensive machinery which the restaurant use in its business. Terrorism also results in loss
of human capital and customers present, thus ultimately hampering the entire business
operations of the restaurant. However, it can be pointed out that the restaurant can take no
step to prevent terrorist attacks. The restaurant have to depend on the governments of its
home country and the host countries to take steps to counteract terrorist attacks (McNair,
2017)
Economical Factor –
The first economic factor which Chipotle has to consider while operating in the
market is rate of international currency exchange, particularly USD since the USA is its
home country. USD is gaining against the two international currencies namely, GBP (the
UK) and CAD (Canada) (Bloomberg.com, 2019). It can be inferred from this finding that
the restaurant should make strategies to acquire resources from these countries at lower
costs. The Chipotle would also be able to diversify its investments over the financial assets
in different countries to earn higher rates of returns on investments from these countries. It
can also be inferred from the finding that the company can also diversify its expenses and
losses over the revenue generation from these countries to manage its market risks (Lee &
Kang, 2015). Thus, it is evident from this finding that the company should be able to
diversify its financial risks by taking advantage of the difference of ROI rates which
different nations can give to maximise its return from the market.

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The second finding from the analysis of the economic analysis of the markets of
Chipotle is that the company comes under impacts of the supply chains in its different
markets to acquire raw materials. Trkman, Budler and Groznik (2015) mention in this
respect that international business organisations like Chipotle have to acquire raw
materials from its local supply chains both in the home and host countries to ensure
acquisition of raw materials and work-in-progress at economies of scale. Thus, it is evident
from the findings that the restaurant company comes under the influences of the economic
factors prevailing in both its home and host market.
Figure 1. Global Strategy framework (Source: Lasserre, 2017)
The third factor which influences the operations of the Chipotle is rate of economic
development in its home country namely the US and its host countries namely, the UK,
Germany and Canada. This second figure below shows that the US enjoys a high gross
domestic product (Tradingeconomics.com,. 2019). Similarly, the host nations of the

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company like the UK too experience higher rates of GDP (Ons.gov.uk, 2019). This means
these countries owing to high GDP rates are able to experience higher rate of product
manufacturing and able to to provide employment among their respective manpower
(Ruggie, 2018). The people these markets owing their high income are able to visit the
Chipotle are able to spend more amount in ordering expensive dishes made from organic
products at Chipotle. Thus, it is evident that the company is able generate heavy sales by
serving upper class customers.
Figure 2. Graph showing GDP of the UK
(Source: Ons.gov.uk, 2019)
Social –
The Chipotle comes under influences of social factors like income of the target
groups of consumers and acceptance as dining at high-end restaurants as a part of the life
style of the target groups of customers. The findings from the analysis of the all the four
markets of the restaurant chain namely, the US, the UK, Canada and Germany shows that
these countries are economically strong with the people have high amount of disposable

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income (Ons.gov.uk, 2019). For example, the GDP per capita income of Canada shown
below shows that the country is experiencing high per capita income. This means that the
residents in the country would be more disposable income to afford dining services at the
expensive restaurants like the Chipotle which would enable the latter to earn high revenue.
Thus, it is evident that Chipotle would gain from the social factors in its target markets and
generate high revenue.
Figure 3. Graph showing GDP per capita of Canada (US$)
(Source: Data.worldbank.org, 2019)
Technological –
The Chipotle comes directly under the technological factors in its home and host
markets. Preparation and storage of food products in appropriate states are totally
dependent on availability of advanced technology. The company acquires advanced food

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processing plants and also acquires warehouses in these countries (Yang, 2017). This
acquisition of technology would enable the restaurant to offer high safety food to
customers, thus enabling the former to deal with the issue of poor safety of food. Thus, it is
evident from the findings that technology has strong positive influences on the restaurant
chains.
Environmental –
The countries where the Chipotle operates namely US, the UK, Canada and
Germany have strong environmental policies in place which have direct impacts on the
restaurant. The restaurant has to ensure that it complies with all the laws to in order to
function in these countries efficiently (Little & Van Walbeek, 2018).
Legal –
The Chipotle Mexican Grill has to comply with the laws pertaining to food safety,
taxation and employment to function efficiently. The company should ensure that it
incorporates the laws of the countries in its policies to avoid penalties and government
actions (VanEpps et al., 2016).