Going Global: Chipotle

Devon WescottKathleen O'HearnAsiana GilchristMartin Yany

Company Overview

Founded by Steve Ells in 1993 in Denver, Colorado

-opened at an former Dolly Madison ice cream

parlor

Over 1,000 locations in 43 states-2 locations in Toronto, Canada -6 locations in London, UK

Chipotle the Brand

Mission Statement: "Food with Integrity" -"fresh is not enough, anymore"Chipotle Cultivate Foundation - supporting family foods - increasing animal welfare and pasturing -increasing nutrition and reducing obesity in

children "Back to the Start" -sustainability

What Chipotle Has to Offer"Fast- casual" -line- up, self servingHigh quality raw ingredients -naturally raised pork, beef & chicken -organically grown produceDistinctive interior design -working to make each store as sustainable

as possibleLimited menu -burritos, burrito bowls, tacos and salad

Chipotle ExpandsShophouse -Asian RestaurantVery Similar to Chipotle -same mission statement -uses high quality ingredients -concise menu -interactive service formatCurrently has 3 locations -2 in Washington D.C. -1 in Santa Monica, California

Purpose:

To decide on the best overseas market for Chipotle to consider in order to create and establish a successful global presence.

-Achieve purpose through market analysis and country comparisons

Module 1: SWOT Analysis

Module 2: Determining Global Market Opportunity

Australia vs. New Zealand

Module 2: Determining Global Market Opportunity

Australia vs. New Zealand

New Zealand

-one of world's fastest growing populations

-72% in urban areas-growing more modern-developing a strong market economy

Australia

-population nearing 23 million-over 17 years of economic growth-geographically isolated-lack of real domestic market

Country Comparison

-Australia is more promising market to enter

-stronger population-healthier-rising incomes

Module 3: In- Depth Market Analysis

-AustraliaIncome: Recent increase leads to

increased discretionary income

Cultural Preferences: Australians have a tendency to prefer higher quality food as opposed to food that may be cheaper

- increasing preference for chicken and red meat

Module 3: In-Depth Market Analysis

Population: largest population segments represent majority of Chipotle's target market

- age 15-25= 13.5%- age 25-54= 42.2%

Foreign Direct Investment Policies: ranked as having fewest restrictions on product market, and 3rd fastest place in the world to start a new business

Module 3: In-Depth Market Analysis

Industry Growth: food service industry expected to rapidly grow in next few years-Australians developing a habit of eating out for lunch and dinner as opposed to dining in- 3.8% growth

in fast food restaurants in last year alone

Module 3: In-Depth Market Analysis

Total Market Potential: 2,116,745,232-12, 599,674 potential customers purchasing product 24 times annually (twice a week) at an average of $7.00 per purchase

Competition:-Montezuma's and

Taco Bill's- Taco Bell=Taco No

Module 4: Market Entry Strategy

Entry StrategyFranchise is the best option for Chipotle- Use cultural differences to adjust their

marketing plan Ex: Dinnertime in America vs. Australia

- Corporate may not be able to pay attention to small details, yet owners of certain locations can

Module 4: Product/Market Strategy

Large agricultural market- do not need to outsource- cut down prices

Eating out is a growing habit inAustralia

- Balance between healthy eating and eating out

- 'Grab and go' restaurant vs. what is in current market

Module 4: Pricing Strategy

Pricing of McDonald's should relate to pricing of Chipotle- Reflect that 27.9% increase in pricing

Average Chipotle Pricing- $5.25-$7.25 for a burrito in America- In Australia: 27.9% increase...

- $6.71-$9.27

Module 4: Promotional Strategy

Quality over quantity in advertising methods- ex: Back to the Start video

In Australia, 'content media'- Facebook, Twitter, LinkedIn, and YouTube- Focus in on important aspects in Australia

- ex: Charities, the environment etc...

Module 4: Distribution Plan

75% of population live in big cities in Australia

- Keep in mind the 16-30 age group- Places such as Perth and Sydney

High tourism in these cities as well- Americans visiting in Australia may look for a restaurant that is familiar

Conclusion

Chipotle has the opportunity to successfully enter the market in Australia

- Must adjust and keep in mind the cultural differences in Australia

Sources

http://theinspirationroom.com/daily/2012/chipotle-back-to-the-start/http://www.cultivatefoundation.org/abouthttp://www2.qsrmagazine.com/articles/features/138/global_growth-3.phtmlhttp://www.fool.com/investing/general/2012/11/29/chipotles-shophouse-moves-

into-expansion-mode.aspxhttp://www.ausfoodnews.com.au/2012/07/23/australian-consumers-change-eating-out-habits-in-2011.htmlhttp://www.indexmundi.com/australia/demographics_profile.htmlhttp://en.wikipedia.org/wiki/Median_household_incomehttp://en.wikipedia.org/wiki/Economy_of_New_Zealand