Internationalization Proposal

Andrew Hagerty, Sakib Hussain, Sheila Plvan, Rachel Wieboldt

❏ Founded in Denver, Colorado in 1993 by Steve Ells

❏ Changing the way people think about fast food

❏ An alternative to traditional fast food restaurants

❏ fresh, fast, healthy Mexican food

❏ “Food with Integrity”

Company Background

Finance and Growth

❏ Steadily increasing revenue and net income

❏ Over 1,700 locations in five countries

❏ Diversified product line:❏ catering❏ ShopHouse Southeast Asian Kitchen

❏ Pizzeria Locale

❏ Large customer base

❏ appreciation for Chipotle’s flavors

❏ fast food friendly lifestyle

❏ Agriculture-friendly economy❏ opportunities to build relationships with local farmers

❏ Favorable market analysis

Expansion to India

❏ Constraints and tensions due to religious caste and linguistic circumstances

❏ Riots between Muslims

❏ Indians seek to build relationships

Political Analysis

Legal Analysis

Legal Analysis

❏ Reactive structure

❏ Police determine outcome of crimes

❏ Public needs to get more involved

Economic/Financial Analysis

❏ Tremendous growth over last 10 years

❏ Last 3 years has seen minimal increase

❏ Lack of good infrastructure

❏ New prime minister to change things

Cultural Analysis

❏ Meek and quiet personalities

❏ Get point across without being overbearing

❏ Sincere people

❏ Close knit families

Market Analysis

❏ Most families eat out for holidays and special occasions.

❏ People of high income and under 30 eat out at restaurants frequently.

Internal Analysis

Goals and Objectives❏General❏International

General Goals and Objective❏ Find the highest quality fresh ingredients for great tasting food.❏ Recruit and retain top performing employees for consistency in

service. ❏ Building restaurants should be operationally well-organized and

visually attractive.❏ Get ingredients that are grown properly with concern for the

environment, animals and people associated with it.

International Goals and Objectives

❏ Maintain all the General goals and objectives.❏ Steady growth of sales. (15% for each of next 5 years).❏ Employees that are hired should be fluent in English as

well as local Language to maintain customer service standard.

❏ Open at least 50 outlets in next 5 years and each should comply with all the general goals and objectives.

Internal Analysis - Strength❏ Strong Brand Reputation for ethical and quality food

provider.❏ Strong ownership on all outlets hence better control

over operations.❏ Strong organizational structure from Top management

to sales employee.❏ Steady growth in financial statement. Percentages in

asset over liabilities are very high.

Internal Analysis- Strength❏ Already has International Presence in France, Canada

and UK which provides experience for future expansion to India.

❏ Not many competitors have established in Indian market. Only Taco-bell has outlets in India.

Internal Analysis- Weakness

❏High Price of Food Items

❏Lack of Marketing

❏Lack of variation in Menu Items

Entry Modes

Entry Modes

Joint Venture

Exporting

Direct InvestmentLicensing

Organizational structure(Divisional)

Product adaptation

❏ Cultural Similarities

❏ Similar Food Taste

❏ Familiar Service

❏ Fast food Love

❏ Affordable Luxury

Timeline❏ Research

❏ customer tastes and preferences❏ store location and supply chain setup

❏ Implementation❏ staffing❏ evaluation

❏ Follow Up❏ more evaluation❏ further expansion

❏ Since the company’s IPO in 2006, Chipotle has received funding through stock sales and retained earnings. No dividends are paid out; the company prefers to retain its earnings as a way to finance its operations and expansion.

❏ Cash and short-term investments are used for expansion, operations and maintenance.

Funding

Funding❏ Chipotle tends to keep financing under complete

control, so in order to maintain this they would need to effectively manage their approach to the Indian market.

HR Systems ❏

Chipotle, like any company should, views its employees as an asset. Without a strong team, Chipotle would not be nearly as successful.

❏There is significant internal upward movement at Chipotle. “More than 80% of their management positions are filled from internal promotions” (Van Tan).

HR Systems❏ Chipotle also has an ethical staffing policy and pays

living wages and benefits that are considered fair.

❏ This domestic approach has been applied to its international locations, with success that has established Chipotle overseas.

HR Systems❏ Managers are sourced from the United States to train

the overseas team and give them the tools they need to succeed. This shows constant employee development.

❏ Chipotle creates a culture that is both supportive and developmental for all of its employees.

Research and Development

❏ No R&D in existing international locations❏ Chipotle’s product is standardized across the globe

❏ Opportunity in India❏ Religious dietary restrictions

❏ New testing and research facilities

❏ Willing audience

Marketing/Advertising Approach

❏ Innovation and creativity

❏ Low cost, high impact strategy

❏ Target market: millennials❏ social media

❏ YouTube channel

❏ video games and apps

Marketing/Advertising Approach

❏ Promoting values through marketing:

❏ Cultivate Festivals brings locals together

❏ Cultivate Foundation raises awareness and funding

❏ Strategy determined by headquarters

❏ little local control or decision-making

❏ To ensure high level quality and service:❏ financial evaluation

❏ “mystery shopper” program

❏ customer surveys

❏ open lines of communication

Control and Evaluation Systems

Conclusion

❏ Chipotle’s expansion to India:❏ allows the company to take advantage of internal

strengths while mitigating weaknesses❏ can be carried out using existing procedures and

strategy❏ will introduce the company to a huge customer base❏ will open up possibilities for further Asian expansion