Chipotle's Competitive Strategy

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In class on Tuesday Dean Turek described three competitive strategies: (1) cost-leader, (2) differentiation, and (3) focus. Being a food lover, I thought I'd find a way to give real-life examples of popular restaurants that use this strategy. Cost-Leadership First and foremost there is the cost-leader. The cost-leader's business strategy is to focus on lowest prices all around. A perfect example of this in the restaurant business is the fast-food giant, McDonald's. Almost every facet of McDonald's is designed to keep prices as low as possible.The company achieves this by maintaining an excellent supply chain and by keeping labor costs low. With McDonald's being the largest restaurant chain in the world, its access to suppliers and ease of supply-chain is parallel with Wal-Mart (perhaps the quintessential example of a cost-leader). In addition, McDonald's hires and trains inexperienced employees rather than professional cooks. Operating an average McDonald's does not take the skills required for any sort of advanced degree, and therefore McDonald's employees and be hired, trained, and paid a small salary (normally…show more content…
A company that does this well is Chipotle. The company manages to place an emphasis on being different from its competitors. When you click on the Chipotle homepage, the first thing that pops up is a picture of fresh ingredients -- tomatoes, onions, cilantro -- and bold text that says "WHOLE OR NOTHING -- SEE HOW WE'VE RESPONSIBLY RAISED THE BAR." The company prides itself on offering "food with integrity." Their ingredients are locally raised (GMO free) and prepared by hand. And consumers are responding well. Even though an average Chipotle Burrito is a whopping 1000 calories (and the McDonald's Big Mac is 563 calories), consumers still flock to Chipotle because the company has done such an impeccable job at differentiating itself from
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