Case Abstract
Chipotle Mexican Grill, Inc. (CMG) was a Denver, Colorado-based chain that competed in the fast casual segment of the restaurant industry. The chain offered a range of Mexican food items in its 1,316 restaurants, which were predominantly in the United States. Founder and current co-CEO, Steve Ells had emphasized not only good tasting food but also a commitment to sustainability early on in the company’s history. The chain’s mission was “Food with Integrity,” which captured its commitment to both the environment and people. CMG positioned itself as a differentiator, using both food quality and a commitment to sustainability as factors that isolated the company from its competitors. However, in 2012 the company faced a number of challenges. A competitor from a different segment of the restaurant industry, Taco Bell, had launched a new line of menu items aimed directly at CMG. In addition, food costs were increasing and CMG was hard pressed to both control input costs and find suppliers who adhered to the company’s sustainability-based sourcing policy. In the most recent quarterly report, the company had indicated a slowing down of same-store sales. A hedge fund investor had recently called for shorting the company’s stock because of the impending problems. CMG’s two co-CEOs, Ells and Montgomery F. Moran, had to decide on the best course to confront these challenges in the backdrop of a free-fall in the company’s stock price.
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