This case, developed primarily from secondary sources, describes the founding of Chipotle Mexican Grill (Chipotle, hereafter) in 1993 by Steve Ells and its rapid ascent to popularity as a fast-casual restaurant based on its unique socially responsible Food with Integrity strategy. Under the leadership of founder-CEO Steve Ells and co-CEO Montgomery Moran, Chipotle outperformed the S&P 500 as well as its rivals since its IPO in 2006. However, in 2015, the multiple food contamination outbreaks reversed its course, plunging its stock price to an all-time low. In spite of the prompt actions taken by Chipotle’s leadership, the company’s stock price did not regain its pre-scandal highs in the stock market. However, on September 6, 2016, news of activist investor, Bill Ackman’s purchase of 9.9% of Chipotle’s stock gave a much-needed boost to Chipotle’s depressed stock. This case gives students the opportunity to step into the shoes of a young individual investor, Michael Jacobs, to assess the potential impact of Ackman’s investment on the company’s strategy and performance and decide whether or not he should divest his Chipotle holdings.
|Authors||Vijaya (Narapareddy) Zinnoury|
|Institutions||Daniels College of Business
University of Denver, USA
|Key Words||CSR, Socially Responsible Investing, Environmental Performance, Social Performance|
|Courses||Sustainable Finance, Strategic Management, Finance, Business Sustainability, Business and Society, or Environmental Entrepreneurship|
|Target Audience||MBAs, Undergrads|
|Permission rights||This case will be published at the Case Centre shortly. You find an inspection copy for download below.|