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Chipotk Mexican Grill started in 1993 with a single restaurant and now operates in 2.400 locations, including in Canada. England, France, and Germany. The fass-food chain had approximately 60,000 employees and revenues of $4 biltion in 2017153 Steve Elis founded Chipotie and served as its CEO until 2018. Ells wanted to differentiate his lrand from that of other fast-food chains, so he focused on fresh, high-quality raw ingredients free of antibiotics and pesticides. Meals were prepared using classic cooking methods and were served in chooseyourown style so diners could get the individual ingredients they preferred. 154 Then the company's growth and profitability were stunted by oetbreaks of foodborne illnesses. Customers were sickened by E. colli, nocovirus, and salmonella at dozens of Chipotle nestaurants around the United States between 2015 and 2016.155 The restaurant's stock never recovered as shares fell nearly 60 peroent between 2015 and 2018 . 156 Let's cxamine what led to the burrito maker's fall from grace. AS CHIPOTLE GREW, SO DID ITS PROBLEMS Chipotle rose to greatness because customers were offered a traightforward set of options, food was prepared on site in an open kitehea, and diacrs felt they were eating something healthy. The company had success with this model carly on, but the system started to crack as Chipotie grew. Inconsistent food preparation was the first stressor. The open kitehen proved a diffcult model to seale, and poor food handling most likely led to the outbreak of foodborne iltness. According to the Chicago Tribuure, "Chipotle has been growing too quickly, and withoat a game plan." The restaurant chain was plageed by inconsistency and incfficiency 157 Foodborne allinesses continued to hatint it almost two years after the initial outbreak. In 2017 . "The ratc of food poisoning reports attributed to Chipotie continues to be multiples higher than peers." said Business Drisider. 158 "These statistics are especially troubling for a brand that prides itself as providing "Food with Integrity." The restaurant's menu reflects another crack in its vision and strategics. Chipotie offers burritos, tacos, burrito bowks, and salads. This simple menu attracted customers for ower a decade but is now scen as "stale," according to an analyst with the Tribume 159 Ells began offering queso in September 2017 in an attempt to spice up Chipotie's mens. The results were not promising. Only 15 percent of orders included queso, compared to the 40 percent of orders that included guacamole. Buidmess lisider reported that queso-related traffic died off after peaking the first week the new item was available. 160 These problems have ereated opportunities for other fast-casual restaurants such as Qdobu and Moes, which are opening locations all over the United States. According to a UBS analyst. ".. , these concepts are exhibiting signiffeant growath rases while also increasing competition for attractive market/site selection." Chipotle's once unquestionable market leadership is on shaky groend. CHIPOTLE'S NEW CEO WAS SUCCESSFUL AT TACO BELL Chipotle named Brias Niccol CEO in 2018. Niccol had been Taco Bell's chief marketing otticer from 20II to 2015 before taking ower as its CEO. 161 He was hired at Chipotle because of the successful tarnaround he had overseen at Taco Bell A disgruntled customer had filed a lawsuit in 2011 alleging Taco Betl's taco misture was more filler than beef. The suit was later withdrawn, but it took a toll on Taco Bell's reputation and sales. Niccol's change efforts focused on repositioning the chain as a youthful lifestyle brand. He did this by welcoming ideas from restaurant employees and introduced new menu itents, including breakfast. 162 These changes produced impressive results. Taco Bell posted an average of 4 pereent sales gromth during Niccol's time as CEO163 The fast-food chain also beat out Pizza Hut and KFC as the most successful restaurant in the Yum Brands portfolio, U64 CHIPOTLE'S NEW CEO WAS SUCCESSFUL AT TACO BELL Chipotle named Brian Niccol CEO in 2018. Niccol had been Taco Bell's chief marketing officer from 2011 to 2015 before taking over as its CEO. 161 He was hired at Chipotie because of the suceessful turnaround he had onerseen at Taco Beil. A disgruntied customer had flled a lawsut in 201l alleging Taco Beil's taco mixture was mone bller than beef. The sait was later withdrawn, but it took a toll on Taco Bell's repotation and sales. Niccol's change efforts focused on repositioning the chain as a youthful lifestyle brand. He did this by welcoming ideas from restaurant employees and introduced acw menu items, including breakfast. 162 . These changes produced impressive results. Taco Bell posted an average of 4 pereent sales growth during Niccol's time as CEO43 The fass-food chain also beat out Pizma Hut and KFC as the most successful restaurant in the Yum Brands portfolio. 164 NICCOLS CHALLENGE AT CHIPOTLE Niccol faces three challenges at Chipotic. The first is the menu and poteatial resistance to changing it from the company's senior leadenship. The second is increased competition taking advantage of the comapany's past problems. and the thind relates to Chipotle's food preparation peactices and their contribution to foodborne illness. Niccol first needs to address Chipotie's menu problem. According to a CNMMower analynt, "They need something that gets people talking abour the brand again. " The analysu says that Chipolle should consider adding new menu items such as nachos or frozen margaritas. Niccol may be positively dispored to this suggestion because he was also the architect of Taco Bell's positive move to offer becalfast and Doritos Locos tacos. 165 Other analysts have concerns about the company venturing too far from its cote offerings. ti6 Those who are skeptical about changing the menu isclude Chipotle's founder and current executive chair. Steve Elis. Ells still yields significant power and is known as a handyoo leader and prrfectionist, according to The Wha Smert Joumal. "167 He told The Nere loek Theres, "Tt's not like you san put a whole new thing up on the menu board and-like at a typical fastfood place." BSs This view is supported by Ells's earlier stratepic fallure of adding gueso to the menu. Niecol is likely to experience resistance to some of his ideas because Ells does not believe Chipotle is like Taco Bell. Chiposie is more vulaerable to sipplien" changes in the price of isems swch as avocados and chikken. Other fast-food brands can posin increased costs to franchises-something Chipotie does not have. Ells also refuses to compromise on quality as part of any change. - I don't think you're going to see a situation whene someone says. 'To hell with food with iategrity. We're goiag to buy cheap commodity meat now and really turn this thing around," he told the Times. 164 Chipotic's second challenge is increased competition. and the bigect threat here is Pancra. Panera is outside Chipotle's cuisine niche, but it is compctiot with its promise of fresh, additive-free ingredients. It also has an cxhaustive menu that rotates seasonally. Chipotie customers who are tired of its "bigfour" menu will easily find a Panera nearby, Bundiness basider reports that 87 percent of Chipotles compete with a Panera Bread within a 10minute drive. 170 Niccol will have to do more than change Chipotle's menu if he wants to compete with Panera. He needs to addeest his third challenes, which is stopping people from getuing foodlorne illnesses at his restaurants. The new CEO mighe actomplish this by slowing the chain's gnomth and focusing on safer operations. For example, each or Chipotle's approximately 2,400 locations does its own prep work, such as washing lettuce and chopping tomatoes. 171Although this practice is part of Chipotie's operational vision. an anabys from the Thibume suggested that "IClipotle managers have] to keep to their core values. . but aeed to find a way to be more consistent and efficient." The analyst recommended that Chipotle wash and prep food in a central location and send it oat to nearby stores. 172 Such a food preparation change will signifficantly alter Chipotle's restaurant structure. Custonters may no longer walk into a restaurant and sce employees grilling meat and ehopping vegetables behind the food line. This setup has been part of the chain's vision and heritage and repoesents something Ells holds near and dear. "Niccol will likely tace an uphill battle in uprooting some of that heritage, as be's stepping into a fole occupied by a foceder for the 4. How could Niccole innovate Chipotle's products and processes? Be specific and realistic by considering the costs of innovation and various stakeholders (e.g., customers, competitors, internal stakeholders, etc.)