Read the attached Chipotle: CASE 10
Then start the write up and follow the below instructions:
Executive Summary: One page only? should be written after finishing the whole case analysis
Introduction and major strategic issue: One short paragraph
Analysis of External Environment:Pestel, Porter’s five forces and key success factors (KSF) in industry: Two-page limit
Analysis of internal environment: State the major business strategy for Chipotle. What are its core competencies? Half page limit
SWOT: Half page limit. Chart is OK.
Value chain analysis: Describe and integrate with core competencies: One-page limit.
Financial analysis (in an appendix as table; relevant information should be integrated in SWOT to avoid redundancy), See next page for instructions: One-page limit.
Analysis of competitors- weighted competitive strength assessment (Table 4-4, Chapter 4; ensure that the KSF are used for the dimensions) One-page limit.
Read supplement materials if needed? (Book name: Crafting & Executing Strategy, 20e, by Thompson, Peteraf, Gamble and Strickland- chapter 4)
What action recommendations would you make to CMG’s top executives to strengthen the company’s growth? Discuss pros and cons of each recommendation. Make sure to draw on concepts from Chapter 6 and financial analysis to support your recommendations. Finally, in ½ paragraph, describe the key strategy learnings from this case that you can apply to your university. Three-page limit for the recommendations + learnings, section.
Financial Analysis (2007-2013): CHIPOTLE: Review Financial Exhibits; Read Table 4.1 in Chapter 4
1. Calculate CAGR (Compound Annual Growth rate)
{[{Ending value/Beginning value} to power 1/n] -1] * 100
A. CAGR for revenue growth
B. CAGR for Operating income
C. EPS
D. Average annual sales
2. Calculate each expense as a percentage of Revenues (Food, Labor, etc.).
3. Calculate operating income margins and net income margins. See number 4 below (ROS)
4. Calculate profitability ratios: ROS, ROE, ROA,
5. Calculate liquidity (current) ratio: CA/CL
6. Calculate Working capital CA-CL
7. Calculate leverage ratio: Total liabilities or Total long term liabilities/ Total Shareholders Equity
8. Calculate CAGR for net cash from operating activities
9. Calculate CAGR for net cash from operating activities after subtracting capital expenditures from net cash
10. Calculate Times-interest earned ratio
11. Calculate Comparable restaurant sales increase
12. Review “Restaurant data” in Exhibit 1 (page C-143), interpret, and integrate in your analysis.
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