What to do?
Project scenario. (what is the problem domain?)
Project objective. (what goals/objectives your group try to accomplish and your suggestion ?)
What and how were they accomplished? Employ the followings
a) Porter’s five-competitive force model (and identify the two most critical forces)
b) Four-competitive strategies (which one or combination of strategies should be the most appropriate)
c) Value Chain model (how can the model help the organization improve their internal productivity
(efficiency and effectiveness).
d) How and what Information Technology should be used for the proposed solution.
Describe the managerial and organizational (and others) impacts on your project.
Conclusion. It should include suggestions, comparison, and future observations in working with this project.
Each group should make the project available on the Internet (available on one of group member’s web site)
and add others based on your creativity (with all what you learn from the class).
Group 1: Alex Bourguignon, Megan Bruno,
Calvin Go, Kelly Hawkins, Cassie Morden
2 May 2016
Table of Contents
Cover Page ..................................................................................................................... 1
Table of Contents ............................................................................................................ 2
Mexican Showdown ........................................................................................................ 3
Porter's Five Competitive Forces Model .......................................................................... 4
Value Chain..................................................................................................................... 7
Managerial and Organizational Impact ............................................................................ 8
Conclusion .................................................................................................................... 10
Works Cited................................................................................................................... 11
Back in 2014, Qdoba Mexican Grill made a bold decision by expanding their
menu to include guacamole, Fajita, veggies, and a variety of sauces for no additional
cost. It was the beginning of Qdoba’s push into a market that Chipotle Mexican Grill has
dominated for numerous years. At the time, avocado, limes, and other traditionally
Mexican food ingredients were steadily rising in price, but their decision to offer the
products for free was particularly innovative. Although Qdoba offered free condiments,
their real rise to prominence was a result of a series of scandals from their main
competitor, Chipotle. In 2015, Chipotle had an E. Coli outbreak that caused the
business to lose a large amount of customers, which allowed Qdoba to offer new
opportunities to attract customers. This business failure has created the opportunity for
Qdoba’s big break because since 1995, it has been second to Chipotle and has been
considered to be “in Chipotle’s shadow.” Due to Chipotle's business setbacks, Qdoba
has the opportunity to advance in the industry through proper business strategies.
Porter’s Five Competitive Forces Model
In response to the fall of Chipotle's sales due to the current outbreak scandal,
Qdoba has capitalized on the advantage through implementing new business
strategies. In order to take advantage of the presented scenario, Qdoba has developed
the objective that focuses on two of the five aspects in Porter’s Five Competitive Forces
Model. Industry competitors and customers are the main focus because at the given
moment, suppliers, new market entrants, and substitutes are not major concerns for
Qdoba. Due to their main competitor (Chipotle) struggling with a recent E. Coli outbreak,
Qdoba has had the opportunity to attract more customers by focusing its resources on
these forces. Through innovating new products and ingredients, and by implementing
differentiation, Qdoba has the opportunity to advance in industry competition. In
addition, by incorporating and advertising promotional deals through social media,
Qdoba can provide the incentives necessary to please and broaden its customer base.
These competitive strategies allow Qdoba to exploit the business scenario presented by
Chipotle's product scandal and fall in sales. Therefore, Qdoba must continue to expand
its form of differentiation in the industry and in customer products in order to achieve
business success over Chipotle.
As a result of Chipotle’s temporary closing, Qdoba has been able to use the
opportunity to advance in popularity in the industry and slowly start to emerge as a
strong industry competitor. Their main strategy has been focused on innovating a new,
flavorful menu with a set pricing structure that does not charge customers for extra
goods. This new and improved menu includes many choices that are not found on the
Chipotle menu such as offering breakfast, nachos, queso, and a wider range of salsa
flavors. Qdoba’s breakfast menu is actually one of the company's best kept secrets.
Although the breakfast burrito is not available at all Qdoba locations, this ‘secret’
definitely gives Qdoba an edge over Chipotle. Another signature option on the menu is
their 3-cheese nachos. Shown as one of the customer favorites, these queso smothered
chips are a clear crowd pleaser. By providing customers the option of incorporating their
signature queso in any order helps further differentiate Qdoba’s menu from their
competitors. The options are endless with three different queso flavors to choose from:
the original 3-cheese queso, fiery queso diablo, and zesty queso verde. Unlike Chipotle
who only offers four salsa options, Qdoba offers slightly more choices. These include
pico de gallo, roasted chili corn, salsa verde, salsa roja, and fiery habanero. Along with
this larger variety menu, Qdoba does not charge customers for guacamole or queso,
unlike Chipotle. In doing so, Qdoba is able to offer a more diverse selection of products
at a greater value. This method of differentiation has resulted in a steady increase in
sales over the years and is expected to continue to show positive results.
The second force that we focused on from Porter’s Five Competitive Forces
Model is Qdoba’s need to focus on its customers. One of the best ways to reach people
in today’s world is social media. Like a majority of the industry, it has a presence on the
main social media sites, but separates itself in a huge way from its biggest competitor,
Chipotle, by sharing promotions and special deals going on such as on sites like
Pandora or Facebook. Furthermore, an even better method for reaching customers is
the Qdoba rewards program. By simply signing up, you receive free chips and salsa.
Afterwards, it works like a typical rewards program; earning points leads to more free
food, birthday gifts, and also sending texts or emails with news on current promotions or
events. This is a great way to continue reaching out to customers because it helps
them keep Qdoba on their mind when they have so many options for fast food. Since
Qdoba is still second to Chipotle for a majority of customers, this E. Coli breakout is the
perfect time for them to step up their presence and promotions to get more customers
from Chipotle. Qdoba can also continue to find ways such as the rewards program and
specials to keep customers even after the scandal has died down.
The value chain of Qdoba depicts the primary and support activities involved in
the business process derived around its competitive strategy. The primary activities
include managing supplier relationships, investigating new recipes, hiring and
supporting employees, sales and marketing, and managing company resources. Qdoba
creates strong relationships with top suppliers like Tyson Foods, American Meat
Institute, and North American Meat Associated in order to provide customers with top
ingredients. These relationships are vital in the creation of Qdoba’s menu as well as
investigating new recipes, current trends and the tastes of customers. Hiring and
supporting employees is important due to the direct contact employees have with
customers through the creation of the meal. Lastly, managing the company’s resources,
in addition to inventories, allows the business to obtain an organized and successful
firm infrastructure. By analyzing the support activities, one can see the activities directly
involved in Qdoba’s process of business such as acquiring ingredients, prepping
ingredients, marketing Qdoba locations, and serving customers. Qdoba’s business ethic
revolves around serving the customer, which is implemented through new recipes and
ingredients and preparing each meal to the customer’s desires. Qdoba markets its food
chain and individual locations through social media and customer rewards program. By
pinpointing the primary and support activities, employees, customers, and investors are
able to understand the business process of Qdoba.
As Qdoba continues to emphasize both its strong and differentiated points, it can
additionally take further steps to lock-in consumer confidence or simply spread its
popularity by introducing new, possibly successful business ideas. Several new
innovations that Qdoba could potentially experiment with are having dessert items,
standardized meal deals, options for home delivery, and expanding advertising
campaigns. Because neither Qdoba nor Chipotle has invested extensive resources into
any of these possible options, it would be comparatively advantageous for Qdoba to be
the one that initiates this effort proactively, rather than react to Chipotle adopting similar
Managerial and Organizational Impact
Managerial decisions influence the business process and success of a company
due to their direct impact on the allocation and utilization of resources. Managerial
decisions involve allocating ingredients, supplies, and other resources needed to fulfill
the competitive strategy decided upon by the company. Qdoba creates partnerships
with top suppliers, such as Tyson Foods and American Meat Institute as previously
stated. Qdoba does not focus its supply on ingredients from local suppliers in order to
eliminate faults that may arise like Chipotle experienced. The managerial decisions of
Qdoba can be divided between strategic and unstructured decisions. As a managerial
team it is their duty to implement organizational strategies within the location and decide
on the necessity of introducing new ingredients or forms of business processes.
Furthermore, managerial decisions include Qdoba’s decisions involving further
marketing and media investments. These implementations are not certain, but are
determined off of past benefit. With this beneficial scenario in their hands, Qdoba has
the advantage of implementing new organizational means within each location and
increasing their competitive strategy while their industry competitors are failing. The
Qdoba Restaurant Corporation, which is a subsidiary of Jack in the Box Inc., owns and
franchises the chains of restaurants in the United States, Canada, Africa, and Asia. The
corporate executives decide the overall business process and organization of its chain
of restaurants. They then express these objectives to the managerial team and offer the
leeway of independent managerial decisions in each location. The managerial decisions
that impact Qdoba must abide by the company’s strategies of industry-wide
differentiation and customer confidence in each location in order to maintain a
consistent culture and integrity of the company.
In order to successfully achieve their competitive goals, Qdoba implemented an
organizational strategy to fulfill their overall objective. By creating a diverse menu and
offering a variety of options for customers, Qdoba is able to differentiate themselves
from their competitors. For example, Qdoba’s website has a more attractive and vibrant
layout than its competitors. The site has an easy to navigate system that allows users to
view the variety of new options on the menu. As a way to maintain a steady increase of
interest in their company, Qdoba offers a rewards system which provides customers
with a variety of coupons and deals. This style of marketing focuses on the customer
aspect of Qdoba's competitive strategy. In doing so, they encourage consumers to
return by offering free reward cards, in which customers can receive exclusive offers
and deals just by being a member. Qdoba successfully organizes their company to
ensure they continue to differentiate themselves from competitors while simultaneously
attracting more customers.
Through a solid understanding of the market, commitment to the differentiation strategy,
and smart managerial and organizational decisions, Qdoba has not only been able to
compete with Chipotle, but is also in a position to take the edge against them. Qdoba
offers an abundance of options on their menu, much more than Chipotle, which sets
them apart. Qdoba also got a lucky break; because of the health scandals of Chipotle,
Qdoba took advantage using a smart strategic plan through the rewards program and
marketing events to get customers in the door. To be successful in the long-run,
companies need to have a structured system starting with knowing their competitive
strategy. Then, on the individual level, they should follow the value chain to stay with
their successful direction of differentiation. We would advise Qdoba to continue their
rewards system and outreach to customers via social media and the introduction of new
menu items, such as desserts, to keep their lead on Chipotle with regards to menu
options. With Qdoba extending their customer base and keeping it interesting and their
restaurants running smoothly, we believe they can maintain their growth and rising
Johnson, Hollis. "I Compared Chipotle's Food to Another Major Mexican-food
Competitor - and the Winner Shocked Me." Business Insider. Business Insider,
Inc, 14 Oct. 2015. Web.
La Monica, Paul R. "Chipotle Loses to Qdoba in Burrito Stock War." CNNMoney. Cable
News Network, 21 Oct. 2014. Web.
Oyedele, Akin. "Chipotle Shares Are Tumbling after E. Coli Reports in 2 States."
Business Insider. Business Insider, Inc, 02 Nov. 2015. Web
Watrous, Monica. "Qdoba Crawling out from 'shadow of Chipotle'" Food Business
News. Food Business News, 14 Jan. 2015. Web.
Rincon is a local Mexican restaurant that is just outside of campus, but students do not
enjoy their food; therefore, the business is struggling. A former Zag, Pablo, who for years hated
Rincon decided to do the students a favor and renovate it in order to attract students to a
restaurant that is fun but also has great food. He decided to change the name of Rincon to Taco
Zags to make it more desirable to students. This alumni knows that Spokane does not have a
strong market in Mexican food so it is likely that a great Mexican restaurant will have a booming
business. Pablo has a secret recipe that his family has been passing down for generations and it is
so good that it will attract people from all over the county and the regions surrounding it. The
signature dish will be the carne asada, which has a secret rub. Taco Zags not only plans on
having exceptional food but also having the entertainment to help bring in more college students.
On Thursday nights they will have Karaoke night, which zags have notoriously loved and on
Saturday nights a live band will be playing for entertainment. You may be wondering why there
is so much entertainment at a restaurant, well that is because it is also a bar that will have the
best margaritas in Spokane for students that are of age.
Supplier Power- Rincon Tapatio outsources ingredients from different countries. The
suppliers of these ingredients are able to change their prices based on supply and demand. The
fewer suppliers out there, the fewer options Rincon has to choose from to get their products.
Buyer Power- Customers buy depending on prices. Rincon has comparable prices in
order to keep customers interested and satisfied.
Competitive Rivalry- In Spokane there are a decent amount of Mexican restaurants but
none that stand out above the rest. The taco truck is in closest proximity to Rincon but is unable
to accommodate many hungry guests at one time, unlike Rincon. By having lots of sit-down
room, with tables varying in sizes for all different groups, Rincon is able to feed more people at
one time. Some of the other sit-down Mexican restaurants in Spokane have age restrictions;
therefore, underclassmen from Gonzaga are unable to attend until they are of age. Rincon is
family friendly for all age groups.
Threat of Substitution- While Rincon may not have the best-tasting food in town, it
knows how to stand out in other ways. Rincon keeps its uniqueness by promoting their specialty
drink, The Fishbowl. College students come from miles around in order to get their very own
personalized Fishbowl. The drink comes in five different flavors so the consumer never gets tired
of the taste. Other restaurants cannot compete because Rincon has done so well in promoting this
Threat of New Entry-The threat of a new Mexican restaurant being established is pretty
low because there are already many others and the cost would be significant to start from scratch.
Spokane also isn’t known for Mexican food and people don’t directly come there for it. A new
Mexican restaurant would be overlooked very easily.
Porter’s 4 Competitive Strategies:
Focus differentiation- At Taco Zag’s the best quality ingredients are used. Food is made
fresh to order every day. Also, only fresh products and ingredients are used. Beef is never frozen,
unlike other competitors. Better quality ingredients are used than other competitors.
Industry-wide differentiation- Taco Zags is different than other Mexican restaurants
because its main customers will be Gonzaga students, so this restaurant will have a mainly
college environment. In addition, because of the wide population of college students and
professors that attend the restaurant, there are many special deals and discounts for them.
Cost differentiation- The prices at Taco Zags are comparable to our competitors, but the
quality ingredients allow this restaurant to sell its food for the same cost as our competitors who
are selling lower quality meals.
Cost leadership- The cost of operating our restaurant is cheaper than our competitors
because it runs very efficiently. The technology used is one of the highest quality; therefore,
making the food is quick and efficient. For example, there are top-notch machines which warm
the tortillas and fold the tacos and burritos. It is also cheap because the machines which make the
food are already paid for, and few workers are needed to operate them. Mainly college students
are hired, and they are willing to work for cheap.
Value chain refers to the activities or the processes that a company undertakes in order to
add value to its products or services. Such activities range from the first stage in production to
the marketing of the products. There are various elements that constitute the value chain of every
product or every service being offered. The first elements that would be most useful in the
restaurant would be the infrastructure. When clients visit Taco Zags, they will find the kind of
infrastructure in the hotel, for instance, the sitting spaces and the restrooms. In addition to being
convenient, the infrastructure of Taco Zags is adequate to serve the customers who visit the
restaurant at any given time.
Taco Zags is going to focus on mark ...
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