TJ LowdenKathy WangOnkar KapoorBryan Jolly.ppt

TJ Lowden Kathy Wang Onkar Kapoor Bryan Jolly Bangalore Burrito(Coming to a New Delhi Near You) STRT 571 – Final Project Chipotle: Moving to India Company Overview 22,000 Employees $1.3B Revenue / $140M Profits 25% Average YoY Revenue Growth over last 5 Years First International Expansion: April 2010 in London Analysis of Expansion into India Decision: Go (with the Right Partner) Strategy Risks Profitability $10M Initial FDI 40% Contribution Margin 8-Year Breakeven Point 12.5% Return on Investment “Few Things Well” Use 49/51 Joint Venture Two Locations New Delhi Bangalore JV for Social and Legal Risk Mitigation Controlled Political and Technological Risks Volatile Rupee: 39 to 51 Strategic Fit ID Key Resource Improvement Strategy 1 Marketable Cuisine Adapt menu to address demographic 3 Brand Improve brand awareness in India with similar US promotions 8 Business Acumen Improve via strong JV partner for expansion into right markets and conduct business operations USA India Consistent Key Strengths: 2) Financial Stability; 5) Available Capital; 7)Restaurant Efficiency FDI Assessment Recent Recession reduced FDI in India Increasingly Open Capital Flows Managed Floating XR RBI Controlled Monetary Policy * Expansion poses risks but they can be managed with the “Right” JV Partner Risk type Mitigation Plan Implications Risk Analysis and Mitigation Questions? * * Census Data (Exhibit 3) Income Statement (Exhibit 2) Pricing Analysis (Exhibit 1) Chipotle Foreign Direct Investment Population Revenue Stores Chipotle Financials (taken from 2008 Annual Report) p. 24 p. 27 Revenue per Store Expenses Food, Beverage, Packaging Costs Labor Costs Occupancy Costs Total Expenses Expenses per Store Source Geographic area Population estimates /popest/metro/tables/2009/CBSA-EST2009-01.csv Abilene, TX Akron, OH Albany, GA Albany-Schenectady-Troy, NY Albuquerque, NM Alexandria, LA Allentown-Bethlehem-Easton, PA-NJ Altoona, PA Amarillo, TX Ames, IA Anchorage, AK Anderson, IN Ande