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) StrategyRisksProfitability  $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 IDKey ResourceImprovement 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

5 Expansion poses risks but they can be managed with the “Right” JV Partner Political (low) Local Government Corruption leading to unfair treatment of foreign entities Diversify to different states Enter with JV partner familiar with India politics. Legal (med) Bureaucracy and lack of FDI policy transparency leads to failed entry Utilize JV partner familiar with Indian policies and methods to handle bureaucratic layers. Currency (low) NR/USD XR Fluctuations lead to higher investment than anticipated Establish local supply chain. Limit currency risk exposure to initial investment. Social (med) General social and cultural acceptance of the type of cuisine Adapt menu to cultural tastes and preferences Leverage relationship with experienced JV partner. Risk typeMitigation PlanImplications Risk Analysis and Mitigation

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