According to the article, 'Are you sure you have a strategy?' Hambrick and Fredrickson demonstrate how over the years it has been difficult to come up with a perfect definition of the term strategy (Hambrick & Fredrickson, 2005).
The term strategy is that it should be one containing the five elements which are arenas, vehicles, differentiations, staging and economic logic (Hambrick & Fredrickson, 2005). In arenas, the key question should be 'where will we be active?' or 'what will we be active in?' Once this question is asked, the business should think in terms of specificity as concerns the products or market in order to come up with a clear strategy (Hambrick & Fredrickson, 2005). Chipotle has these concerns in mind by ensuring that the products used in the restaurants are of a high quality by having only the best quality ingredients used to provide quality meals and that they capitalize on markets by having stores across the country (Steverman, 2010). The geographic areas also matter as After addressing arenas the next step is deciding on how to get there and this is where the element of vehicles comes in. the business has to come up with strategies on how to attain what it has laid out in the arena element (Hambrick & Fredrickson, 2005). Differentiations give a business the opportunity to specify how they win in the marketplace by learning how to get customers to come their way after the strategy has laid out the elements of arenas and vehicles (Hambrick & Fredrickson, 2005). Chipotle clearly has this on lock as they are described as having the ability to drive customers through their doors every year even with the economic crunch (Steverman, 2010).
Arenas, vehicles and differentiations are basically what executives plan to do. However staging is required in order to determine the speed and sequence of the major moves to be undertaken so as to achieve heightened success (Hambrick & Fredrickson, 2005). Economic logic comes in as the final element in what a strategy should contain. In considering this element, the business comes up with a comprehensible idea on how to reap profits (Hambrick & Fredrickson, 2005). The profits in this case should not be the ordinary profits but should be those that are above what the business invested - the capital (Hambrick & Fredrickson, 2005). One of the ways Chipotle has achieved this is by having a large number of outlets across the country and even hopes to add to this number. However having many outlets does not necessarily mean attaining profits. To ensure that profits are brought in, Chipotle came up with an advertising strategy whose slogan was "food with integrity". By focusing their attention on investing in and providing quality food, Chipotle is assured of having customers throughout and in turn generating high revenues (Steverman, 2010).