Counter-Intuitive Locations Will Lead to Bluer Seas
An important way to target groups willing to trade up in price is to locate more stores in demographic areas that have high concentrations of these buyer groups.  While this sounds obvious, the tactics of this strategy for Chipotle’s value proposition are counter-intuitive.  Restaurant industry logic typically clusters competitor outlets in similar and close proximity. Running counter to this logic, Chipotle would be better suited near a mid-range restaurant, rather than near a fast food restaurant. Likewise, it should strategically positioned and pitched as THE "mid-range" option among fine and upscale dining establishments, not the "expensive" place passed by the fast-food strip.

How to Out-Maneuver Three Major Types of Restaurants
For all three of these types of restaurants, the Blue Ocean Value Canvas diverges favorably for Chipotle.  The fast food restaurant will be irrelevant because it won’t be in proximity, the mid-range restaurant will lose twice on price and quality, and the fine dining restaurant will be beat via a trificta of convenience/speed, price, and value.  The trick is that the buyer group who is willing to trade up price for quality will also act as an enabler to create a new restaurant categorization and value proposition. 

Winning Through Strategic Day Part Offerings
Within these demographically-favorable locations and near these up-scale restaurants, Chipotle must continue to target the lunch times and early evening/pre-dinner times. For lunch times, they should stick to their guns of high food quality/minimum service, and focus on value to retain repeat customers. This is particularly important for their restaurants located near corporate corridors and education centers. For evenings, pre-dinner should offer an indirect “flank” to direct head-to-head competition with the fine dining establishments.  During the day, Chipotle can increase offerings – not necessarily service – by expanding the menu items for higher-end food and maybe even cocktails (they already offer beer).  Can you think of some other types of offering which you think Chipotle could do?  How else do you think Chipotle can expand it Blue Ocean?

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Mike Bolden marketing expert and blue ocean strategist - writing to inform, enlighten, and inspire.  Author of forth coming book, "Owning Marketspace".  Available for consulting and speaking engagements.