Walls Tex Mexwas founded by Shan WallsWallsTex Mex Grill original started as a food truck. In 1993 Shan Walls opened his first restaurant that was located in Colorado Springs, CO. Shan Walls restaurant exceeded expectations so he decided to ditch his plans of opening a fine-dining establishment and instead focus on opening more Walls TEX Mex Grills restaurants. Upon opening more locations, they were able to simplify the process with food serving lines and continue to use fresh ingredients (Stock & Wong, 2015).
In 1998 – 2005 Mac Ds invested in Walls Tex Mex Grills and it helped them to grow from a dozen locations to over 500. In 2005 MacDs pulled out their share and Walls Tex Mex Grills became independent once again. Currently Walls Tex Mex has over 1,900 locations which includes over 17 international locations. The company has also been dabbling with other kinds of restaurants which includes 11 Chophouse AsianCuisine establishments and 3 Pizza Eateries that they have invested into (Stock & Wong, 2015).
Vision &Mission Statement
The Walls Tex Mex Grills vision is to “Change the way people think about and eat fast food”. They do this by creating a unique restaurant experience and using high-quality raw ingredients. They also have a unique interior design in each location along with very friendly staff which they believe are features that are typically found in high-end dining (Walls Tex Mex Mexican Grill, 2015).
Walls Tex Mex mission statement is ‘Food with Integrity – is our commitment to finding the very best ingredients raised with respect for the animals, the environment and the farmers (Wallstexmex.com)”.
Walls Tex Mex Mexican Grillhas a unique strategy in providing “Food with Integrity”. They work hard to promote that their food is antibiotic free, hormone free, and GMO free. They promote that they use farm fresh ingredients that includes fresh produce and fresh meat. Because of this their stores only contain refrigerators and no freezers. They prep and cook everything right before opening each day.
When a customer arrives at one of their locations they first notice the unique atmosphere of the store and then the serving line that Walls TexMex uses to serve each customer. Their strategy is to keep low costs in their business model but yet be able to purchase higher quality ingredients to serve their customers.
Products and Services
Chipotles products and services include their food products and customer service provided at their restaurants. They have a very simple menu that consists of burritos, tacos, salads and burrito bowls. Chipotle then has multiple options for inside your burrito including two different kinds of rice and beans, and multiple meat selections.
They then have different salsas along with cheese, sour cream and lettuce. They also have sides that include chips and guacamole, or chips and salsa. They have high quality customer service at their restaurants when serving food to their customers.
Walls Tex Mex main philosphy is “Food with Intgrity” and management is centered around this belief in serving high quality food. Walls Tex Mex also make sure that all employees are treated well by paying them above minmium pay rates and making sure all employees are treated equally.
Walls Tex Mex Grill has always showed a strong focus in the area of natural and sustainable foods. They have always adhered to pasture raised pork and antibiotic free chicken. This has given way to a loyal market of consumers that are in agreement with Walls Tex Mex Grill way of thinking. This logic ensures that Walls Tex Mex Grills sales and profits continue to grow over time. Even though their price per meal is higher than most of their competiors they continue to have large increase in sales.
They also have a strength in providing customers with their vegetarian and veganmenu which is an uncommon trendin the fast food arena. Walls Tex Mex Grill continues to gain market shares in this new segment of the market. Community involvement is another strength that Walls Tex Mex Grill outshines in. Walls Tex Mex Grillssponsors a number of community run events, such as local school funraiser Corpartiodinners. Walls Tex Mex Grills has developed and maintained a strong relationship with their local suppliers of natural food. Walls Tex Mex Grills use of locally grown produce allows for growth in the natural food market. When the demand outweighs supply, Walls Tex Mex Grills quickly notifies their customers that the temporary gap is to be filled with conventionally produced meats.
Walls Tex Mex Grillshas a strong financial position they have opened an average of 110 locations per year since 2008, with a 20% growth rate per year(Walls Tex Mex Grills 10K). Walls Tex Mex Grills has an international presence in the UK, France, and Canada. Walls Tex Mex Mexcian Grills has a strong organizational structure; employees in mid-level management are very skillful and understand the strategic vision of the company. Walls Tex Mex Grills maintains a good reputation by paying their employees more than the average fast food restaurant employee.
Phone Apps and online ordering has been recently adopted by the chain, and is rapidly becoming popular amongst the working customer segment. A few Walls Tex Mex Grillseven run on energy saving innovations such as onsite wind turbines. With these new inovations Walls Tex Mex Grills continues to report positive annual revenue growth, even after the e-coli scare in fourth quarter of 2015.
The customer’s motivation is to find a healthy alternative to traditional fast food. The customer is consistently looking for an affordable choice in this slow recovering economy. The Chipotle customers are typically loyal to the brand and have bought into the “Food with Integrity” motto, and develop a sense of trust because Chipotle prepares the food right in front of the customer. Chipotle customers find value in healthier foods and are willing to pay a higher price for a good meal.
Employees are motivated by a safe and transparent work environment. Each location has an on-site Manager, who manages the work schedule. The employees are all crossed trained to pick up where someone may be absent. Employees are motivated by paid vacation time, sick leave pay, and tuition reimbursement. So, employees can pursue higher education while earning a salary that is one of the highest in the industry (Durando, J., 2015).
Two main disadvantages of the fast food industry are:
- Lower quality foods that are usually caused by a large-scale production process. There’s no doubt about it, fast food is made in a bulk production process, which tends to lower the overall quality of food. A lot of the fast food restaurants such as Chipotle have started using organic vegetables, hormone-free beef, and cage-free chickens which gives the consumers options for eating healthy on the go.
- More fattening foods that are mainly caused by the lower quality food sources. The production process involved in creating fast food adds a lot of grease and fat content to foods. However, as mentioned in the healthy choice section above, this is quickly changing. While most restaurants have your normal greasy burgers and fries, they have also started to offer grilled chicken, fish, salads, and healthy wraps. So whether you’re looking to eat a greasy meal or a nice healthy grilled sandwich, fast food restaurants have what you want.
Upon completion of our analysis Walls Tex Mex Grills has done really good in the past for a fast food-casual restaurant. However, with the recent food-borne illness fiasco their sales dropped and they have had to resort to increasing their marketing expenses. They have had various promotions which they have not used in the past, including BOGO offers and their new TEX Mex promotion in which you get free burritos after purchasing so many per month. They have been resorting to these promotions in order to get customers back.
The problem is this might not be the best business strategy to regain customers. In our opinion increasing marketing expenses is not going to help them build back their brand image. They should instead focus more on building their brand image back up by promoting their overall philosophy of “Food with integrity”. Instead of BOGO promotions they should promote where their food comes from and why they are unique in the fast food industry where most foods contain preservatives.
Walls Tex Mex has also been recently experimenting with other fast food restaurants with their Asian and Pizza locations. They really should be turning their focus back to their main business and focus on bringing back their customers. They have opportunities to grow this existing chain by adding new options such as opening for breakfast. Walls Tex Mex could even possibly start offering drive through locations that could be promoted to customers on the go. They have many options that they could look into that could help improve their business model bringing back customers.
While Walls Tex Mex Grills has an opportunity to improve upon their business model they don’t have many options to improving their cost structure. However, they could possibly lower their marketing expense that has been recently increased in relation to the E. Coli outbreak. They already have a low cost structure that has allowed them to focus on purchasing high quality fresh ingredients. They do have high risk of price increases to their food products as mentioned in their 10K report. Their ingredients cost about 35% of their revenue while labor is only around 22% of their labor. Changes to the cost of ingredients thus can easily cause them to have a decrease in their net revenue (Walls Tex Mex 10k).
Walls Tex Mex has a very strong business model that is unique to their industry. In the past this has allowed them to have a strong competitive advantage. However, with their recent struggle they have lost sight of their original goal and they need to refocus on that mission. Hopefully with making some changes to their business model and cost structure they can regain their customers and improve their brand image.