In 2006, McDonald’s sold Chipotle. Since then, Chipotle has become fast-food equivalent of the iPhone. Indeed, I don’t eat at Chipotle mostly because every time I go by, the line is so long you’d swear they were paying people to eat their burritos. So it isn’t surprising that Business Week recently lambasted McDonald’s for their foolish decision.
But I’m not convinced it was a bad decision for 2 reasons:
1. Strategic focus is an investment. On paper (with 20/20 hindsight of course) it looks like a colossal failure of a decision. McDonald’s cashed out on Chipotle for a measly $1.5 Billion. Eight years later, Chipotle is worth an estimated $13 billion. I’m no finance whiz, but I can see that 13 is in fact more than … [ Read More ]