Nandos Business and Marketing Operations - Case Study Example

Nando’s Marketing and Operations AFFILIATION: Introduction of Nando’s Nando’s is recognised as a South Africa based restaurant for offering a casual dining experience to the customers. It originated from the community of Mozambican-Portuguese to offer the chicken lovers a range of various flavours. It was established in 1987 by Robert Brozin and Fernando Duarte in South Africa under the name ‘Chickenland’ and later the name was changed to Nando’s. In order to attain a distinctive position in the industry, the three basic areas which are capitalised by the restaurant are friendly staff, fresh and hygienic meals and marvellous customer service (Nando’s, 2014). One key differentiation is the peri-peri sauce which is the trademark of the well-known brand. The cornerstone principle behind the entire system and concept of Nando’s is to gain recognition as the global brand which delivers value, quality and commitment to the customers on a consistent level. It has utilised the different taste of the peri-peri sauce in the flame grilled chicken which is complimented by the fun, friendly and warm environment. Currently, it has more than thousand outlets in about fifteen destinations with primary focus in Australia, South Africa, Middle East and United Kingdom (Brown, 2013). Since it specialises in flame-grilled peri-peri chicken, it has augmented into burgers, wings, salads, pitas and wraps along with top ranked Espetada and Cataplana (Joseph, 2013). The restaurant industry is mainly divided into three segments i.e. quick service, casual dining and pub restaurants. Nando’s is considered to be a leading brand in quick service and casual dining divisions as it makes sure that it presents its customers with an excellent dining experience in the shortest possible time. For Nando’s, quick service and superior quality meals are the core elements to achieve a competitive edge in the market (Nando’s, 2014). Product/Service Life Cycle In order to assess the position of the product or service in the respective industry, it is crucial to determine the stage of the brand in the product/industry life cycle (Harrison & Van, 2011). With the help of this framework, a company can make sure that it develops its strategy effectively and it can even successfully attain the desired objectives. The restaurant industry is still in the growth phase due to increasing competition and accelerating number of the new entrants. However, Nando’s is in the maturity stage because it has to develop extension strategy on an ongoing basis so that it can offer something unique and innovative to its customers. Initially, it offered only flame-grilled chicken in three varieties i.e. quarter, half and full chicken. With the advent of time and changing customer choices, the brand moved ahead with the salad and sandwiches lines. For further enhancing the customer loyalty, it included wraps along with desserts in its menu. Hence, it has commenced loyalty programs so that it can reward those customers who give priority to the brand’s available choices (Joseph, 2013). Nando manufactures a diverse range of sauces which are sold in its outlets and various supermarkets on global level (Brown, 2013). All of these evidences are proof of the company’s clarity about its long-term vision and marketing strategy for reinforcing the leading reputation in the market. SWOT Analysis Strengths Strong brand name with presence in more than 15 countries Competitive edge in peri-peri flame grilled chicken Strategic business model i.e. franchising which has supported its global expansion plan Freshly and hygienically prepared meals Quick and exceptional customer service Robust marketing campaigns Weaknesses Too much reliance on word-of-mouth marketing activities Lack of organic and vegetarian menu items Increasing employee turnover Unable to develop new products in meat category Opportunities Expansion into new countries Trying out unique recipes and flavours for customers Entering into organic and vegetarian customer segments Offering home delivery service Initiating E-commerce website Threats Rising costs of raw materials can lower profit margins Weak economies means less customer spending on dining out options More focus on healthy and home prepared food items Intense competition from existing and prospective brands PEST Analysis In addition to SWOT analysis, it is vital to carry out an in-depth assessment of the macro environment so that Nando’s true picture is developed. PEST analysis is a useful tool utilised by the enterprises to evaluate the factors which can impact their business functions (Matupolus et al., 2007). PEST analysis of the global restaurant industry is given below: Political factors Nando’s has been expanding its operations in those regions where there is political stability. It has to make sure that both government and legal authorities have positive outlooks so that it can be assured that there is tight security within the regions (Johnson, 2013). Till now, the company has not encountered any legal or critical situation in the destinations and it has been employing franchising strategy so that it has to take minimum amount of risk. Economic/ Environmental factors Since the economic recession in 2008, the economies on global level are getting better. Almost all the developed countries have become stable and they have made sure that there GDPs are above 10% so that they can provide their citizens with favourable living conditions. According to Mintel (2012), the customers are looking for food items which are healthy and prepared from organic ingredients. It has been reported by Mintel (2013) and Whitcher (2014) that there will be more demand for chicken as beef prices are soaring up. Likewise, the customers prefer to dine at full service restaurants rather than the fast food or casual ones as they can make the best decision from a wide range of choices. Social factors The latest trend in the restaurant industry is of organic and healthy food items as the customers have become health conscious. Recently, it has been observed that the customers prefer to utilise those items from the menu which will fulfil their desire of having a meal with low calories. It has been reported by Mintel (2013) that majority of the population worldwide is of millennial aged in between 18 to 34 years who like to dine out with family and friends on a frequent basis. Technological factors Due to globalisation and rapid developments in technology, there is surge in the technological gadgets. Almost everyone these days is using smartphones and tablets so that they have an easy access to the information required by them. Moreover, the players of the restaurant industry have to capitalise on the E-commerce options so that they can reach their target market from every place (Branes, 2008). Unique offering Since the competition is getting fierce and Nando’s has to remain competent, it is crucial for the restaurant to present its customers with a differentiated and unique offering. Presently, there is absence of organic and healthy menu items which shows that the brand can consider offering this variety. The company can consider the option of either offering the similar range of existing items with a healthy alternative or it can start an entirely new line of nutritious food items. As majority of the customers of the restaurant are Millennials, Nando’s should target the young people. These customers will support the company in marketing its latest offering on a low cost way which will minimise its additional cost. Moreover, the social media tools such as Search Engine Optimisation and social networking sites such as Facebook, LinkedIn and MySpace should be used to inform the customers about the new offering. It can even include healthy juices and coffees for health conscious consumers so that they can have a complete and well-balanced meal within their affordable range. Operations of Nando’s In the restaurant industry, excellent customer service and quick order fulfilment are the fundamental aspects which allow the companies to strengthen their position in the market and gain the customer’s mind share. Considering the scenario of Nando’s, the Just-in-time and lean thinking concept has to be effectively implemented. Every server of the bistro has to make sure that the customers are provided their orders within 10-15 minutes without any mistake. Similarly, the back-end staff has to make sure that the supplies are available in sufficient amount so that the demands of the customers are met and they remain satisfied and contended with the offering. In order to make sure that there is same quality of food and consistent service delivery, the staff has to be trained appropriately. Even the processes employed for the operations have to be implemented on the same level across the globe so that there is no difference of taste and flavours in any outlet. Hence, Nando’s has included the latest IT system in its operations so that everything is fresh and all commitments of the restaurant are successfully fulfilled. A graphical representation of Nando’s operations is shown in the following diagram: Conclusion Nando’s has grown to become the leading brand due to strategic vision and consistent business operations. In order to have effective communication with the customers worldwide, it makes sure that the marketing strategy resonates with the respective market’s customers’ mindset. It has successfully capitalised its low cost marketing strategy with extremely efficient operations so that there is not a minor difference in any of its international operations. References Barnes, D., 2008. Operations Management: An International Perspective. London: Thomson Learning. Brown, M., 2013. Nando’s nation: the chicken that conquered Britain. [Online] Available at: [Accessed 18 February 2014] Harrison, A. and van Hoek, R., 2011. Logistics Management and Strategy. 4th ed. Harlow: Financial Times Prentice Hall. Johnson, S., 2013. Mintel is projecting a 5.9 percent increase in the US restaurant industry sales in 2014. [Online] Available at: [Accessed 18 February 2014] Joseph, S., 2013. Nando’s overhauls loyalty scheme to take marketing to the ‘next level’. [Online] Available at: [Accessed 18 February 2014] Matupolus, A., Vlachopolou, M., Manthou, V., and Manos, B., 2007. A conceptual framework for supply chain collaboration: empirical evidence from the agri-food company. Supply Chain Management: An International Journal, 12(3), pp. 177-186. Mintel, 2012. Mintel’s 2012 Dining out report: A look ahead. [Online] Available at: [Accessed 18 February 2014] Mintel, 2013. Mintel reveals 2013 foodservice trend predictions. [Online] Available at: [Accessed 18 February 2014] Nando’s, 2014. Our Story. [Online] Available at: [Accessed 18 February 2014] Witcher, J., 2014. Top trends for 2014. [Online] Available at: [Accessed 18 February 2014] Read More