Nando's Opening Restaurant in Hong Kong - Business Plan - Essay Example

?Nando’s Opening Restaurant in Hong Kong - Business Plan Company Introduction Nando's is an off-the-cuff dining restaurant clutch initiating from South Africa with a Mozambican/Portuguese ambience. Created in 1987, Nando's functions in thirty countries through 950 branches on five continents. Nando's specifies in chicken foodstuff with one or the other lemon and herb, medium, hot or extra hot ‘Peri-Peri marinades’(accurately famous as Galinha a Africana). In certain countries, Nando's has other savor selections like Mediterranean or mango and lime. This paper looks at the 9-steps business model for Nando’s Opening a restaurant in Hong Kong, China. Destination Introduction – Hong Kong Contemporary Hong Kong has a primarily service-centered economy (Hong Kong Census, 2007), plus restaurant industries serve as a chief economic provider. With the third-thickest population per square meters in the whole world plus harboring a populace of around 7 million (Hong Kong Statistics, 2007), Hong Kong is host to a restaurant business with powerful competition. Because of its small geographical proportions, Hong Kong comprises a great number of restaurants per unit area. The target clientele of the Nando’s is people from all walks of life. The success of this restaurant in other countries speaks for itself. Only in United Kingdom (one of its strongest business centers, it had a turnover for the last year of over ?186,642,000.00 (Smart, 2011). It will not be a small scale Hong Kong restaurant. Its signature foods will include the flame-grilled Peri-Peri chicken. The chicken will be served in quarters, halves, wholes, and butterfly breasts. Nando's will also serve pitas, burgers, salads, wings and wraps. Keeping in view the food of Hong Kong, chicken livers, Cataplana (a chicken and rice dish served in a traditional Portuguese copper dish) and Espetada (a large stand with a skewer of chicken breast and grilled peppers) will also be offered. Characteristics Hong Kong is the gastronomic capital of Asia, covering a wide choice of restaurants that deal in cookeries from all over the globe. Eating out is the nation’s leisure pursuit. As a consequence, the Hong Kong Food and Beverage industry is stout, with a robust market for the restaurant industry (Janus, 2011). Business receipts in record chief service industries increased in worth in the second quarter for year 2008 over the same passe last year. Restaurant business receipts propagated 15.3%, while those for blanket retail, plus import and export line of work, up surged 14.3% and14.1% (www.news.gov.hk). Franchising in Hong Kong Hong Kong is a perfect destination for Nandos’. Private surveys and social networking web sites reveal that a huge number of people in Hong Kong are want Nando’s to start in Hong Kong as the ‘Peri Peri’ taste of chicken is traditional of Nando’s. The notion of franchising has been rising in Hong Kong for the preceding decade. More than 80% of the franchise maneuvers in Hong Kong have foreign basis. Home-grown franchises have also established, particularly in catering (Li, 2010). Location Target location to open the Nando’s restaurant in Hong Kong is at Wellington Street right besides Stanley Street, Queens Road. Nando’s first branch will be right beside the ‘Kee Club’ (Please click the link in the references section to view the location). The purpose for choosing this spot is that offers a perfect location to start a chicken restaurant business. It has empty apartments for new entrants as well as full-functioning restaurants. Another attraction for choosing this location is ‘Yung Kee’ restaurant, which has the specialty in cooking goose and ducks. Our project, Nando’s is a master in chicken and its products. ‘Yung Kee Restaurant’ will serve as a supplement for our business – they will be serving ducks and goose and here in our restaurant, we will be serving chicken and its related products and sauces (Google Maps, 2011). Other restaurants on the opposite side of the road include Tsui Wah Restaurant, Mingle Place at the Eden and right in front of soon-to-be-Nando’s location is Tastings Wine Bar. There are almost 1334 restaurants in Hong Kong (Hong Kong Restaurants, 2011). Strategic Analysis Hong Kong is a prosperous free market economy with approximately zero import tariffs, overall a net food importer with a great significant food and beverages marketplace and a respectable vitrine and test marketplace for food items from China and other regions of Asia. Its food tendencies are escorted by food care, growing health awareness, changing demographics and demanding routines. Its tendency in food feasting comprises of snacks, organic, convenience and functional foods, frozen /chilled meat and food as presents. The chief food retail channels in Hong Kong are department stores and supermarket clusters, convenience stores, specialty stores and traditional markets. Hospitals, Restaurants, Hotels and airlines consist of the food service segment in Hong Kong and there is a tendency en route for quality food and non-Chinese eateries like Fast food, Japanese food, casual dining restaurants and coffee and snacks (Chung, 2007). SWOT Analysis Strengths Consistency of food has served Nando’s in farfetched times. Nando’s known for their food taste consistency and quality. That is an advantage as people always know what they will get at the Nando’s. This strength will serve well in Hong Kong as people are dealing with a diverse food market because it is considered New York of Asia or the capital of Asia, which is why so many restaurants are opening business there. Successful food items are strength for Nando’s that they can carry with them at the new business destination, Hong Kong. They have introduced their ‘Peri Peri’ sauce at some local restaurants (Elias, 2011) and the experience has been wonderful. All welcoming signs for the arrival of Nandos in Hong Kong are glimmering with Neon signs. Flamed-Peri Peri chicken is traditional with Nando’s. They are known for this Portuguese styled cooked chicken. Huge fan base of that chicken taste awaits Nando’s in Hong Kong. The spice level is usually high in Nando’s food products. This is a good sign as this Spicy food- also appeals to the Indian taste buds. And there is a significant Indian/Pakistani community in Hong Kong (Wikipedia, 2011). It is spicy but is also fat free. Chicken is marinated and cooked only after removing excess fat from it. Therefore it also appeals to the health conscious people and individuals who are on a diet. Despite the debate about the spicy chicken at Nando’s, people can choose the hotness (spice levels for their chicken) so basically no complaints altogether. Other than that, all the foods usually have high protein contents. Weaknesses Their main focus is on chicken items therefore it is not that appealing to vegetarians. The Hong Kong food market itself will be extra challenging as it is still considered a city-state, Nando’s cannot enter the Hong Kong market with a purely Chinese perspective only. Their marketing activities are very limited. They are famous for their funny commercials but overall they are not part of the fierce competitive marketing game. Prices on their menu probably are not affordable for people, especially when it comes to third world countries. (But in Hong Kong, average individual income is quite stable (Lee, 2010)) Opportunities Changing Lifestyle of Hong Kong masses is a wonderful opportunity for Nando’s. As Hong Kong is also a business hub therefore many people come and settle from other regions with varying taste buds that Nando’s needs to explore. Another opportunity that Nando’s can consider is the possibility of expanding its food service to beef, mutton and fish. Sea food is especially famous in Hong Kong. Growing market of Hong Kong is yet another luxurious opportunity to score market shares earlier in the Nando’s business venture. Nando’s can fully conquer the restaurant industry as people in Hong Kong are open to food experiments. Experience of successfully dominating the restaurant industry in United Kingdom will serve as a solid base for Nando’s to experiment in Hong Kong. Threats Power of competition is one of the biggest threats that Nando’s will probably face in Hong Kong. Fast food restaurants like McDonalds and KFC are well-established over there in Hong Kong and running a successful business. Diseases like bird-flu and other contagious diseases pertaining to chicken and poultry products can have a devastating effect on the sales for Nando’s in Hong Kong. Economic growth in Hong Kong was around 5% in 2010. Nevertheless, rents and wages are on the rise in Hong Kong and price increases may border Hong Kong’s future economic development. Furthermore, Central China is projected to take severity measures to calm down its economy, and such strategies are probable to hold back Hong Kong’s economic development in 2011. (Lee, 2010). Another threat that faces Nando’s is that more consumers getting health conscious especially in Hong Kong (Lee, 2010). Extra spicy and hot food is not an orthodox health choice for food conscious people. Another threat that Nando’s will have to face in Hong Kong is the Brand loyalty that is enjoyed by the existing competitors in Hong Kong. It will probably require some well-invested and thought-out advertising and marketing campaign to capture the market. Intimidation of new contestants is high and disapproving in the food business. This is a tangible threat in a place like Hong Kong where the food business views continually change configurations in request. Owing to its consumer base, that is always on the sentry for new and improved places to eat. From time to time, a new cafe or a restaurant opens up, out of which only a few are able to effectively persist in the long run. Therefore, Nando’s must deliberate its efforts on Differentiation Strategy, as that is key to survival in the Hong Kong food industry (especially, in the major cities of China). CAGE Distance Framework There are numerous valuable carry outs from this examination that Nando’s must consider in making any expansion conclusion. 1. Cultural Distance Hong Kong rests culturally diverse in most reverences associated to the countries that can be considered for expansion, and this could create problems with business development. Cantonese, the major language of Hong Kong is unlike all of the other countries, and all of the countries have unlike chief ethnic configurations with the exception of Singapore. Singapore, Thailand and Taiwan have similar religious alignments, while the Vietnam and Philippines have dissimilar chief religious credentials. 2. Administrative Distance Hong Kong only shares analogous colonial bonds with Taiwan and Singapore. Government organizations vary amongst the clutch, with the Singapore, Philippines, and Taiwan having alike procedures of government. Every country excluding Singapore has a dissimilar form of law equated to Hong Kong’s dependence on English common law. Different procedures of government and diverse law systems could surely create glitches in expanding Nando’s to other Southeastern Asian markets. 3. Geographic Distance Each of the potential Asian countries (for Nando’s) is geographically near to Hong Kong as they are all situated in Southeastern Asia. Though the countries do not share mutual borders, many of them are consist of numerous islands and geographic expanse does not seem to be a major constraint in expansion of Nando’s beyond Hong Kong into other countries. 4. Economic Distance An economic enquiry of the Asian countries deliberated for probable development paints an exciting picture. An aspect of Hong Kong that makes it the most powerful candidate for Nando’s to expand is the difference in GDP per capita (PPP) between all of the nations in the South East Asian region. Hong Kong has a great measure compared to the rest of the flora and fauna at $42,000, and this surely supports them in creating a market for a moderately expensive restaurant like Nando’s. Singapore and Taiwan too have comparatively high GDP per capita in terms of PPP, and therefore they are tempting from an economic standpoint. In contrast, Vietnam, Thailand and Philippines, all have truncated GDP measures that are far below from Hong Kong and could bestow a test in establishing Nando’s in countries other than Hong Kong. PEST Analysis   A.   Political Factors The Hong Kong Special Administrative Region (HKSAR) has been in the rule of central China for numerous years already after the abdication of the British Government. However, it has been given a ‘carte blanche’ in employing business-friendly regulations in the land (Birch, 2004). These independences permitted many International food brands to operate in the said country. Furthermore, Nando’s has similar acquiescent of any other rules and regulation obligated by the Hong Kong government.       B.   Economic Factors Hong Kong has been deliberated as one of the commercial last-stop in Asia. There has been a substantial flow of traffic chiefly concerning tourists and other travelers in Hong Kong. Travelers from central China have been very rampant in the recent years in Hong Kong. In contrast, travelers from the adjacent regions have also herded the Hong Kong with the inauguration of the Disney theme park. This simply implies that the consumer base of Nando’s will only increase considerably by such changes in the economic positioning of the country, predominantly the arrival of consumers not only from central China but also from the other customers from the neighboring Asian countries. In spite of the worldwide financial crisis, Hong Kong restaurant industry’s consumptions of over US$3.5 billion in foods and beverages produced sales in excess of US$10.2 billion only in 2009, denoting an increase of 0.6% (Lee, 2010).   C.   Socio-cultural Factors The socio-traditional aspect of Hong Kong would be greatly discussed with the use of influential work regarding cultural dimensions of the city-state. Hong Kong is characterized in far Eastern constellation, meaning that the Hong Kong owns a culture that has great ‘power-standards’, low uncertainty evasion, very cooperative and manly. Hong Kong has been shown to have a greatly masculine society (Chang, 2005). The study of (Seite, 2010) showed that Hong Kong has low insecurity evasion in its values. This displays that the customers in the country tend not to plot their consumptions. Furthermore, Hong Kong is said to have a robust long-term bearings. This shows that the customers in Hong Kong have an inclination of becoming loyal to a brand once they have been gratified with its services or product. All of these features going in the favor of Nando’s success in Hong Kong. Moreover due to narrow land resources and a populace of 7 million, Hong Kong depends on imports for over 95% of it food articles (Lee, 2010).        D.   Technological Factors Mainstream consumers in Hong Kong are prominently capable of using computer-based machines. With a high technical know-how populace, the consumer base on Hong Kong inclines to look at the aspect of convenience as a benefit. Some studies indicate that a sizeable number of Hong Kong customers shop online, even though this trend is decreasing relative to the rest of China but still it definitely is an opportunity (nielson, 2010). In other words, Nando’s could take advantage of this fact and start a platform that will essentially cater to this need of the consuming public.   IV. Analysis The considerations above have offered a rather favorable business atmosphere for foreign brands like Nando’s in the HKSAR. The economic and administrative features as specified in the earlier deliberations have discovered a set of background that will fundamentally embolden supplementary investments in Hong Kong. Furthermore, the managerial region is also seen to have given enterprises enough scope so as to apply a policy for financial development. Nonetheless, Nando’s should reflect the social and technological characteristics of the managerial region thoroughly in order to procure a superior market share of the restaurant industry. Though Nando’s has a time-honored and identifiable brand, competitors are continually prowling around trying to control the business market. Considering the community and traditional rudiments, loyal customers of Nando’s will stay within their business circle. Alternatively, take advantage of the opportunities innovated by the technological characteristic of the region will likewise gain Nando’s an ever-increasing customer base. In doing so, the top of the restaurant industry in Hong Kong which deals especially in chicken, is for Nando’s taking.         V.   Conclusion This paper has presented the business demands on which Nando’s Hong Kong has to cope with so as to be on top of restaurant chains. It has shown the significance of knowing the aspects that will ultimately affect the procedures of Nando’s. To demonstrate, the economic issues have proven the potential of Hong Kong restaurant market. The socio-cultural features have offered the demands on which Nando’s should act so as to uphold the loyalty of its key customers. In contrast, the technological aspects embody the prospects in which Nando’s could market their foodstuffs and facilities. Likewise, the political characteristics have showed the legal necessities and conventions in which Nando’s have to start a business. For the most part pertaining to these key conclusions in the business background of Hong Kong, the company could easily deliver for the essential steps in achieving a novel business opportunity of expansion into Central China through Hong Kong.    Work Cited Hong Kong Restaurants. (2011). Retrieved Aug 17, 2011, from Trip Advisor: http://www.tripadvisor.co.uk/Restaurants-g294217-Hong_Kong.html Birch, C. W. (2004). Hong Kong Trading in Experience . Fashion Business International. Lee, C. (2010). Hong Kong: Food Service-Hotel Restaurant Institutional . Hong Kong: Global Agricultural Information Network. Smart, W. (2011). Nando's Finance Limited. Retrieved Aug 17, 2011, from Work Smart from the Tuc: http://www.worksmart.org.uk/company/company.php?id=05415274 Hong Kong Standard Industrial Classification. (2007). Hong Kong Census. Available: http://www.censtatd.gov.hk/FileManager/EN/Content_800/labour.pdf. Last accessed 17th Aug 2011. Census and Statistic Department. (2007). Hong Kong Statistics. Available: http://www.censtatd.gov.hk/hong_kong_statistics/statistical_tables/index.jsp?htmlTableID=139&excelID=&chartID=&tableID=002. Last accessed 17th Aug 2011. Eine Seite . (2010). Uncertainty Avoidance. Available: http://www.via-web.de/uncertainty-avoidance/. Last accessed 18th Aug 2010. Nielson Global . (2010). Global Trends in Online Shopping. Available: http://hk.nielsen.com/documents/Q12010OnlineShoppingTrendsReport.pdf. Last accessed 18th Aug 2010. Moon, Y. S. and K. Chan (2005), “Advertising Appeals and Cultural Values in Television Commercials: A Comparison of Hong Kong and Korea,” in: International Marketing Review, Vol. 22 (1), 48-66. Kit Chung (2007), “Hong Kong Food Market Trends”, Department of Primary Industries, pdf Elias Xanga. (2011). Nando's in Hong Kong. Available: http://elias-01.xanga.com/745260621/nandos-in-hong-kong/. Last accessed 18th Aug 2010. Wikipedia. (2011). Indians in Hong Kong. Available: http://en.wikipedia.org/wiki/Indians_in_Hong_Kong. Last accessed 18th Aug 2010. (Nando’s Location Link: http://maps.google.com/maps?pq=start+restaurant+business+in+hong+kong&hl=en&cp=0&gs_id=3e&xhr=t&gs_upl=&biw=1366&bih=667&um=1&ie=UTF-8&q=restaurant+business+in+hong+kong&fb=1&gl=pk&hq=restaurant+business&hnear=0x3403e2eda332980f:0xf08ab3badbeac97c,Hong+Kong&ei=lAZLTryOD8_zsgbquvWaBw&sa=X&oi=local_group&ct=image&sqi=2&ved=0CAQQtgM) Read More