Exploring Vietnam - a New Market for Nandos - Research Paper Example

Exploring Vietnam: A New Market for Nando’s Name: Course: Instructor: Institution: Executive summary Starting up any business investment in any new market and different geographical location often demand that the involved entrepreneur acquaints her/himself with all the relevant information regarding the same market. Nando’s is one of the major leading stakeholders in the hotel and hospitality industry in the America, Canada and the major parts of the United Kingdom. The company intends to set up its operations in Vietnam. This report is thus a collection, analysis and a presentation of the existing market information in Vietnam. It presents a report that has been carried out to establish the viability of Nando’s intention; whether it is economically justified to invest in Vietnam. This research report is thus meant to exhaust all the potential opportunities, weaknesses, challenges that might face Nando’s company should the company go ahead and implement its initial decision of establishing affiliate businesses in Vietnam. It basically serves as a reconnaissance study of the hotel and market industry of Vietnam and the potential outcomes of investing in such a market with such established characteristics as will later be presented in his research report. Table of contents Executive summary 2 1.0.Introduction: 4 2.0.Research Aims and objectives: 5 2.1.Primary objectives 5 2.2.Secondary objectives 5 3.0.Research question 5 4.0.Research scope 5 5.0.Literature review 5 5.1.History of Vietnam 5 5.2.Hotel and Hospitality industry in Vietnam 6 6.0.Methodology 7 6.1.Questionnaires 8 7.0.Research approach 9 7.1.Qualitative Method: 10 7.2.Quantitative methods 10 7.3.Mixed Approach 11 8.0.Research strategy 11 9.0.Research philosophy 12 10.0.Research ethics 12 11.0.Findings 12 12.0.Analysis and discussion 13 12.1.SWOT analysis 13 12.2.PEST analysis 14 12.3.SMART analysis 16 13.0.Conclusion 16 14.0.Recommendations 17 15.0.References 19 1.0. Introduction: Nando’s is a casual dining restaurant original coming from Portuguese since 1987. Currently, Nando’s has restaurants in 24 countries, mainly Australia, Canada, Singapore, Malaysia, South Africa, US and UK. In 2013, within Australia, Nando’s has 270 restaurants nationwide, 28 in New Zealand and 2 in Fiji( ). Nando’s has become famous for its flame-grilled chicken with their unique sauces. Surprisingly, Malaysia and Singapore are the only countries in South East Asia that have Nando’s restaurants. With a huge population of almost 93 million in 2014, Vietnam can be a potentially new and successful market for Nando’s( ). This project will research and discuss about Vietnam’s market for fast food industry, especially Nando’s. Operating a business in a foreign culture or environment often brings unique challenges and opportunities, this paper will discover, discuss and explore the difficulties that come along with operating the brand in such a promising international market- Viet Nam. The challenges can be mentioned as the differences in physical and social factors, competitive factors, cultural factors, political and legal factors, the local economic environment affect to international business, governmental influencing on trade, international strategy and marketing globally There are several reasons for choosing this topic: Young population (similar to McDonald ) Vietnam people are willing pay more for brand name food due to increasing Nando’s is an international chain restaurants famous for their flame grilled chicken and Peri Peri sauces. Vietnam and Asian in general like spicy foods. 2.0. Research Aims and objectives: 2.1. Primary objectives To establish the viability and success rate of starting up Nando’s chain of affiliate business enterprises in Vietnam 2.2. Secondary objectives Objective 1 Objective 2 Objective 3 – Research and identify Vietnam’s market for fast moving foods – Determine the challenges of establishing and managing an international business in Vietnam – Identify various opportunities in Vietnam for operation of an international business enterprise 3.0. Research question The research question for this undertaking will thus be: What is the market potential for setting up Nando’s chain of affiliate business enterprises in Vietnam? 4.0. Research scope The size and inclusions of a project are defined by aims and objectives as well as deliverables. The project scope is thus meant to provide a clear and in-depth understanding of the project to all involved stakeholders. The project scope is usually defined in the initial phases of the project undertaking. In this context therefore, this report intends to provide information on available markets that can be exploited y Nando’s as a strategy to increase the organization’s revenue. 5.0. Literature review 5.1. History of Vietnam Vietnam's history is characterized by various incidences of war, colonization and extensive civil rebellion. The country was invaded by China in more than four times but managed to fight off the intruders on every occasion. During this period, the country experienced civil division, ravaged by civil wars as dictated by imperial dynasties. However, the country soon stabilized to form a single one party state with a ceremonial president and an executive prime minister who holds most power and authority. Although recovering the economy of the reunited country has proofed difficult, there is hope after introduction of capitalism principles through the đổi mới (renovation) program. Vietnamese culture is dominated by Chinese practices of Confucianism, often forming the backbone of the people’s culture comprising of the dominant Kinh ethnic group and a significant ethnic Chinese community. This can be attributed to the Chinese invasions into the country. 5.2. Hotel and Hospitality industry in Vietnam Vietnam has been occasionally referred to as a lonely planet. This arises to the great potential in the hotel and hospitality which has not been sufficiently been exploited. The major stakeholders in the industry include Victoria group of companies which run a series of hotels and restaurants within the country which usually cater for tourists who frequent the country. Vietnam has a vast collection of tourist attractions within its geographical location ranging from the landscape, wildlife and peoples culture. The country has since witnessed tremendous improvements within its tourism sector with foreign tourists going beyond 3.5 million in a year as shown in the table below. Vietnamese Tourist Arrivals Year Tourism Arrivals Change 2009 3,772,359 - 2010 5,049,855 34.8% 2011 6,014,032 19.1% 2012 6,847,678 10.8% 2013 7,572,352 10.6% Source: www.vietnamtouristrecords.com This presents a great success potential for establishment of facilities such as hotels and restaurants within the country. The dominant Chinese culture and well developed consumer purchasing power and patterns within the country provides a ready market for the under developed food industry within Vietnam. This also adds to survival chances of an international company with huge capital and established standards such as Nando’s. 6.0. Methodology The research methodology adopted for the research project includes both qualitative and quantitative approaches. In the same connection, the study incorporates in its content pre-recorded quantitative secondary research data provided in secondary materials such as text books, print articles internet and financial magazines. This data includes information on stakeholder views, opinions and stands on Nando’s as sample financial records depicting the performance of the organization on existing markets. Primary data for the report will be obtained through administering questionnaires for a public survey on Nando’s in order to grasp and record corporate stakeholders’ views regarding the corporate image of Bread Talk Group, to collect necessary and required primary quantitative data for analysis and conclusions. In this case, a series of questions and other prompts will be developed and administered for the purpose of gathering information from respondents. 6.1. Questionnaires Questionnaires are inherently quantitative. They focus on numbers and estimates based on the accuracy of responses or the similarity of the same. In this case, the issue is to ensure that a great percentage of acceptable questionnaire responses represent the majority opinion. It is however not off the mark to represent other unpopular perspectives to the matter. The questionnaire design will thus incorporate less personal questions few leading questions and majorly ones where the respondent simply has to tick where appropriate. The questionnaires will be evaluated with the interviews to establish quality of the responses and the level of bias on the responses produced by both sets of methods. Questionnaires are best suited for statistical analysis of the responses since the responses obtained are highly practical. Large amounts of information can be collected from a large number of people in a short period of time and in a relatively cost effective way. Another advantage of using questionnaires is that they can be analyzed more 'scientifically' and objectively than other forms of research. Finally the results obtained from questionnaires can be quickly and easily quantified by either a researcher or through the use of a software package and therefore it is also easy to compare and contrast quantified data hence ascertain changes in trends. 7.0. Research approach The research approach for this research project can be systematically represented by the diagram bellow. It was basically implemented using the three commonly used research approaches: qualitative, quantitative and a mixture of both qualitative and quantitative. Diagram showing Research Approach The research undertaking began with a keen consideration of the general public perception and opinion on Nando’s as a social entrepreneurial entity. This category of data has been categorized as philosophical world views. It basically includes recorded accounts especially in lifestyle magazines and website posting discussing on the performance of Nando’s in the hospitality industry. It also includes non-recorded views and opinion as held by the general public. The philosophical views are contained in the corporate world hence require a clearly structured approach to acquire get access to the same views. In this case, the researcher opted to involve design of both qualitative and quantitative methods of collecting data. The type of data collection method picked upon depends on various aspects of the study. For instance, the nature of the solicited information, the scope of the study, resources available and the desired accuracy are some of the major considerations when deliberating on a data collection method. This report as presented has therefore employed both qualitative and quantitative methods to obtain secondary and research data. 7.1. Qualitative Method: Qualitative methods are used to collect information on the perceptions, perspectives and opinions of the various stake holders such as individuals and groups on Nando’s as a whole. This involved the emerging questions, procedures whereas collect data through participants settings, data analysis induced from specific to general theories. The research thus evaluated its objectives and hypotheses by analyzing and interpreting such collected responses and data as collected from the various stakeholders. 7.2. Quantitative methods Quantitative research methods are often employed during data analysis and processing. In most cases, the effectiveness and accuracy of quantitative research techniques goes hand in hand with the qualitative method adopted. Quantitative approach in most cases involves extensive review and careful analysis of already existing secondary data on a given topic being researched on. In this research study for instance, quantitative research methods were used alongside statistical procedures and techniques to test the existing theory vis-a-vi the research variables. There exist numerous volumes and chapters of prerecorded information on Nando’s and its market expansion potential. Quantitative research methods were thus helpful in establishing the actual statistical relationship between the statistics provided in such existing recorded documents and an actual survey on the research topic in question. 7.3. Mixed Approach While qualitative research approach collects primary data from stake holders, quantitative research approach aims at analyzing pre-recorded secondary data in relation to the research topic. In order to gain an inner insight of the whole research topic from different points of view, a mixture of both research approaches is often encouraged. The conclusions to be made from this research study are thus take an account of both quantitative and qualitative approaches and the subsequent data collected from the two independent approaches. A design was therefore designed and established from the conclusions as made from a blend of the two research methods. This design was made in a way as to include philosophical as well as theoretical framework. 8.0. Research strategy This presents a stepwise procedure adopted for the whole research undertaking. In this case, the research strategy is as presented in the simple diagram bellow. Research strategy 9.0. Research philosophy The proposal philosophy will be positivism, as this topic should be studied in a scientific manner and based on facts. Also the proposal will take the philosophy of axiology that determines surveys and statistical analysis in order to collect data for our research. 10.0. Research ethics Being a researcher it is my utmost duty to oblige by the research ethics that defines honest narration of the data collected without disclosing the names of the participants involved in our survey that’s why this research is conducted based on the deontological approach. Moreover, during the data collection process the conduct was according to the ethics and social norms that define decency and politeness while talking to people. The statistics shows are completely and entirely honest without any fabrication 11.0. Findings A number of findings can be inferred from the various responses from stakeholder within Vietnam as well as the secondary literature on the challenges, opportunities and market potential of an international company investing in Vietnam. For instance, Vietnam has totally recovered from civil wars and time to time invasions from China after signing various treaties and peace accords, courtesy of the intervention of the United States of America. Vietnam has an extensive collection of tourist attractions that draw admiration from all over the world. On the same note, the country receives numerous numbers of tourists with such numbers threatening to outdo the available hotel and accommodation facilities in the country. Due to close relations with china on various interaction fronts, Vietnam was almost considered as a tributary state of China. The country is dominated with Chinese culture and customs, among them, a significant preference for Chinese spices. 12.0. Analysis and discussion 12.1. SWOT analysis Under this section, the research makes analysis of the strengths, weaknesses, opportunities and Threats that might affect the eventual penetration of Nando’s into Vietnam. To begin with, there is an already established preference for spices in Vietnam. This becomes a major strength as far as Nando’s specialization in grilled chicken is concerned. This is also coupled with the huge Vietnamese population of around 90 million people. The spice preference and huge population will thus provide a ready market for Nando’s products and the copy wont struggle so much to introduce its brands in the same new market. The weakness to such a move by Nando’s into Vietnam would thus be the insufficient knowledge on the pacific and eastern bloc markets. Most of the company’s over 240 enterprises are concentrated in the United Kingdom and the Americas. With such little understanding of the eastern markets, the company will need to subsequently spend on market entry techniques in order to quickly settle in Vietnam. There lies greater opportunity in Vietnam to provide sufficient market for the spiced grilled chicken supplied by Nando’s. For instance, there is no company with such a reputation operating in Vietnam. To add on this, most of the tourists visiting Vietnam are from the United Kingdom and the Americas. There is a high chance they might have had interaction with Nando’s and will subsequently insist on the same brand even when in Vietnam. The huge local population will provide sustained purchasing patterns sufficient enough to yield high revenues for the company. Threats and risks are common encounters in entrepreneurial undertakings. The major threat to Nando’s should the management sanction the idea of stretching the investment into Vietnam will thus be high taxes and tariffs imposed on internal corporations and businesses operating in the country,. The Vietnam economy hasn’t fully recovered and stabilized. The introduction of capitalistic practices in the economy has resulted into such high taxes charged especially on foreign and international businesses and Nando’s will be no exception to the same taxes. 12.2. PEST analysis This analysis technique analyses the findings on terms of political, environmental, social and technological implications. The current political system in Vietnam greatly favors both local and foreign international investments. The political fraternity finally came in terms and agreed on a parliamentary system hence ending the constant wrangles and civil wars as a result of clashes between political ideologies. Due to cessation of attacks from China, the country enjoys stable peace within its demarcations hence offering the most favorable environment for entrepreneurial ventures. The climate patterns in Vietnam have also greatly increased the number of tourists visiting Vietnam. The cool breezes along the shores during summer are enjoyed by most American who miss similar climate at their home countries. This is the major environmental phenomenon that ought to be seized for entrepreneurial gains. Basing on the various locations of the Nando’s enterprises in Vietnam, the company is likely to reap h8uge revenue from such tourists. The social set up of Vietnam alongside the people’s culture goes in line with the major products supplied by Nando’s- grilled chicken. Spices are a conspicuous component of the cultural diets in Vietnam. The chicken eating culture among the natives is well established and high. The introduction of a unique preparation procedure- grilling will most likely draw most natives to Nando’s for the same chicken. Chicken meat quality and taste is adversely affected by the kind of spices used. This is an aspect in which the Nando’s staff have vast experience and well versed with hence will capitalize on such long time skills to retain the same customers once they attract them to the company enterprises. Technological creativity and innovation has since moved to affect every aspect of human existence. Nando’s can thus use technological avenues such as online bookings and purchases to increase its service delivery effectiveness. This can be a very welcome idea especially when dealing with tourists as it will enable them order and get such delicacies within their accommodation facilities hence convenience. 12.3. SMART analysis SMART analysis is often used to analyze the objectives of any intended undertaking or venture. The technique tries to establish whether such objectives and aims are specific measurable, accurate, realistic and time bound. Nando’s expects to stretch its chain of restaurants into Vietnam so as to increase the general revenue and profits for the company. By investing into Vietnam, the company intends to increase its overall sales realized hence increasing the overall profit margins of the company. This therefore becomes the specific objectives of the company. Such increment in profits can be established and ascertained upon successful introduction and settling of the company into Vietnam. The company will thus have a certain set target of estimated sales that the company intends to make within a given time span. By setting such targets, the company will thus be making its objectives measurable as well as time bound. The level of accuracy will depend with the level of precision with which Nando’s achieves its targets in the Vietnamese market. 13.0. Conclusion Vietnam enjoys the best geographical Asia, with unique climate pattern, a variety of wildlife and plenty of natural scenery. This has made the country one of the prime destinations for tourists from all over the world. The country has a population of over 90 million people, with a well-established spice-preference culture due to the Chinese influence. Currently, Vietnam enjoys serene environment, free from civil wars and international conflicts. The general environment and conditions in the country are suitable and conducive for Nando’s to sanction the idea of expanding its operations and affiliate businesses into Vietnam so as to increase its overall revenue. In line with the research aims and objectives, t has therefore been established that it is economically viable and justified for Nando’s to start establishing its branches in Vietnam 14.0. Recommendations Basing on the information collected, discussed and analyzed in this research report, it can be therefore recommended that the Nando’s begin working on then actual plan to start investment in Vietnam since the country possesses enough potential and market for the company’s products It can also be recommended that the company sets favorable prices if it intends to make reasonable profits from the local market in Vietnam. The national economy of Vietnam is in its developmental stages hence moderate inflation rates which might limit the customers’ purchasing ability should the company set its prices as high as in such countries it has operated from. The cost of operation in Vietnam isn’t that high and thus this should be an extra reason for lower prices. Finally, the huge population in Vietnam will subsequently require enormous advertising and marketing approaches during market entry stage of the company. On this note, it is recommended that Nando’s opts for corporate social responsibility activities and embraces media advertising openings and provisions. These will be the most effective means of reaching out to many people within a short duration hence quickly establishing the company brands and products on the Vietnamese market. 15.0. References (2003). Vietnam tourism. Hanoi, Vietnamtourism. (2000). Nando's International: taking chicken to the world. Cranfield, European Case Clearing House. 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