Strategies For Growth and Profit of Nandos Outlet
RESEARCH REPORT: STRATEGIES FOR GROWTH AND SUSTAINABILITY OF NANDO’S CITY CENTRE OUTLET
In order to develop the market strategy of a company it is essential to analyze to assess the opinions of the customers related to service. This research focuses on the process by which Nando’s will be able to increase its market competency level by which this company will be able to enhance its profit margin level. In this research, quantitative and qualitative research methods are taken under the consideration by which different information related to the study can be analyzed. Analysis of customers has been considered in this study for analyzing the drawback related to the operation of this company. Nando’s is seriously experiencing a declining profit margin in recent times due to their unprofessional approach regarding engagement of knowledgeable and competent professionals. The main dispute in this context may be identified in their operation throughout inventory management which eventually responsive for emerging of some quality issues. Moreover, degradation in terms of the quality of their food items is also responsible for degradation in the level of customer satisfaction they are experiencing recently. In order to mitigate these risks which may be responsive for showing a declination in their profit margin has to be taken seriously by the Nando’s management. Several recommendations would be proposed in this junction that, in turn, may revive their position within the concurrent marketplace. As for example, product diversification based on market research would be a suitable approach. Alongside, implementation of an online portal for considering the valuable customer feedback and customer review is, of course. Provide a strong platform to Nando’s for elevating their service quality.
Food and beverage industry in New Zealand is experiencing a tough competitive environment, which is further intrigued with rivalry from new entrants that is experienced by the existing companies. Existing companies such as KFC, Subway and Burger King along with Nando’s can be exemplified herein as forerunner in this competitive environment. All these contemporaries are dealing with a specialty in producing grilled and roasted chicken food items to the Kiwi customers. Meanwhile, Nando’s in recent time has experienced a retardation in terms of their revenue generation which is much attributed to the inability of Nando’s to mitigate detriments arising out of tough competition of from new entrants as well other existing organizations in the concurrent industry. As identified, various internal and external organizational contexts of the food retail outlets organized by Nando’s in New Zealand territories are responsible for shortfalls in terms of their overall business management.
In this context, it is extremely required that the management of Nando’s responsible for operating their business in New Zealand is extremely sincere in procuring a contingency planning so that efficacy of growth strategy being implemented by this organization can be effectively assessed and evaluated. A specific project has to be undertaken by the Nando’s management so that shortfalls of present growth strategy can be effectively sorted out as well as sustainable strategies for leveraging development of the retail outlets can be identified. In this context, the following report has taken into account aims and objectives of that project along with methods and ethical considerations involved in that project. Following, an analytical part depending upon the results obtained from the ongoing project is also included herein followed by inclusion of a concrete recommendation for suitable growth strategies for Nando’s retail outlets.
Project aim and objectives
The principle aim of this research is increasing profits of Nando’s by eliminating competitions.
The objectives relevant to this particular research may be delineated as follows:
- Diversification strategy
- competitor analysis and assessment of competitor advantage of Nando’s
- Staff satisfaction/performance and appropriate strategy for implementation
- Customer loyalty strategies
Modern food retail business is much governed with changing business models, which, in turn, are primarily based on the ever-changing food habit of customers. In this respect, it can be stated without ambiguity that product diversification is a unique strategy within this competitive business environment by virtue of customer retention goal can be achieved easily by any organization. Dube, Linganiso & Karodia (2015) has opined that for achieving satisfactory result in food retail business, adopting product diversification strategy would be of extreme reliability to reduce risks that can come along adherence to a monotonous product portfolio strategy.
In this sense, spreading out of risks can be accomplished with much ease by allowing diversification of the product line or service line. As per the opinion of Akilimalissiga, Sukdeo & Vermeulen (2017), various barriers are present within a competitive marketplace that can be responsive towards slowing down of a business process and such slowed down business process is generally observed to be intrigued with slowing down of product or service areas. Therefore, alternative products or service lines would be responsive for reviving the dying business strategy of an organization. Thus, acquiring knowledge on diversification of product portfolio by an organization is suitable to hold a sustainable business environment even in a tough competition.
In this regard, several theories can be taken into account amongst which concentric diversification and conglomerate diversification would be of utmost importance for Nando’s management. As per the opinion of Karpyn & Burton-Laurison (2016), the theoretical aspects attached with both these theories would be of extreme viability for Nando’s since by virtue of lessons being learnt from these theories would give an implication to the company management about how to deal with expansion of business opportunities through diversification of existing product potential.
In a similar vein, Nando’s improving, altering or changing existing product ranges may achieve diversification. Nando’s may also consider newer marketing activities. Apart from that, as opined by Vojtovic, Navickas & Gruzauskas (2016), diversification in terms of pricing strategies would be of utmost efficacy for food retail organizers such as Nando’s. In similar relevance, it can be stated that planning process for strategizing organizational development, market research along with product adaptation analytics may also be accounted by Nando’s management.
Customer retention strategy
Customer loyalty is a virtual platform for each business firm. The theory relevant to customer loyalty is exclusively responsive for strategizing and identifying growth opportunities prevalent within concurrent industry place. Different factors such as age, gender along with education and expectations are governing the way an organization experiences customer loyalty. As opined by Boshoff & Kruger (2015), age is definitely a viable factor that can suitably provide impression about customer loyalty being able to manage by an organization. As for example, people from young youth are generally curious about quality and diversity of products being offered by food retail, whereas, aged persons hold personalized experience about a particular brand and they merely negotiate with the image they have hold about that brand in spite of deteriorating service or product quality. Thus, aged people under many circumstances can be recognized as loyal customers for a brand.
According to Wingrove & Urban (2017), gender specification is also influential for an organization to know more about customer loyalty. This argument can be explained on the basis that female personnel are more inclined to create a long-term relationship than the male customers and that is also true in case of organization-customer relationship. Apart from that, education deploys a massive role with respect to defining customer royalty for an organization. As per the viewpoint of Dube, Linganiso & Karodia (2015), people that are more educated hold a concrete bargaining power, which has a negative impact in terms of customer loyalty.
On the contrary, less educated people have lesser knowledge about market variance or price variance and thus, merely argue with retailers about pricing or quality of products. Nevertheless, customer expectation is a composite factor and retailers need to have knowledge to know more about this factor so that level of customer satisfaction can be figured out. In this context, Akilimalissiga, Sukdeo & Vermeulen (2017) that customer expectations may vary along product quality, product price or service quality, has argued it, has opined it. Nando’s needs to assess the expectation of their customer with respect to every aspect of their business and that have to be followed by evaluation of strategies.
Method and ethics
In order to determine problems related to Nando’s city centre outlet in this research project quantitative and qualitative method of the research is taken under the consideration. Quantitative method can help to include comparison-based analysis in this research project by which approach of this research can be done more critical (Bryman & Bell, 2015). On the other hand, qualitative method also is incorporated in this research project for including different types of information in this research project. With the help of qualitative method in these research different opinions of customers of this company is included (Sreejesh, Mohapatra & Anusree, 2014). This can help to develop proper recommendation for solution of different problems associated with the operation of Nando’s restaurant from global perspective.
Data collection method
Primary research method is considered in this study for including relevant information in this research. This also has helped to make the approach of this research statistical (Taylor, Bogdan & DeVault, 2015). Primary data are collected by considering different academic norms of data collection. On the other hand, in order to include empirical aspects of different researchers in this research information from different empirical sources are included.
In this research positivism philosophy, deductive approach and descriptive design of the research is included. Application of the positivism philosophy can help to include the five principles, which are based on natural phenomenon (Bryman & Bell, 2015). These principles are-
- Consideration of realistic factors in the analysis process
- Elimination of the subjective aspects
- Inclusion of objective aspects
- Justification of the analysis by considering different empirical information
- Develop the study objective oriented
On the other hand, deductive approach has applied in this study to test the result of this study by considering well-known theories (Jackson, 2015). Descriptive design is applied in this research to provide proper information and description of key findings of this study.
In order to include different information related to the present situation of the Nando’s restaurant in this research interview questionnaire are considered as the prime source of collecting information. In interview different questionnaire about customer satisfaction and choices are asked in order to assess present situation of Nando’s City Centre in global competitive market. [Refer to appendix 1]
Time and place of data collection
Information related to the research is collected from different offices of this company at the peak time of the office hours. Since in this time number of customers in the stores of Nando’s is more than other time hence this time is preferable. This has included realistic information in this study by which replication or duplicity of the data can be prevented. Hence, it can help to make this research more effective and realistic.
Method of data analysis
In this research transcript, based analysis has also been included in order to analyze the opinions of different customers related to the Nando’s City Center outlet (Sreejesh, Mohapatra & Anusree, 2014). This in turn has helped to realize the problems associated with internal operation of this company. Transcript based analysis also has provided the scope to draw different recommendation related to the solution of present problems associated with internal operations of this company.
[Refer to appendix 2]
One of the major limitations of this research is lack of information associated with this research. In this research, constraint of resources can be considered as one of the major reason behind the limitation of information in this study. Moreover, another constraint of this study is different time limits. This also has imposed a negative impact on data collection process and due to this reason in this study problems related to the lack of information can be noted.
In this research, data are included by considering primary research and data are stored in highly secured database of university for preventing duplicity of data. Hence, this research can be considered reliable and findings of this research cannot be replicated. Hence, this proves authenticity of this research work.
Application of the procedure of this research in other studies
This research also can be applied in other studies and relative field of works as this procedure is flexible. Questionnaire of this research are developed in such a manner that it can be applied for other organizational context. All open-ended questionnaires are included in this study in order to enhance the flexibility of the data analysis process of this study (Taylor, Bogdan & DeVault, 2015). Hence, from this it can be stated that that this research can be generalized for assessing problems related to the operation of other organization.
1. What do You think about Nando’s?
|Customer 1||“It is a reputed restaurant” |
|Customer 3||“It provides quality food products”|
|Customer 4||“This company always looks after interest of customers” |
|Customer 5||“This company provides moderate food products”|
|Customer 6||“Services of this company are not satisfactory”|
|Customer 7||“Several issues can be seen in the quality of the products of Nando’s products”|
|Customer 8||“Nando’s customer service is not effective”|
2. Our which product do you like the most?
|Customer 1||“I like Lemon & Herb PERi-PERi Sauce”|
|Customer 2||“I like Mild Perinaise”|
|Customer 3||“I like PERi-BBQ” |
|Customer 4||“ I like Lemon & Herb Bag & Bake”|
|Customer 5||“I like Medium PERi-PERi Rub”|
|Customer 6||“I like Medium Coat & Cook”|
|Customer 7||“I prefer Garlic PERi-PERi rub”|
|Customer 8||“I like Smokey BBQ PERi-PERi Marinade”|
3. What should Nando’s have to do changes in our product?
|Customer 1||“Nando’s needs increase the quality of products”|
|Customer 2||“ Nando’s needs to lower down the cost of products”|
|Customer 3||“Nando’s needs to increase the diversity of products” |
|Customer 4||“Nando’s should increase effectiveness of its online delivery process”|
|Customer 5||“Nando’s needs to provide more offer to customers”|
|Customer 6||“Nando’s needs to develop their products according customers”|
|Customer 7||“Nando’s should increase taste of their existing products by considering quality”|
|Customer 8||“Nando’s needs to change their delivery system and must make it more effective” |
4. What are the key to make brand more reputed in the market?
|Customer 1||“Reduction of present price level”|
|Customer 2||“Development of customer service can help in this regards”|
|Customer 3||“Development of the market strategy and product promotion”|
|Customer 4||“Increase quality factor of products”|
|Customer 5||“Customer management can help to develop the brand image of a company”|
|Customer 6||“Service facilities and codes of internal process can increase the brand image”|
|Customer 7||“Customer service needs to be developed”|
|Customer 8||“Product needs to be developed according to customer preference”|
5. What are your preferences in term of services such as- online orders free Uber delivery?
|Customer 1||“I prefer online orders”|
|Customer 2||“ I prefer shopping in offline mode”|
|Customer 3||“I prefer free online deliver”|
|Customer 4||“I always try purchase products from stores” |
|Customer 5||“Online mode of transaction is best for me” |
|Customer 6||“I prefer offline more of purchase”|
|Customer 7||“I used to buy from online mode”|
|Customer 8||“I used to buy products from stores”|
6. If we make some changes in our products then what will be your reaction?
|Customer 1||“I will like to taste these products”|
|Customer 2||“I will collect information about it from other customers then I will try this new products”|
|Customer 3||“I will not purchase new products until it get popularized in market”|
|Customer 4||“I will certainly try it”|
|Customer 5||“I will prefer to collect some information about it from my friends before using this new products”|
|Customer 6||“I will compare the quality of this new product with old one then will select the proper one”|
|Customer 7||“I will not accept this new products”|
|Customer 8||“I will think about using it”|
7. How can we implement changes in the product line?
|Customer 1||“Nando’s needs to consider customers preference while changing present product line”|
|Customer 2||“Nando’s needs to include diversity in the product line”|
|Customer 3||“Nando’s needs to develop their products according to the feedback of customer”|
|Customer 4||“Nando’s needs to consider the quality for changing products lines”|
|Customer 5||“Nando’s needs to consider customer preferences and needs to be careful while implementing changes in product line” |
|Customer 6||“Changes need to be slow for retaining interest of customers” |
|Customer 7||“Changes in the product line needs to be according to market standard”|
|Customer 8||“Implementation procedure of product line changes needs to be done by collecting opinions from customers”|
8. Is there any way to differentiate the product from the competitor?
|Customer 1||“Products can be compared by considering quality issues related to the products”|
|Customer 2||“Products can be compared by considering the review of the products online basis”|
|Customer 3||“Products can be compared by considering the services related to the products”|
|Customer 4||“Comparison can be made by considering different types of issues related to the product line”|
|Customer 5||“Comparison needs to be done according to the taste of the products” |
|Customer 6||“Comparison needs to be done according to the durability of the products”|
|Customer 7||“Comparison can be made by considering brand image of the company in market”|
|Customer 8||“Comparison needs to be done by considering |
9. In the upcoming time period would you like our product?
|Customer 1||“It will depend on the market reputation of Nando’s”|
|Customer 2||“I used to consider the review of customers related to the products hence it will depend on market review”|
|Customer 3||“I will like to make analysis of the products online basis for selection of products”|
|Customer 4||“I believe on quality of Nando’s products and I will like this company’s products in future”|
|Customer 5||“For decreasing level of quality of foods I am not sure about my decisions”|
|Customer 6||“I will not buy these products in future”|
|Customer 7||“The quality of these products is not satisfactory hence I will not buy these products in future”|
|Customer 8||“I will not purchase these products in future”|
10. If we make some changes in the market related to our product then you like the previous products of Nando’s?
|Customer 1||“Yes I will like previous products”|
|Customer 2||“No I will prefer new products with upgraded features and quality”|
|Customer 3||“I am not sure about this”|
|Customer 4||“I will consider reviews related to new products for consideration”|
|Customer 5||“I will prefer old products”|
|Customer 6||“I will prefer old products”|
|Customer 7||“I will prefer old products” |
|Customer 8||“I will not prefer old products of Nando’s”|
Table 1: Interview Transcript
(Source: Created by learner)
From the response of the customers to the first question, it can be noted that most of the customers relies on product quality of Nando’s. From customer loyalty, theory it can be noted that loyalty campaigns of a company can increase the trust of the customers and this can help to increase trust of the customers. Responses of the customers is depicting that loyalty campaigns of Nando’s are effective. Moreover, from the responses of the customers it is also clear that of most of the customer prefers the popular products of this company. This also can be explained by customer loyalty theory. Nando’s had developed effective campaigns on its reputed products due to this reason an increase can be noted in the loyalty of the products. On the other hand, from response of customers it can be noted that most of the customers of this company needs to make changes in product line of this company.
According to concentric diversification theory it can be noted that diversification in the product line is proportional with the satisfaction level of the customers. Hence, from the analysis it can be noted that lack of diversification can be seen in the product line of Nando’s. Due to this, reason a growing dissatisfaction of customers. From the result section it also can be noted that many of the customers has provided suggestion related for lowering down price level of products of this company. This also can be understood by considering concentric diversification theory for further analysis. Since minimum diversification can be seen in the product line of Nando’s hence relatively high average price level can be seen for the products. Moreover some customers also has provided response that this company needs to increase quality of products from this it can be assessed that company does not have a diversified line of products.
From response of question 7 of customers, it can be noted that this company needs to include diversification in the product line slowly and according to the preference of customers. Hence, from this it can be stated that one of the major issues related to the market reputation of Nando’s is problems related to its product diversification. On the other hand, from the response of question 8 it also can be observed that most of the customers rely on the online review related to the products. According to the competitive dynamic theory it can be noted that application of attack and a counter attack in response of an attack both needs to be measured for determining marketing strategies of different competitive companies. There are separate four layers for measuring effectiveness of different competitive strategies of a company such as behaviorism, managerialism, business policies and resource based view. Analysis needs to be done into separate four phases and this can help to realize the effectiveness of market strategies of a company.
From the response related to the question 8 it can be noted that most of the customers rely on online survey related for rating products. Hence, from this it can be stated that customers of this company are well aware about products of different companies. Customers of this company know about dynamic competitive theory by which they can easily asses market strategies of different companies in the market, which can be considered as one major market challenge for Nando’s. From response of the 9 and 10, it also can be assessed that most of the customers of this company relies on old products of this company. From the result, it can be observed that most of the customers relies that Nando’s needs to increase the effectiveness of its customer services. From this result, it can be stated that employees of this company are not satisfied with their job and impact of this can be seen on the customer service of this company.
Herzberg theory can be considered in this regards for developing proper analysis of organizational situation. Herzberg’s theory also is recommended as hygiene theory as well as dual-factor theory. From these factors salary of the employees, job security of the employees can be considered are two factors associated with the hygiene factors of Herzberg's theory. These factors can be considered most reliable cause behind job dissatisfaction of the employees of Nando’s employees. As a result improper customer service can be seen in this company. However according to the customer loyalty theory it can be stated that loyal customers of a company determines the brand equity of the company in the global market.
From the analysis, it can be seen that customers of this company are loyal for brand value of this company in the market. Literature section of this study supports this statement and provides according aspects. It can be stated from the literature review of this study shows that loyalty of customers can help a company to increase brand image of a company in the market. Hence, in case of Nando’s loyal customers plays a pivotal role for determining growth level of this company in market.
On the other hand, according to competitive dynamic theory it can be stated that effectiveness of the strategy of an organization can be determined by considering its market strategy and market strategy of its competitors. This can help customers to analyze the present situation of an organization in the global market. A similar outcome can be found from result of this study, which shows that maximum customers of Nando’s search online review for assessing market value of different products. Customers of this company also consider the review related to product quality by which they take decision related to the purchase of products. Hence, it can be stated that Nando’s customers applies dynamic competitive theory of market research by which they determines the quality and price rate of products. They also search for the offers related to the products, which are provided by different companies. Hence, a strong relationship between literature and results of this study can be seen.
From the above study it can be concluded that customers of this company relies on the brand value of this company which can be considered as positive sign for the growth of this company in global market. One of the major reasons behind this can be rapid internationalization of this company. This is helping Nando’s to increase its brand image in the global market. In turn, this can help to Nando’s to increase its market competitiveness. It also can be observed from the study that most of the customers of this company have provided opinion that this company needs to increase diversity of products by which company can increase satisfaction level of customers. This also can help to increase the market competitiveness of this company. Diversification in the product line also can help to attract more number of customers.
Moreover according to the opinion of the customers it also can be noted that Nando’s needs to enhance the quality factor and of its products and the diversity of its products by considering opinions of the customers. This can be considered as another step by which customer satisfaction level can be elevated. This also can help to Nando’s to increase its market competitiveness. From the response of customers, it also can be noted that they are dependent on the online-based survey for developing their idea. Hence it can be concluded that Nando’s needs to consider online based survey for the developing the strategy related to the market. From the response of the customers it also can be noted that the customers of this company relies on the old products and due to this reason it can be stated this company needs to focus on the quality of products.
Nando’s in order to increase the diversity of the products needs to consider preference of the customers accordingly. It also can be concluded from the study that customers of this company are not satisfied with customer service of this company. This can help to develop market competency of this company. This also can help Nando’s to enhance satisfaction level of customers by which it can increase number of customers of this company and profit level of this company. Responses of the customers also are showing that they expect seasonal offers from this company. In order to fulfill these criteria Nando’s City Center Outlet needs to provide offers to its customers in different seasons.
Most of the customers prefer online mode of transaction and hence this company needs to focus on online mode of transaction for selling their products in the global market. This can help to increase the sells rate of the company by which this company can increase the profit rate of global market. Finally, from this study it can be concluded that in order to increase the market competency level this company needs to focus on diversity and quality of the products. This can help to increase the profit level of this company by which Nando’s will be able to make effective growth in competitive market.
Nando’s is moderating their way within the competitive fast food channel of New Zealand. The quick-service retail outlets of this brand are operating their fast food channel in a competitive way although some failings are being identified with their operations. In this context, it can be identified that the shortfalls being identified by the management of Nando’s is much attributed to their shortcomings in terms of product diversity. This is further narrowing their way with respect to market penetration in comparison to other contemporaries such as Subway and KFC. Apart from that, customer satisfaction is rapidly falling down due to the inability of the Nando’s outlet managers to implement diversification in terms of their pricing strategy, which is a much requirement from the viewpoint of customer satisfaction. In view of this, some recommendations would be of extreme usability for the Nando’s management operating their business in New Zealand.
- Recommendation 1: Development of exclusive product ranges
The first of all in this context may be pointed out as product diversification. As figured out previously, customer retention for Nando’s is troublesome due to monotonous product lines. On the other hand, as per the customer review form the analysis part, it has been found that customers are not much favoring the new products is being launched by the outlet managers. Rather, customers are arguing for traditional tastes. Thus, it would be of extreme suitability that management of the retail food outlets of Nando’s needs to go for blending a proportionate of the traditional taste within the latest product ranges. Apart from that, as per the customer feedback, market analysis would be a viable part of Nando’s management for strategizing the diversification of their product portfolio.
- Recommendation 2: Development of organic seafood
In this regard, it can be recommended that apart from traditional spicy food items, Nando’s should be adaptable to employ some organic and vegetarian products. The reason may be stated as that Kiwi people are growing health conscious and thus, organic seafoods and vegetarian food supplements would be of utmost choice for Nando’s management. In the same vein, changing taste pattern of Kiwi people has to be investigated followed by a constructive market research by the marketers of Nando’s.
- Recommendation 3: Inventory management
Apart from that, depleting level of customer satisfaction of Nando’s is also attributed to their shortfalls in terms of proper inventory as well as staffing issues. This is, in turn, is diminishing the quality of their services as well as of their products. Thus, it is of extreme requirement that the management of Nando’s needs to invest more for strategizing appropriate staffing and recruitment process. The lagging in terms of product quality is also reasonable due to their shortfall in recruiting knowledgeable and experienced chef. This vital step would be responsive for elevating their food quality itself. Apart from that, satisfactory restaurant business is much attributed to sophisticated strategy of inventory management. In this regard, Nando’s management has to deploy some sophisticated technological intervention within their inventory system so that inventory management can be deployed suitably from the top to bottom level of their business management.
- Recommendation 4: Consideration of customer feedback in service development
Another recommendation in this concern may be stated as taking into account customer feedback seriously and that step would be vital for Nando’s in the sense that it would give them appropriate knowledge what are the shortcomings of their products and services as well as how to deal with that shortcomings. Moreover, mitigation strategies may also be elicited from the customer reviews. A peer recommendation may be recommended in this regard for Nando’s, which is much, related to alternative marketing activities. This strategy of diversification of their pricing portfolio would give them enough space to surpass the barriers of tough competition from the contemporaries. This strategy may include provision of seasonal discount vouchers for their loyal customers. Apart from that, special discount offers for first time visitors to Nando’s retail outlets may also be of much efficacy to create a sustainable business pathway for this organization.
|Goal ||Strategy||Resources (human and financial)||Risks||Timeline |
|Customer requirement analysis with respect to product diversification||Market analysis and market research involving both online and offline mode||Marketing executives|
1850 NZD would suffice this requirement
|Online data may be biased which may lead to wrong result of the market research||2-3 months|
|Food quality improvement||Identification of issues relevant to depleting quality of food is relevant. In this regard, food quality department of New Zealand may be consulted for providing their supervisory ||Quality control manager|
Quality control analysts
2450 NZD should be arranged for sufficing this need
|Scarcity of monetary funding||2 months |
|Enhancement of customer satisfaction||Incorporation of online portal for taking into account customer review and customer feedback||Customer relationship managers|
2100 NZD would be required for achieving this goal
|Hacking of personalized information of customers||2-3 months|
Table 2: Implementation plan
(Source: Created by learner)