nando's customer service essay

Nando’s – Understanding Service Delivery (MAN 1079)

Nando’s 

Word Count: 1755                      Author: Kimi Ural                                 Created: 2016                    Grade: 71% (1st)

Executive Summary 

This report includes an analysis of Nando’s service concept including a personal opinion of their service promise. Data has also been collected by frequent and non-frequent consumers of this brand through a questionnaire and online research. The main findings were that Nando’s is overall a highly loved restaurant brand. However, there were some complaints and dislikes which resulted in recommendations of: Offering entertainment to occupy waiting time, installing self-service ordering machines to prevent bottlenecks and advertising their service delivery concept more clearly.

Introduction………………………………………………………………p2

Service Concept…………………………………………………………p2

Service Promise…………………………………………………………p3-4

Recommendations………………………………………………………p4

Conclusion………………………………………………………………p5

References………………………………………………………………p5

Appendices………………………………………………………………p6

Introduction

The Portuguese and African inspired restaurant Nando’s was founded by Fernando Duarte and  Robert Brozin. Formed in 1987, the restaurant chain has branched out to over 20 countries and continues to expand. Also, the company has begun to make small movements into the fast food  and retail industry. Nando’s prides and brands itself on their humble beginnings, using small details  such as headings in 87 degrees in order to remind them of the year in which the business was formed. The brand strives to stay true to their African and Portuguese origins by using fonts which represent the tradition of sign writing designed by African artist Marks Salimu. They also had a local NGO  (non- Government Organisation) design 3 new patterns for them to use “To honour our roots, they have African, Portuguese and Nando’s touches in just the right places” (Nando’s, 2016).

Service concept 

Nando’s service concept, is to remember where they have once began regardless of the power and publicity they have today. Being the world wides most mentioned restaurant chain on social media in 2015 (Brandwatch, 2016), Nando’s is one of the few chain restaurants which kept their traditional values and views since 1987. The restaurants core product adapts to fit the local customers needs in some countries based on their preferences. Fortunately, it does not go as far as mcdonaldization where the locals start to overtake the organisation idea so far that it looses its original meaning. Finding the perfect balance, Nando’s achieves big popularity with this concept. Another point Nando’s, is amazing at is paying attention to little details such as their logo which is very well thought out. From their cockerel Barci being the main logo with a heart placed in the middle symbolising the legend of Barci, to the apostrophe in ‘Nando’s’ representing the birds eye chilli shown for the spice level options. The decoration on walls and menus utilises these symbols        along with a flame that depicts their flame-grilling technique and triangles which stand for family in South-Africa ensure their service concept of keeping values and traditions (Nando’s UK, 2016). Nando’s defers to the majority of restaurants, with their concept of having to stand to order at the till and pay up front. Afterwards, the customers then have to collect their cutlery and are able to choose from a variety of sauces from the side to take to their table. This process is self-service based, although it still requires queuing at a single line to single services (single line to multiple services on busy days), there is unfortunately no ability to place orders on an electronic device to prevent bottlenecks. A trend they do follow would be providing benefits to loyal customers, where frequent customers can collect chillies (points) on their loyalty card to get free dishes which also underlines the service concept.

Service Promise 

Looking at Nando’s Strengths, TNS used their TRI*M method to analyse success and growth through Nando’s customer relationship. The following image (1. Nando’s TRI*M) will show the assessment results along with another restaurant chain as a comparison (2014, p12-13).

Considering that 69 TRI*M was the average score out of the 12 restaurants which were examined, Nando’s did an excellent job with a TRI*M index of 80 and landed the first place. Comparing it to Prezzo the graph shows that there is a greater preference for Nando’s by the 4.000 customers who were questioned (2014, p2). Having a preference index of 70 is highly beneficial to Nando’s and shows that the majority of consumers prefer Nando’s over other restaurants. This shows that they must be meeting their service promise through the high customer relationship index they have received. Numbers as these can only be achieved through a solid service concept, this makes the brand memorable to customers and creates loyalty which Nando’s definitely has. Therefore, creates a great service concept outcome of high customer satisfaction, which benefits the company through profit.

Looking at Nando’s weaknesses, recent surveys show that customers were unsatisfied with some service delivery aspects such as the pre-process waits and in-process waits which also affected the food temperature negatively (Questionnaire Appendix).

The following table will show Nando’s service delivery strengths and weaknesses based on collected data and personal experiences.

Recommendations 

Since recent surveys have proven that Nando’s long waits were the most dissatisfied aspect (Questionare Appendix), which is also supported by the TripAdvisor review of another customer (Joe, 2016). In order to prevent bottlenecks, Nando’s could consider installing self-service machines like those in McDonald’s (Johnson, 2016). There can still be one worker at the till to keep the human interaction, but several machines on which to place orders could be added. This would help Nando’s to reduce the cashiers work load and cost and time effectively use labourers for their waiter and kitchen crew roles rather than placing them in the order placing area. This will also solve the problem of having the food delivered cold, reducing stress for the staff resulting in more efficient delivery of the food when it comes from the flame. However, there may not be much they could do to shorten the time customers wait for their food as it is freshly made. Therefore, Nando’s could have some entertainment programs in the restaurant like the Kung Fu Lo Mein in HaiDiLao Hotpot (Yaqoo, 2012). The will make the customers waiting time feel shorter, according to the physiology of waiting lines which David H. Maister confirms saying: “Occupied Time Feels Shorter Than Unoccupied Time.” (2005, p3).

Food variety was another shortcoming customers miss according to recent questionnaires (Questionnaire Appendix). Finding a simple solution to this which also overcomes a possible future issue would be offering vegetarian dishes such as Caldo Verde and Migas which are traditional Portuguese dishes (Foote, 2014). Doing this, Nando’s would not only solve the variety problem while staying true to their roots but also open a new target market for themselves.

Another point that was made on TripAdvisor by a first time customer was that their service delivery concept was too unclear (Joe, 2016). Nando’s, having an unusual way of ordering food by queueing at the desk and paying up front, to then wait for the food and to get own their own cutlery. This can be confusing as seen by this customers experience if not made clear how it works. Therefore, Nando’s could include their self-service concept in their advertisements (website, TV, banners outside the restaurant) so that new customers know what to expect to prevent disappointment.

Lacking in quality results in a bad repetition which Nando’s needs to try to avoid. Having burned food served to a customer (Michal284, 2016) is unacceptable. This can only be solved by offering the chefs and kitchen crew a better training, including regular quality checks.

Overall, Nando’s is one of the consumers most known and preferred restaurant. Staying true to their origins and traditions makes the company come across more natural and humanised to customers. It may even give Portuguese and African customers a feeling of home when dining in one of their UK based restaurants. Other customers may feel challenged and excited through trying something new which is not found in their country. Ratings like these, are great customer outcomes, they satisfy the customers and give them memorable experiences, which is what Nando’s tries to achieve. Positive experiences are the best way to retain knowledge, which makes customers come back and eventually generates loyal customers and frequent visitors. In a world which is build up on mass production and no personality or originality in products and services to save money, people are starting to crave the once commonly existing ‘personal touch’ and culture in a product. This is why Nando’s is successful. By sticking to their African and Portuguese roots.

Brandwatch. (2016). Social media mentions for chain restaurants worldwide in 2015, by brand*. Available: https://www.statista.com/statistics/462552/chain-restaurant-social-media-mentions-worldwide/. Last accessed 28th Dec 2016.

Foote, K. (2014). Hold The Pork: Vegetarian-Friendly Finds In Portugal’s Land Of Meat And Fish. Available: http://epicureandculture.com/vegetarian-friendly-portuguese-food/. Last accessed 5th Jan 2017.

Joe, L. (2016). A production line ‘dining’ experience. Available: https://www.tripadvisor.de/ShowUserReviews-g186338-d2216928-r363927410-Nando_s-London_England.html#mtreview_363927410. Last accessed 30th Dec 2016.

Johnson, H. (2016). Fast food workers are becoming obsolete. Available: http://www.businessinsider.de/self-service-kiosks-are-replacing-workers-2016-5?r=US&IR=T. Last accessed 5th Jan 2017.

Nando’s UK. (2016). The Story of Our New Look. Available: https://www.youtube.com/watch?v=48em4WJ2U3c. Last accessed 28th Dec 2016.

Nando’s. (2016). Explore, Our Brands Story. Available: https://www.nandos.co.uk/our-brand-story/. Last accessed 27th Dec 2016.

Maister, D. (2005). The Psychology of Waiting Lines. Available: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.487.3938&rep=rep1&type=pdf. Last accessed 5th Jan 2017.

Michal284. (2016). Never again. Available: https://www.tripadvisor.de/ShowUserReviews-g186338-d2216928-r355976507-Nando_s-London_England.html#REVIEWS. Last accessed 30th Dec 2016.

TNS (2014). Cracking the Customer Code Chain Restaurants . London: TNS. p12-13.

TNS (2014). Cracking the Customer Code Chain Restaurants . London: TNS. p2.

Yaqoo. (2012). Have some Gongfu noodles. Available: http://www.haidilao.com/sg/index.php?m=content&c=index&a=lists&catid=38. Last accessed 5th Jan 2017.

Appendices 

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Nando’s: Beyond Automation – the Team behind the technology

Nando’s was built on the solid foundations of family, integrity, pride, passion and courage. When Deon Pillay, Head of Supply Chain – Nando’s Grocery International, joined the company in 2014, he was also introduced to the motto “Have fun and make money” – in that order. In 2016, Pillay become Nando’s Head of Supply Chain, and has always endeavoured to ensure this motto is included in everything he does, and is passed on to his team and to business partners. “My role has evolved over the time I have been at Nando’s – it has been the most exciting evolution I have ever experienced. I started in the role of Logistics Manager, handling export shipments out of South Africa with one person in my team. Today, in my role, I look after the wider supply chain which is strongly focused on four primary and overarching areas: Global Production, New Product Development, Operations & Integrated Business Planning,and Product Integrity.” Despite being only nine members strong, the grocery supply chain team manages a huge portfolio of products and activities that it is incredibly proud of. “I am often guilty of making some ridiculous asks of my team and pushing them well beyond their perceived limits. Fortunately, (I believe) this has helped grow them even more than just playing safe in any comfort zone would,” adds Pillay. As supply chain and procurement operations gain momentum across a range of industries globally, no longer being viewed as back-office functions, their role at Nando’s is changing too. “The supply chain and procurement roles have been edging closer and closer to centre stage – moving closer to taking their rightful place on the mainstream business podium. 

We are continuing to integrate across all functions to bring business equilibrium to an ever-turbulent commercial world,” he says. Pillay is still concerned that supply chain does not always receive the appropriate recognition it deserves: “We are fortunate that at Nando’s the supply chain is seen as a critical cog in the company’s well-oiled machine. When I joined, supply chain – or rather logistics – was viewed as a peripheral and basic function that got containers out the door. It was a functional department tasked with handling order administration,” he adds. Since then the business has seen steady growth and the supply chain operations have transitioned to a key business discipline consisting of order administration and customer supply, logistics, packaging development, regulatory, compliance and food integrity.

“Even as a young, small team we have achieved so much,” Pillay notes. “The team has managed to be so nimble to adapt and react to changes in our ecosystem, both macro and micro. We have moved entire production capabilities and expertise across continents, we have researched, developed and implemented new packaging substrates and formats at break-neck speeds without compromising quality whilst staying current and abreast of regulations and the happenings in the industry.” 

With supply chain having significant touch points to every part of the business and fully integrating into all Nando’s functions, the department is firmly on its way through its digital transformation journey. “Digital transformation will herald a new era for us – with the business growth we have experienced it would be counter-productive to merely throw bodies at the increase in activity. We commenced our technology journey a year and a half ago and it has already yielded benefits.”

By using digital as a catalyst to handle growth, Nando’s is able to achieve more without being resource-heavy, as well as becoming more time efficient. “It allows the team to free up their time spent doing the mundane activities and focus on the value adding actions,” Pillay notes. “This has been particularly refreshing for our supply chain – so much so that we were able to extract superfluous costs out of our value chain and bring immense, sustainable value to our processes and continue to deliver these cost-saving efficiencies to the business.

“I quite often say to my team that technology is not the future, but technology is now,” enthuses Pillay. Nando’s endeavours to be a strong player in the fields of Internet of Things (IoT), Robotic Process Automation (RPA) and Blockchain. Crucial to transparency and efficiency, these technologies have caught the attention of the firm. But it is also important for Nando’s that these initiatives are fit for purpose for their business. The company is looking to introduce RPA to reduce the time associated with repetitive tasks – Nando’s made previous attempts to integrate electronic data interchange (EDI) services to tackle these issues, but found RPA more adaptable and impactful with a quicker implementation timeline. “With more focus on creating transparency in the supply chain, I firmly believe every professional in the sector will need to step up to technology or get left behind. Once you see it in action you get inspired as to how supply chain digitalisation is such a real and relatively easy win for any company,” he adds.

In December 2016, Nando’s transitioned to a new enterprise resource planning (ERP). “Our new ERP added the next layer of value to our business by providing easy access to information and allowing the team to plan and perform better. We are at the stage now where we are engaging with our partners to unlock their next level of value by developing the current workspaces or opening up new ones,”

says Pillay. He remarks upon the resilience of his team for dealing with any changes introduced to their operations: “They have an incomparable drive, discipline and enquiring mind which compliments my management style. The team have embraced all the changes and take continuous improvement firmly in their stride. “To adapt a Nando’s adage that ‘it is the people behind the chicken’,I firmly believe it is the team behind the processes, and more recently behind the technology. Technology is only as good as the team that are firmly rooted behind it and that support it. The supply chain team at Nando’s recently took a decision to reengineer it’s supply chain portfolios in order to streamline operations. “The team took on more commercially functional roles which played an important part in reprioritisation as well as shifting the focus to a more strategic mindset and way of thinking,” explains Pillay. Following the change, more focus was placed on planning, action-oriented meetings and partner engagement. “The people part is what most companies neglect or omit, which leads to inappropriate processes that do not support the technology in place.” 

As well as its focus on technology as a driver to handle growth, Nando’s recognises the importance of sustainability. Pillay remarks that the team is dedicated to ensuring a decrease in carbon emissions and the incorporation of recyclability and recycled materials. Currently, Nando’s retail products’ packaging is 99.3% recyclable, with the goal to raise the figure to 100% well underway. Nando’s has also adopted ‘Changing Lives… Together’ as its company-wide purpose statement. The business really walks the talk on this purpose and has already delivered on several initiatives to prove it. “The humbling part of Nando’s purpose for me is that Nando’s chooses not to publicise these initiatives, which shows genuine heart to live the purpose.” 

Pillay has also undertaken his own, personal project. With his passion for his job so apparent, he wants to encourage younger generations to join the industry: “I want to make supply chain a profession of choice for school leavers. Many people merely wash up on the shores of supply chain, but I want to make sure school leavers buy a ticket to board the supply chain luxury cruise. I want them to understand from the beginning what they are subscribing to, and more importantly be excited to get on board when they learn how magnanimous supply chain can be. The supply chain professional has just as much, if not more, commercial leverage within business than any other C-suite executive. The personal project I have embarked on will see complete integration of the supply chain fraternity, making talent enrichment a priority for business through a collaborative network of professionals. I’m very excited about this.”

As the proliferation of technology adoption in the supply chain sector continues, Nando’s is keen to be a key player. In food supply chains, digitalising is an absolute must to enhance the way activities are processed and executed. Getting partner buy-in is not always easy, but is always a real bonus. “Our partner companies have their own strategy on where to take their automation, but we have been fortunate to partner with companies who understand our needs as well, even though they themselves may not be ready for it in their own businesses,” Pillay explains. “In some cases, we have had our partners learn from us and implement our processes into their business; we have supported and assisted them in doing this as part of our partner engagement and development programme.

“Forming relationships and connections between partners through digital platforms is high up on our agenda. Supply chain technologies are evolving at a rapid rate and the important thing is to think of the big picture, start relatively small but try and scale up as quickly as possible. Integrated platforms allow for real time-data sharing and live updates. If you are not working towards building relationships in digital space, your reaction time to new information will slowly but surely take longer than your competitors who are becoming increasingly focused on this. Again, I cannot emphasis enough that people are more important that the technology you implement.” 

  “The future is bright for the business, but we will have to face the usual industry challenges with the added complexity of our involvement in over 30 countries. Product integrity, which is a Nando’s supply chain responsibility, continues to be firmly under our watchful eye – we want the best product with the best ingredients. We always want the best for our consumers. To achieve this, it is important we have transparency and traceability from farm to fork.” Whilst upgrading its digital offerings to ensure these challenges are met, Nando’s will never sacrifice product integrity in any way. Pillay still maintains the most important part of achieving all of this is an engaged team. We also have part of the supply chain team that is based in South Africa, the spiritual home of Nando’s. Being 10,000km away,or anywhere in the world, is not a challenge anymore with technology but there is always a vested interest by all of us to make these Nandocas feel inclusive in everything we do. Again signifying the importance of people even if they are not physically in sight. Giving an engaged team the leverage, trust and respect to act on their own and try things they can justify is key to innovation and controlled disruption. And he encourages his team to take a page from Babe Ruth who said, ‘Never let the fear of striking out, prevent you for stepping up to the plate’. Apt words from the Nando’s grocery supply chain team, which has, and continues to have, successes of hitting many out the park!  

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Critically Analysis of Nando's

Autor: Sharon   •  January 21, 2019  •  2,297 Words (10 Pages)  •  720 Views

Table 3.0.4 Common associations and human response to colors

Source: Essentials of Services Marketing

The light and colour in Nando’s tend to be warm (Appendix B), which is suitable for low involvement decisions and impulse purchased (Lovelock et al., 2009). People tend to be excited and optimistic in warm conditions (Table 3.0.4), resulting in pleasant customer experience in Nando’s. Nando’s plays lively African or Latino music, sometimes popular music. According to Caldwell and Hibbert (2002), pleasant music makes customers to spend more time on consumption and less negative emotions while waiting (Hui et al., 1997). It also makes customers creating more positive attitude towards servicescape (North and Hargreaves, 1996). The presentation of food is simple and consistent (Appendix C). It normally serves chicken along with one or two sides. There is small flag showing the level of spicy on grilled chicken so griller and customers will have knowledge of flavor. Scent in Nando’s is not strong. Some customers do not like strong scent as they do not want have smell on their clothes, but strong scents may attract customers and increase their appetite, which potentially increase revenue.

Signs, symbols and artifacts means the aspects of the service operation which have social significance (Davis and Heineke, 2005). Nando’s in Guildford has obvious sign on the street (Appendix D). The design of their menu is simple abut clear (Appendix B). Decoration in Nando’s is modern and clean. There are not many artifacts in the restaurant as their style tends to be simple. It also provides outdoor dining area which increase the maximum of capacity.

4.0 Service delivery system

Figure 4.0.1 Service blueprint of Nando’s

Source: Own

Figure 4.0.1 indicates the service delivery process in Nando’s. In terms of customer processing operations, the interaction between staff and customers is limited as Nando’s apply self-service. Quality of food and short waiting time are essential for Nando’s to improve customer satisfaction. Purchasing and storing material are back of house proceed in Nando’s. Taking orders, transmitting them to kitchen and cooking are front of house proceed in Nando’s within information processing operations. Technology is supportive role in Nando’s. The restaurant not only uses technology to collect and analyse information, but comparing data with other stores. Nando’s has reward card system (Appendix F), and customers need to register their card online or in the App. Then, the business will get information of customers.

Good designed service processes and systems need to be carried out by people with higher engagement to be effective. Staff in Nando’s are well-trained and constantly being monitored by their supervisors to ensure that they provide good customer service. Nando’s in Guildford has three till machines on the ground floor and one at upstairs. Two fire extinguishers are next to stairs and one fire alarm next to kitchen. In kitchen, it has one big griller with huge fan. There are about four staff work in the kitchen during peak time, normally just two. Maximum capacity of the restaurant is about 70 customers. It is always fully capacity during peak time. Therefore, capacity management is essential for Nando’s.

5.0 Service experience

A good customer service experience can turn new customers into loyal customers, and excellent customer service can generate positive word of mouth for the business. Nando’s promises to give customers the excellent flavor and quality that they would expect.

During the peak time, it takes about 15 to 20 minutes to wait for seats. Staff will greet customers, take their name and number of customers, and give them menu to make decision in advance. However, customers may feel bored while waiting. Nando’s could put some introductions of sauces or guidance of dining in Nando’s. It not only kills the time but helps customers to get better knowledge about Nando’s.

Customers need to order food at till once they take a seat. There will a long queue during the peak time and there is only one staff at the counter, which potentially increases the dining time of customers. Staff will take table number first; however, some customers may forget their table number or do not know they need to remember it. There could be a guidance sign on the table to remind customers about table number. Then, customers will decide the spicy level of grilled chicken and choose sides come with main dishes, and do the payment directly after ordering.

After that, customers will entre self-service process. They need to fill soft drinks and grab cutlery, tissue and other sauces for the meal. This process significantly fills the gap of waiting food, which potentially increase the pleasure of customer experience. It takes about 20 to 25 minutes to wait for food before staff will serve them. However, there should be one staff on the floor to ask and check if everything is alright with customers. Otherwise customers need to ask demand or complain at counter.

Customers will directly leave when they finish the meal. However, it feels a little bit unpleasant if customers leave without any attention from staff. The interaction between customers and staff is very little, especially during peak time. The overall experience will be unenjoyable for customers who expect pleasant service from staff.

6.0 Recommendations

Speed is significantly essential for Nando’s. If customers could order on mobile phone while they wait for seats or order online in advance, it could reduce the waiting time. Nando’s may spend extra time and cost to manage this ordering approach but this approach could increase the customer turnover and potentially increase sales and revenue.

Furthermore, Nando’s needs to recruit more staff to handle demands from customers. This may increase labour cost, but with high efficiency, more customer demands could be handled. It will increase customer satisfaction and profits.

Diversification in menu will increase customer satisfaction and revenue for Nando’s. The restaurant could focus on innovation of sides and dessert to attract and retain more customers, eventually increasing profitability.

7.0 Conclusion

To conclude, clear service concept and good food quality play essential

19 Mar The Controversial Nandos Ad: A case study

Who was the target audience?

• The South African public and people who enjoy eating chicken. There isn’t a set demographic as fast food franchises don’t necessarily have a specific target market.

What was the campaign objective?

• To advertise their variety and new products in their menu “The new Trichando and chips” and “The new peri-crusted wings and chips”. While also contributing to the discourse surrounding the issue of xenophobia in the country.

Where did they target the consumers?

• Via Television.

When did they run the campaign – was there a strategy to the timing?

• The Nando’s diversity was aired in 2012. It was during the resurgence of xenophobic attacks that had been occurring throughout the country since 2008.

intense or irrational dislike or fear of people from other countries

“Xenophobic attacks on foreigners in South Africa made international headlines in 2008, when 62 people died in a series of riots that started in a Johannesburg township. Violence against migrants has continued, including murders of Somali shopkeepers.”

I think the ad also appealed to foreigners who may have felt feelings of hypocrisy towards South Africans during this time.This ad also gave the impression of diversity and inclusivity , suggesting that Nando’s is for all not just South Africans.

• But most viewers seemed to think the ad’s message was sorely needed in a country where  at least seven people have been killed and 5,000 have been left homeless in the latest bout of anti-immigrant violence . South Africans – and those outside the country – have been involved in a huge online discussion over the attacks, with  hashtags such as # SayNoToXenophobia and # XenophobicSA being tweeted hundreds of thousands of times in recent weeks . (2015)
• “When this advert was made three years ago, there was a real sense that people wanted to speak out against xenophobic attacks,” he told BBC Trending. “The vast majority of South Africans are fully aware of the huge contribution that immigrants have made to the country, and most of us were immigrants at one stage or another. That’s a point of view that’s resonating again.”http://www.bbc.com/news/blogs-trending-32448837
• Although the South African Broadcasting Corporation (SABC) banned the ad it didn’t negatively impact brand loyalty and sales. Nando’s is known for it satirical and controversial ads.

•  Order Now

Managing Capability: Nandos

Published Date: 23 Mar 2015 Last Modified: 05 May 2017

Disclaimer: This essay has been written and submitted by students and is not an example of our work. Please click this link to view samples of our professional work witten by our professional essay writers . Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of EssayCompany.

This report aims to describe and evaluate capabilities it will use the resource based view to examine them in more detail and examine the importance of them to a firm. After this, the report will then evaluate Nandos resources and capabilities and will discuss ways in which these can create a foundation for competitive advantage. It will then use an assortment of analytical frameworks relevant with Nandos to investigate in more detail the competitive advantage they have over their competition. Finally it will then discuss how Nandos managers are able to develop and manage their capabilities.

Introduction

This report will be based around Nandos the restaurant chain. Nandos whose food, along with wacky advertising campaigns has captured the hearts of thousands of beloved customers. The origins of Nandos can be traced back to South Africa where the first restaurant opened in 1987, Robert Brozin and his friend Fernando Duarte popped into a Johannesburg restaurant called Chickenland. The chicken was the best they'd ever tasted, they thought, and promptly bought the joint. They renamed it Nando's, after Fernando, a Portuguese national (Guardian.co.uk). It's the distinctive chicken they serve, happy staff and customer service which offers a unique 'Nandos' dining experience which competitors could only hope to achieve. It has had rapid expansion overseas seeing triumph in many of the 30 countries they operate, although it has not been successful everywhere they 'laid their eggs'. In order to comprehend the strategy as well capabilities the companies possess, it is essential to look at all the pieces of the Nandos puzzle, this report will do this by drawing on real life examples of how Nandos have utilised resources and capabilities, in addition will be using analytical frameworks to support findings and present further understanding.

Resource Based View

The resource-based view of strategy proposes that both resources and capabilities are essential to success in business; Grant states it is the 'principle foundations for strategy, along with correct understanding and implementation of them, are a firm's key source of profitability'. (Grant 2009 p.NUM)

It is also important to distinguish between resources and the capabilities of a firm; resources are, 'The productive assets owned by the firm whereas capabilities are what the firm can do' (Grant 2009). One of the foremost sources of profitability is the competitive advantage in a market. 'Establishing competitive advantage can be achieved through the development and deployment of resources and capabilities, and has become the primary goal for strategy.'(Grant, R 2009 p. 124).

Furthermore, if the external environment change's frequently, then a more secure foundation is constructed using internal resources and capabilities (Grant, R 2009). This strong assortment of resources and capabilities can be used by a firm to exploit different markets in which they could complement, instead of allowing the market in which they operate along with customers to control how it functions and what it produces, further supporting the significance competitive advantage can have in a market, as well as the need to possess this.

In appendix it identifies the financial statements of the firm from February 09 to February 10. Since beginning the company in 1987 it has see continued financial success especially through 1993 to 1997, there revenue had increased by over 700%. Carrying on into the 00s the firm has seen triumph in the UK with the opening of over 200 stores by 2008(Guardian.co.uk). When looking at the balance sheets of Nandos it shows them in a strong financial position, although the £30 million pound acquisition of GBK could been seen as an unnecessary risk by some, it will allow Nandos to acquire more capabilities rather than having to develop them by themselves.

Management within Nandos shows how they are constantly innovating and this can be seen as a reason behind their success over recent years. The commitment shown for staff and management training has seen them place 33rd in the 100 best companies to work for in The Guardian, a way in which they have done this is developing training programme catered for each individual, meaning a relevance to their own job http://www.uniquesolutions.co.uk/nandos-success. Over the training period managers are retrained as well as new staff, it teaches them how to; work in a team, give constructive feedback, and finally how to build up a culture within the person which encourages teamwork and effective communication. Having this in place it ultimately leads to a boost in morale and also performance.

This effective culture of Nandos is what distinguishes them from others, it can be seen emanating from their restaurants when you enter them, it almost seems like you step into a different land or as Nandos call it ' The Nandos Experience', and is based around there 'five values: Courage, Integrity, Pride, Passion and Family'.(Nandos. Co.uk) Not many over restaurants in the industry possess such a passion to satisfy as Nandos which gives them this unique caring nature which is usually only present in smaller firms, whereas Nandos a multinational company has managed to replicate this in every single restaurant.

Another valuable resource over the past twenty years has been there reputation, helped in no small part by their wacky advertising campaigns which have drawn the attention of many. Nandos the brand is seen as thought provoking and contemporary worldwide. They also boast a superior unrivaled customer service, with the speed and quality that competitors could only dream of. Maintaining this high quality is hard and constantly under observation, Nandos conducts internal evaluations on a regular basis through 'Mystery Shoppers' that assess performance in all areas of each restaurant, providing constructive feedback to managers to help them improve. There reputation however can only be achieved by tasting the food, this experience by the customers determines solely whether they come back or not, whether they tell people or not, meaning it is crucial for each and every customer to enjoy their own 'Nandos Experience'.

The launch of Nandos saw Brozin hire the best possible team to contribute effectively to the running of his restaurant. This base of business has been replicated in all of their stores to date to ensure the best possible food and service to the customer. What Brozin achieved was a family within each Nandos restaurant consisting of employees with knowledge in all areas of running a restaurant as well as the passion and enthusiasm for great food. The way in which they communicated through the business was also informal and personal giving a closer knit feel to the business. This however does not come without problems, due to the organisation structure of Nandos it causes problems for promotion prospects due to the majority of employees being on the same level, which in turn could cause motivational problems in the workplace.

Resources and Capabilities as a source of Competitive Advantage

The nature of competitive advantage is formed through a capability or resource which have two conditions; there relevancy and there scarcity 'The benefits from these resources and capabilities depend not just on their ability to establish a competitive advantage, but also on how long that advantage can be sustained' (Grant,R 2009 p 136). Also it is dependent on how resilient the company's capabilities are; as well as if a rival company can replicate specific capabilities. Also provided is an in depth view of Nandos resources and capabilities and how they contribute to an advantage and also their sustainability (Figure 1). This report will now analyse what a core and dynamic capability is, including certain relevant examples related to Nandos. After this, I will go onto discuss in depth the connection between these and how they may be able to present Nandos with effective advantage over their competition, following on from this, I will then use certain frameworks to analyse and determine whether these are sustainable or not.

Core & Distinctive Capabilities

Grant deems that capabilities can be defined as either 'core' or 'distinctive', the differences between the two are; 'core are the main fundamental capabilities a company must possess to compete in the chosen market, whereas distinctive are ones which separate the company from the competition, giving them a competitive advantage'.(Grant 2009 p ) I will now look further into Nandos capabilities with reference to them in forms of core an distinctive.

In order for Nandos or any company for that matter, to stay in a position that is both profitable and sustainable is a very hard thing to do. The understanding of their capabilities is imperative, as if they don't understand them then they could find themselves on a path to failure. Development of capabilities can take a long time; this has become clear in the restaurant industry being one of the largest and most competitive industries. Large amounts of money and time are invested every year into new eating habits and trends within their markets to ensure they stay one step ahead. One way of acquiring capabilities through a reduced time frame is acquiring a company which already posses a valuable set of capabilities, this however does carry risks to begin with it is a large financial risk when acquiring a firm as it is a very expensive process to complete, and also when incorporating acquired capabilities with a firms already established could cause problems.

Nandos have shown over the last 10 years that they are doing something right in the restaurant industry by opening up over 200 stores in the UK alone, and high operating profit (SEE FIG). Also they have presented this success in the form of the acquisition of Gourmet Burger Kitchen, gaining new capabilities in a new section of the restaurant market. As stated by Clapham House (GBK), "The past few years have been challenging and there are difficult times remaining ahead. Nandos has extensive experience in this sector and can therefore help the business overcome its difficulties and grow into a more successful organisation." (Thisislondon.co.uk, 2010) The success of Nandos has been down to their thrive to develop a valuable base of core and distinctive competences in addition to their mergers with partners at the start of operations to minimise risks. Also how they have come out on top within an already highly populated market, providing the consumer with an all new eating experience.

Relationship between Capabilities and Resources and There Management.

An organisation with consistently successful financial performance are often distinguished by their managerial values they posses, and define the way in which the firm performs (Grant 2009). Within this report it has described how strong staff relationships and organisational capacity of Nandos has proved a valuable resource and a key part to their success over the years in the industry. Many of Nandos resources they possess are dependent on other resources in order to become a significant resource to the firm. When looking at Nandos last five years of trading they have seen a significant increase in revenue and profit (APPENDIX), meaning a financial resource for Nandos to utilise, having this resource has a huge impact on how Nandos operates and also significantly increases capabilities of Nandos, which has been shown how over the last few months as Nandos have successfully negotiated the acquisition of Gourmet Burger Kitchen. Along with this large financial capital resource, Nandos are able to deploy other resources such as R&D customer trends and eating habits every 6 months allowing them to adapt their development of capabilities to keep up with the industry. With revenues over the last few years being (FIGURE AMOUNT) it enables them to spend vast amounts of money developing new ideas for menus and updating the 'Nandos Experience' to keep customers interested, one powerful idea that has been used is the loyalty card scheme which has been a huge success in drawing in customers and to keep them coming back to eat time after time.

Gaining and maintaining a competitive advantage consists of creating and applying a strategy that utilises the inimitability of an organisations array of resources and capabilities (Grant 2009). This is a key area that is linked to the effectiveness of M&As and will become important for Nandos in the near future, as if they fail to put together an effective strategy through obtaining GBK, they may find themselves failing to gain direction in their market, which could in turn lead to incurring loss of revenue. Although GBK only opened in 2001 it has developed capabilities that other companies aspire to have, with their focus on the 'burger' it complements Nandos who focus their business around 'chicken'. They built up 45+ restaurants from 2001-2008, however they did not react to the recession over the last few years and adapt to the changing trends in the market, which lead to in 2008 to post a 39% loss of revenue. Nandos jumped at the chance to buy out GBK for £30m in Sept '10, having spotted the potential in their similar business ethoses. As Nandos have only seen rapid expansion over the last 5 years, they are only now realising their potential and adjusting their market strategy accordingly to gain a larger market share and become more competitive. With the acquisition of GBK they have been able to utlise the Unique Selling Point and resources that they offer of a powerful brand, percentage of the restaurant market and over 50 restaurants worldwide. With acquiring such an innovative business it gives Nandos advantage over their market with such unique capabilities and resources already present in both companies. Synergy How much market is worth?

Evaluating Nandos Strategic Capability

Having identified the resources and capabilities of Nandos, I will now analyse these applying certain theoretical frameworks to ascertain whether or not they have contributed to a competitive advantage. I will be using SWOT analysis, Ratio Analysis among others to gain a better insight into Nandos and the market they operate in, which will help me anaylse how strategically capable Nandos is. I will also be using up to date company reports which I have acquired from companies' house to help analyse Nandos performance.

Porters Value Chain

Infrastructure

Acquires funds, accounts and payroll are completed; administrative tasks are completed for each activity.

Human resource Management (HRM)

HRM area supervises all support participants in all activities, such as trucks and drivers for inbound logistics to supervision of restaurant workers.

Technology Development

This area of Nandos is responsible for making the company more streamlined an effective through new developments in technology, such as development of and warehouse methods, or developing new promotional materials.

Procurement

Purchase of materials needed to complete primary activities, including trucks, warehouse space and advertising space or time.

Nandos Primary Activities

Inbound Logistics

Outbound logistics, marketing & sales.

Raw Materials received and stored.

Raw material distribution to manufacturing.

Research and Development in the field to research needs of customers

Quality products developed by transforming raw materials into finished products.

*Implementation of R&D Resources.

Distribution of foodstuffs and other products from manufacturing areas to restaurants via regional distribution centres.

The marketing department develops the brand of Nandos.

*Advertising, Marketing resources are used.

Sales of food to the customer, also providing them with an experience that keeps them coming back. 'The Nandos experience'.

The value chain shown above identifies some key activities throughout Nandos. Earlier in this report it outlined many of Nandos capabilities and resources, it is clear to see the relationship that is present between resources and capabilities and how in fact these have an effect on how strategically capable Nandos is. This relationship means that the different departments of Nandos are able to support one another in a well formed and inter connected way which makes it harder for rivals to imitate, for instance 'inbound logisitics' can fail if deliveries are not met on time or materials are not of the right standard, while 'outbound logistics' would not be able to produce such high quality food designed around the consumers needs without the help of 'operations' and the R&D department within the activity, also 'marketing and sales' supports the service that offers the customer such a high quality of service, as Nandos are selling the food as well as the experience in the restaurant to the consumer. All these activities are interlinked closely with one another, so if one area fails to deliver then the whole chain can be broken, which can have drastic effects on the profit margin of Nandos.

One problem that can be seen with this piece of analysis is that it is based solely around the internal workings of a business, which consequently means no consideration of threats, opportunities or anything for that matter within the external environment around them; this can be seen as highly dangerous in a market such as Nandos, having this such problem could lead to what handy states as strategic drift, Handy states this is a 'gradual change that occurs without being noticed until it is too late to act upon' (Handy 1982). However due to the evidence stated throughout this report of Nandos completing acquisitions and constantly adapting to fit their market through their strong set of resources and capabilities it is clear this may not be a cause for concern. Nevertheless, as I feel only using the value chain would be insufficient to analyse Nandos thoroughly I have chosen to use a SWOT analysis, which used in conjunction with a value chain builds the best possible picture of how Nandos are performing strategically and takes into account the external environment to help identify threats and opportunities.

SWOT Analysis

Strong financial position despite challenging downturn in market.

Well developed brand.

Increasing market share and consumer awareness.

Customer service and employee satisfaction one of the highest in their market.

No organic and vegetarian options.

Extensive employee turnover costs Nandos.

Testing for other recipes and other meat products failed materialize, leading to inability to compete with competitors who possess these.

Opportunities

Ability to acquire similar companies to GBK.

New ways of cooking allows different flavours to be tested, attracting different consumers.

Expansion into new countries to expand portfolio.

Diversification into delivery service.

Increasing competition from rivals, pricing wars and product innovation.

Weak economy people aren't spending as much eating out.

Rising raw material costs threaten profit margins.

I have completed this SWOT analysis as a way of evaluating Nandos strategic capability. To begin with, Nandos strengths are very sturdy as they are still performing exceptionally well and have increased their gross profit margin from Feb 09 at 22% to 24% in Feb 10 APPENDIX, showing just how strongly put together Nandos is and how sustainable the business is throughout such a turbulent time in the economy, also how they have increased their gross profit in the period by £17m

There are however, certain threats from their external environment which Porters Value Chain failed to pick up on that I have managed to indentify. Due to the thriving financial position Nandos is in it is regularly investing in new restaurants, countries and more recently acquired GBK for £30 Million. For Nandos these investments are extremely expensive and will continue to become even more so through the next few years, it is imperative that they keep aware of threats from the ever changing environment to ensure they are not drifting uncontrollably away from their market and competitors through poor decisions, which ends up costing themselves vast amounts of money they are unable to recoup.

Throughout this report I have been able to establish how Nandos are managing their capabilities, through an effective breakdown of resources and capabilities, has helped with the analysis of Nandos.

Ratio Analysis

Relationship amongst resources capabilities and competitive advantage

Competitive Advantage

Industry key factors success factors

Organisational Capabilities

Financial resources

Management structure

Skills/Know-how

Capacity for communication and collaboration

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