Case Study

Nando$$s

Nando$$s is a well$-$known restaurant in chain in South Africa. Robert Brozin, B Com $($Wits$)$

was the entrepreneur who created the Nando$$s concept in $1987.$ He took the idea of peri$-$peri

flame$-$grilled chicken from being secret among the Portuguese community, who had come to

Johannesburg from Mozambique and set up a company that would allow all South Africans to

experience the fabulous taste.

Nando$$s grew from a single restaurant $($store$)$ in $1987$ to four outlets in $1990$ and then $45$ outlets

in $1995$ with an additional $17$ in other southern African countries $($Namibia$,$ Botswana,

Zimbabwe and Swaziland$).$ By the end of $1997,$ there were $117$ stores. By the end of $2003,$

there were $450$ stores around the world with $186$ of them being in South Africa.

The mission and culture of Nando$$s is clear to all members of the organisation. It is best

summarised in the expression of the $$Nando$$s Experience $$that guides the approach to the

market:$-$

$$ We will take you on a journey, your own voyage of discovery

$$ You will come to discover how special it is to belong to the Nando$$s family

$$ You will experience our traditional hospitality, warmth and fun.

$$ Your senses will be fired with the unique products and taste of Portugal $$ all prepared

with pride and passion.

$$ And here, you will be touched by the magic that is the Nando$$s way.

This spirit of adventure is carried through in their advertising and is designed to be provocative,

topical and interesting, generating public comment and debate.

The running of Nando$$s store is based on certain established structures, models and systems.

Expected break$-$even is known and the ongoing performance and profitability is carefully

monitored. Equally important to the performance of a store is the selection of store managers.

These individuals and the staff that work with them require an ability and character that carries

forward the culture of Nando$$s$,$ as described above. Training and operations manuals carry

through on the requirement.

In going international, Nando$$s kept up their strategies on the assumption that humor and

irrelevance would be sound positioning strategies worldwide. The belief was that Nando$$s

culture was transportable. This belief proved to be true. However, beyond remaining true to

this core culture, Nando$$s $$globalized$.$ They had to meet the needs of local markets. Differing

tastes, menu preferences, the requirement for halal standards for foods, all required processes

and kitchen modifications to meet customer needs.

From the six Ps $($People$,$ product, promotion, public relations and place$)$ of Nando$$s marketing,

the issue of place was seen as crucial. Place determined the number of potential customers and

the design of the store and menu to suit the surroundings $($and established the Nando$$s

differentiation required$).$ The product was also carefully designed and monitored as it was seen

as $80\%$ service and $20\%$ goods. Nando$$s aimed at creating a tradition, a culture and a way of

life. It wanted customers to be drawn to the magic and warm hospitability that is the Nando$$s

way$-$in everything it did, it wanted to create a sense of an older, less complicated and more

personal world, where the spirit of Afro$-$Portugal thrived.

Besides the Nando$$s experience, Nando$$s also manufactures branded retail food products that

are distributed through various retail outlets.

Extract from Operations Management $-$ Global And Southern African Perspectives $($Paperback$,2$nd

Edition$)$ M$.$ Pycraft, H$.$ Singh, K$.$ Phihlela, N Slack, S$.$ Chambers, R$.$ Johnston, Pg $12.$

Questions

a$)$ Nando$$s growth from a single restaurant to a global brand is remarkable.

Analyze the operational strategies and management practices that contributed to this rapid

expansion. How does Nando$$s ensure consistent performance and profitability across its

stores? Discuss the role of break$-$even analysis, ongoing performance monitoring, and the

selection and training of store managers in maintaining operational efficiency. How do

these practices align with Nando$$s mission and culture, and what impact do they have on

the customer experience? $(20$ marks$)$

b$)$ Examine the critical elements of Nando$$s transformation process that enabled its successful

international expansion. Focus on the operational challenges and strategic decisions related

to standardization and localization. How did Nando$$s balance maintaining its unique brand

culture with the need to adapt to diverse market preferences and regulatory requirements?

Evaluate the effectiveness of their approach using the Six Ps $($People$,$ Product, Promotion,

Public Relations, Place, and Process$)$ framework, and provide recommendations for further

improvement. $(20$ marks$)$