Introduction
External and Internal Environment Analysis of Nando’s will be evaluated in this report by applying PESTEL, SWOT and Porter’s five forces model. Nando’s is the most famous chicken restaurant in Africa and provides services in many countries. It has 1200 restaurants in 30 countries of the world and created a higher demand for its foods in the countries (African BR, 2019). Peri-Peri chicken is the major dish which is the speciality of the restaurant, and it is an African dish. It has 34,000 employees globally and generated £779.4 Million in revenue last year (Craft, 2020). Pizza Hut, Burger King, Hard Rock Café, and KFC are the key competitors of Nando’s (Owler, 2020).
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Pestle Analysis of Nando’s:
PESTLE refers to the six external environments such as the political, economic, social, technological, legal and economic environment. All these environments impact the executions of companies. PESTLE analysis of Nando’s has been evaluated below:
Political Environment: Nando’s can become aware of the influence of political factors on their operations, and they can take significant steps. Brexit is a political factor that has an impact on Nando’s because the food price may be higher, and the supply of foods from the EU may reduce (Food Manufacture, 2020). The higher price of food will increase Nando’s operating costs, and the lack of food supply will create problems in fulfilling customers’ demands.
Economic Environment: Economic environment refers to the economic factors that have an impact on Nando’s business. Nando’s have closed all their restaurants in the UK to stop the spread of COVID-19 (Mirror, 2020). It refers to the enormous loss that the restaurant is facing and it will take a long time to recover from the loss because COVID-19 will bring global recession also. As a result, the financial instability of people will not let them spend money on Nando’s food.
Social Environment: Nando’s will be able to know the effect of social factors on their business through analysing the social environment. Many UK people avoid Nando’s because they think the restaurant provides unhealthy foods but they do not know that the restaurant provides healthy and fresh chicken. Nando’s have to promote their foods more to know people about their healthy foods.
Technological environment: Analysis of the technological environment has shown Nando’s the technological factors that can foster their growth. The company have identified the increasing demand for home delivery and recently started home delivery from 6 restaurants in the UK through ‘Deliveroo’ (LAD BIBLE, 2020). The restaurant should increase its online services in future to increase revenue. It refers that the advancement of the internet is fostering Nando’s growth.
Legal Environment: Legal environment refers to the influence of legal factors on Nando’s and it helps the company to consider the legal factors in order to escape the penalty of the UK government. For instance, Nando’s provides fresh chicken and does not refreeze the chickens, which maintains the health laws of the UK. Therefore, the UK government do not interfere in the operations of Nando’s.
Ecological Environment: With the analysis of the ecological environment, Nando’s become aware of acting in the right way and can take steps to reduce the negative impact of their operations in the environment. For instance, Nando’s uses a 100% renewable electricity supply in the UK that reduces pollution in the country (Nando’s, 2020). As a result, the environmental laws of the UK are maintained, and the people of the UK remain satisfied with Nando’s after seeing that they are filling own responsibility of reducing pollution.
SWOT Analysis of Nando’s:
SWOT analysis refers to the factors: strengths, weaknesses, opportunities and threats. SWOT analysis of Nando’s has been analysed beneath:
| Strengths Nando’s focuses on its interior decoration, and each of the outlets has a different interior than the others. An attractive interior such as artwork of local artists on the wall attracts people to spend quality time. UK people love the taste of peri-peri which helped Nando’s to jump in sales by about £1 billion for the first time (Insider Publications Limited, 2019). Peri-Peri chicken which is made from peri-peri chillies and the unique sauces of Nando’s makes customers maintain the unique flavour of their chicken dishes more than competitors. The black card of Nando’s offers unlimited food in their outlets, and it is used to attain customers’ attention toward themselves, but the card is offered to privileged guests. | Weakness Nando’s is a good brand, but it does apply attractive marketing promotion that competitors like Pizza Hut, Burger King and others competitors do. The restaurant focus on delivering peri-peri chicken which tastes different than other chicken dishes, which means that Nando’s depends on the dish greatly. Competitors of the company deliver different dishes with a variety of tastes whereas Nando’s has limited dishes. They greatly depend on their franchises because most of the restaurants are operated by franchisees. |
| Opportunities The restaurant has to provide home delivery to capture a huge customer base in the UK who have less time and interest to visit restaurants to have food. Nando’s have great recognition in the UK, but they will be capable of capturing more customers in the country by introducing new food items with new tastes. | Threats MC Donald’s, Burger King, Pizza hut, KFC, Hard Rock Café, California Pizza Chicken etcetera are the competitors that compete strongly with Nando’s (Owler, 2020). The competitors can reduce Nando’s customers by being more customer focused. The industry Nando’s operate business have fewer entry barriers therefore competition is increasing both locally and internationally. |
Competitive analysis of Nando’s
Porter’s Five Forces Model of Nando’s:
Porter’s five forces model is the tool that analyses the competitive position of a company, and they can prepare themselves to compete strongly. Porter’s five forces model analysis of Nando’s has been evaluated beneath:
The threat of new entrants: Nando’s has 392 which increases the power of the restaurant in front of new entrants (Nando’s Statistics, 2020). New entrants will need higher investment to make a presence in the UK market like the company, which indicates the low power of new entrants toward Nando’s.
The threat of substitutes: The restaurant provides their specialised chicken with secret recipe sauces and no restaurants in the UK sell the dishes like Nando’s (Mhlanga, 2018). It refers to the lower threat of substitutes for the restaurant’s food because other restaurants do not deliver the dishes that Nando’s produces.
Bargaining power of buyers: Nando’s is famous for its peri-peri chicken with its special sauces; therefore, customers who want to taste peri-peri chicken have to visit Nando’s instead of other restaurants. As a result, customers’ force becomes lower in front of the restaurant because they are the unique chicken dishes provider in the UK (Mhlanga, 2018).
Bargaining power of suppliers: The raw materials Nando’s needs are available in the UK, and many suppliers supply these raw materials. Because of the availability of the raw materials and lower switching costs, suppliers are weak and cannot dominate the executions of Nando’s (Horwitz, 2017). Even suppliers are interested in working with Nando’s for their own growth, which makes the supplier’s force weaker.
Competitive rivalry: Nando’s faces high competition in the UK market, and MC Donald’s, Burger King, Pizza hut, KFC, Hard Rock Café etcetera are the competitors that compete strongly with Nando’s (Owler, 2020). The competitors deliver varieties of foods with brought menus and do effective promotions that can attract Nando’s customers toward the competitors in future.
Reference
African BR, 2019. Nando’s. Retrieved from: https://africa.businesschief.com/Nando’s/profiles/145/From-street-food-to-high-street [Assessed on: 20 May 2020]
Craft, 2020. Nando’s. Retrieved from: https://craft.co/nando-s [Assessed on: 20 May 2020]
Nando’s, 2020. For the planet. Retrieved from: https://www.nandos.co.uk/explore/being-sustainable/planet [Assessed on: 20 May 2020]
Nando’s Statistics, 2020. Rate your Nando’s. Retrieved from: https://www.rateyournandos.com/nandos-statistics [Assessed on: 20 May 2020]
Owler, 2020. Hard Rock’s Competitors, Revenue, Number of Employees, Funding and Acquisitions. Retrieved from: https://www.owler.com/company/hardrock [Assessed on: 20 May 2020]