Innovation Management: Assessing Issues and Strategies for Nando's Australia

This research aims to assess the issues faced by Nando's Australia and recommend strategies for improvement. It discusses the costs incurred, innovative measures, and benefits of creative processes. The strategies and responses to be undertaken by the organization are also illustrated.

Running head: INNOVATION MANAGEMENT
INNOVATION MANAGEMENT
Name of the student
Name of the university
Author note

1INNOVATION MANAGEMENT
Executive summary
The research will aim at assessing the issues that are being encountered by Nando’s Australia
and the recommended strategies that might be considered by the same while developing the
operations. The research also developed discussion on the different costs that might be incurred
by the organization while implementing the modifications. The innovative measures that might
be undertaken by the organization is being discussed in the research along with the benefits of
the creative processes. The strategies and responses that might be undertaken by the organization
are being illustrated as a part of the research which has enabled in enhancing the study.

2INNOVATION MANAGEMENT
Table of Contents
Part 1- Problem................................................................................................................................4
1.1Background.............................................................................................................................4
1.2Definition of the problem.......................................................................................................4
1.3Evidence of the problem.........................................................................................................4
1.4Timing considerations............................................................................................................5
1.5Considerations of the broader context....................................................................................6
Part 2- Benefit..................................................................................................................................6
2.1Benefit to the be delivered......................................................................................................6
2.2Importance of the benefits to the government........................................................................6
2.3Evidence of benefit delivery...................................................................................................7
2.4Interdependencies...................................................................................................................7
Part 3- Strategic response................................................................................................................7
3.1Method and response..............................................................................................................7
3.2Strategic options analysis.......................................................................................................8
3.2.1Strategic Intervention...........................................................................................................8
3.2.2Strategic options..................................................................................................................8
3.2.3Ranking of strategic options................................................................................................9
3.3Recommended strategic option.............................................................................................10
Part 4- Project options analysis......................................................................................................11

3INNOVATION MANAGEMENT
4.2Stakeholder identification and consultation..........................................................................11
4.3Social Impacts.......................................................................................................................11
4.4Economic impacts.................................................................................................................11
4.5Cost benefit analysis.............................................................................................................12
4.6Risk.......................................................................................................................................13
Part 5- Deliverability of the recommended solution......................................................................13
5.1Details of recommended solutions........................................................................................13
5.2Detailed costing....................................................................................................................13
5.3Management.........................................................................................................................16
References......................................................................................................................................17
Appendix: Canvas Model..............................................................................................................19

4INNOVATION MANAGEMENT
Part 1- Problem
1.1Background
Nando's is a South African restaurant chain, which specializes in peri-
peri style chicken and other dishes which has assisted the venture in developing the loyalty of the
customers. The concerned organization was founded in the year1987 and is headquartered in
Johannesburg. The developments that are made by the organization are reliant on the authentic
and innovative dishes that assisted the venture in retaining the attention of the target customers.
However, apart from all the establishments, the concerned organization faced different issues
which affected the competitive benefit while operating in a market.
1.2Definition of the problem
The concerned organization, Nando’s Chicken, faced a substantial issue in their
Australian units which referred to the degrading quality of the foods and the filthy kitchens
where the foods are prepared. The degradation in the quality has affected the brand image of the
venture as well as incapacitated the same in retaining the trust and loyalty of the customers.
Kwon, Lee & Shin (2014) opined that the degrading quality of the operations and the product
offerings of an organization affects the capabilities of the same in retaining the trust ad loyalty of
the customers. Therefore, the quality related issues has affected the capabilities of the concerned
organization in developing their product offerings while operating in different regions of
Australia. On the other hand, the developments in the communicability through the social media
platforms and negative word of mouth has affected the brand image of the venture.

5INNOVATION MANAGEMENT
1.3Evidence of the problem
The concerned organization was accused for quality related issues that affected the
interests of the customers. It was found that the Northbridge and at Belmont Forum stores of the
concerned organization, Nando’s, violated the regulations that were set by WA Department of
Health’s food standards (Akgün et al., 2014). The lack of suitable adherence to the guidance of the
food safety and security has affected the capabilities of the organization in improving the
efficiency of the operations in adherence to the demand of the customers. It was found that the
filth in the kitchens and the rotten food that was reused by the units for serving the customers
affected the propositions of the same (Androniceanu, 2017). On the other hand, the escalation of
the issues failed to evoke suitable feedbacks from the management of the units. It has affected
the trust and loyalty of the customers. In a report it was portrayed that the food offerings of the
organization consisted of maggots and the kitchen had rats (Wong, Tseng & Tan, 2014). Portrayal
of such quality related issues in the different media vehicles incapacitated the concerned
organization in retaining the trust and confidence of the customers towards the product offerings.
1.4Timing considerations
The issue is required to be resolved with the aim of maintaining the efficiency of the
operations while retaining the trust and confidence of the consumers. The different changes that
are undertaken by the organizations are dependent on the smooth functioning of the system in
adherence to the demand of the customers. The enhancements in the quality of the food offerings
of the venture would assist the same in developing the potentials of the same while operating in
different international markets. Pimentel and Major (2014) opined that quality is the primary
priority that must be adhered by the organizations. Therefore, the concerned organization must

6INNOVATION MANAGEMENT
take steps to develop suitable quality management mechanism on an urgent basis as it would
assist the same in developing the trust and confidence of the customers.
1.5Considerations of the broader context
The enhancement in the quality of the operations would assist the venture in developing
the potentials of the same while operating in different international markets. The considerations
of quality management would assist the concerned organization in retaining the brand image and
prevent negative word of mouth to expand the scope of its sales revenue.
Part 2- Benefit
2.1Benefit to the be delivered
The benefits that will be accumulated by the concerned organization through mitigating
of the issues is related to the improvements in the trust and confidence related factors among the
customers. On the other hand, the mitigation of the quality related issues would support the
organization in adhering to the standards and conducts related to food and beverage safety
(Molina-Azorín et al., 2015). The major benefit that will be gathered by the organization through
the mitigation of the issue is related to the enhancement in the sales volume of the same while
operating in different international markets.
2.2Importance of the benefits to the government
The benefits will ensure that the different rules and regulations that are framed by the
same are adhered which will assist in maintaining the efficiency of the corporate culture. On the
other hand, Jaca and Psomas (2015) noted that the adherence to the food and beverage safety
related guidelines would assist the government in ensuring the safety and security of its citizen
while monitoring and controlling the activities of the concerned organization.

7INNOVATION MANAGEMENT
2.3Evidence of benefit delivery
The KPIs that might be considered by the organization while managing the change in the
organizational operations are related to the maximization of the sales volume by 10% annually.
The KPIs will assist the venture in developing a positive insight on the effectiveness of the
change that is being planned by the same. The enhancement in the sales volume would support
the organization in delineating the market position of the same and the enhancement of the trust
and confidence among the consumers. Almeida, Domingues and Sampaio (2014) stated that the
KPIs assist an organization in monitoring and controlling the operations of the same while
adhering to the demand of the customers. Therefore, the efficiency of the measurements will
assist the venture in developing the operations of the same while operating in different
international markets.
2.4Interdependencies
The organizational change will be reliant on the decisions that are undertaken by the
management authorities in South Africa. The different changes in the processes will be based on
the efficiency of the project managers and the change agents. Benavides-Velasco et al., (2014)
stated that the delineation of the change agents and the role that they play in the organizational
modifications assist a venture in developing a coherent and systematic process which will ensure
the smooth functioning of the systems. Therefore, the changes that are undertaken by Nando’s
would assist the same in improving the efficiency of the operations in adherence to the demand
of the customers.

8INNOVATION MANAGEMENT
Part 3- Strategic response
3.1Method and response
The methods of response that might be undertaken by the concerned organization
Nando’s is dependent on the efficiency of the operations in adherence to the demand of the
consumers. The concerned organization must take steps to develop a range of operations with the
objective of improving the trust and loyalty of the target customers. The major assumptions that
might be undertaken by the organization are reliant on the choice and safety based needs of the
consumers (Augusto, Lisboa & Yasin, 2014). It will assist the venture in developing the operations
of the same while assuring the consumers of the quality of the food and beverages that are being
delivered by the organization.
3.2Strategic options analysis
3.2.1Strategic Intervention
Intervention 1 Consumer needs relating to quality of the
products
Intervention 2 Regulations and guidelines that are enforced
by the government
Intervention 3 Developing the brand image of the
organization
Intervention 4 Sustenance in highly competitive markets
3.2.2Strategic options

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Strategic
Intervention
s
Option 1 Option 2 Option 3
Intervention
1
Developing
the product
portfolio
Enhanced
social media
promotions
Sales
promotions
and offers
Intervention
2
Adhering to
the
guidelines
Negotiating
with the
government
Establishing
modification
s in the
processes
Intervention
3
Social
media
marketing
Encouraging
the
involvement
of the
customers
through
contests
Enhancing
the quality of
the offerings
Intervention
4
Diversifyin
g the
offerings
Pricing
consideration
s
Developing
sound
monitoring
and control
activities
3.2.3Ranking of strategic options
Option 1 Option 2 Option 3
Diversifying
product
portfolio
Enhanced
quality of
the
offerings
Aggressive
promotionsBenefits
Percentage
of full
benefit to
be
delivered
30% 67% 3%
Benefi
t 1
Increasing
scope of
attracting
customers
Increasing
trust and
confidence
of
customers
Increasing
awareness
among the
customers
Benefi Competitive Enhanceme Developing

10INNOVATION MANAGEMENT
t 2 edge nt in sales
volume
suitable
processes
through
feedbacks
Benefi
t 3
Enhanced
sales based
on different
preferences
Adherence
to the
standards
and
guidelines
imposed by
the
government
Competitive
edge
Cost
Estimated
capital
investment
cost
(Range)
$4600 -
$5000
$4000 -
$6500
$3700 - $4500
Estimated
operationa
l costs
(Range)
$2800 -
$3000pa
$3000 -
$3500 pa
$2800 - $3400
pa
(Range) mm-mm mm-mm mm-mm
Time
(Range) 6- 8 months 1-
1.5
year
s
5-
7mont
hs
Risks
Risk 1 Lack of
suitable
understandin
g of
consumer
needs
Lack of
sufficient
monitoring
and control
Negative
interpretation
of the message
Risk 2 Diminished
quality of
offerings
Falsification
of reports
Lack of
understanding
of the target
audience
Dis-
benefits
Dis-
benefit 1
Enhanced
costs of
operations
Increased
cost of
operations
Negative
promotion
Dis- Greater Failure of Lack of

11INNOVATION MANAGEMENT
benefit 2 portfolio
require huge
monitoring
units
the
monitoring
and
controlling
mechanisms
suitable
investment
options
Ranking
1-3 3 1 2
3.3Recommended strategic option
The recommended strategic option that might be considered by Nando’s will be the
enhancement of the quality as it will assist the venture in developing the potentialities of the are
in maintaining the efficiency of the operations while adhering to the demand of the customers.
The enhanced quality of the operations will assist the venture in developing the positive brand
image of the same while operating in different business situations.
Part 4- Project options analysis
4.2Stakeholder identification and consultation
The major stakeholders of the concerned venture are the customers, the project managers,
the investors, the suppliers, government and the board of directors. The integrated functioning of
the stakeholders assist an organization in developing the operations of the same while operating
on the different objectives of the venture.
4.3Social Impacts
The social impact of the organizational operations are reliant on the inclination of the
Australians towards the quality of the products. The enhanced quality of the offerings will assist
the venture in developing the operations in adherence to the need of sustenance.

12INNOVATION MANAGEMENT
4.4Economic impacts
The enhanced quality of the offerings will ensure the organization in developing the
strategic propositions to enhance the rate of sales volume. The developments that are made by
the organization has assisted the venture in developing the potentials of the same while operating
in different international markets.

13INNOVATION MANAGEMENT
4.5Cost benefit analysis
QUANTITATIVE ANALYSIS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL
NON-RECURRING COSTS
Hardware 250.00$ 280.00$ 310.00$ 340.00$ 370.00$ 1,550.00$
Servers 200.00$ 220.00$ 240.00$ 260.00$ 280.00$ 1,200.00$
Desktop 280.00$ 300.00$ 320.00$ 340.00$ 360.00$ 1,600.00$
Telecommunication Equipment 300.00$ 320.00$ 340.00$ 360.00$ 380.00$ 1,700.00$
Software (Packaged or Custom) 320.00$ 350.00$ 380.00$ 410.00$ 440.00$ 1,900.00$
Computer Room Upgrades 160.00$ 180.00$ 200.00$ 220.00$ 240.00$ 1,000.00$
Furniture and Fixtures 400.00$ 420.00$ 440.00$ 460.00$ 480.00$ 2,200.00$
Project Organizational/Support Costs 700.00$ 730.00$ 760.00$ 790.00$ 820.00$ 3,800.00$
Planning (upon Approval) 200.00$ 220.00$ 240.00$ 260.00$ 280.00$ 1,200.00$
Procurement 300.00$ 320.00$ 340.00$ 360.00$ 380.00$ 1,700.00$
Contract Negotiations 120.00$ 150.00$ 180.00$ 210.00$ 240.00$ 900.00$
Labor 800.00$ 850.00$ 900.00$ 950.00$ 1,000.00$ 4,500.00$
Infrastructure 760.00$ 800.00$ 840.00$ 880.00$ 920.00$ 4,200.00$
Development 900.00$ 930.00$ 960.00$ 990.00$ 1,020.00$ 4,800.00$
Business Process Owners (Users) 950.00$ 1,000.00$ 1,050.00$ 1,100.00$ 1,150.00$ 5,250.00$
Management 700.00$ 730.00$ 760.00$ 790.00$ 820.00$ 3,800.00$
Training of Employees (Pre-Implementation) 650.00$ 680.00$ 710.00$ 740.00$ 770.00$ 3,550.00$
Transition Costs (Parallel Systems) 350.00$ 390.00$ 430.00$ 470.00$ 510.00$ 2,150.00$
Post-Implementation Reviews 400.00$ 430.00$ 460.00$ 490.00$ 520.00$ 2,300.00$
TOTAL NON-RECURRING COSTS 8,740.00$ 9,300.00$ 9,860.00$ 10,420.00$ 10,980.00$ 49,300.00$
RECURRING COSTS
Hardware/Software 300.00$ 320.00$ 340.00$ 360.00$ 380.00$ 1,700.00$
Software Maintenance and Upgrades 320.00$ 350.00$ 380.00$ 410.00$ 440.00$ 1,900.00$
Computer Supplies 160.00$ 180.00$ 200.00$ 220.00$ 240.00$ 1,000.00$
Desktops (Incremental to the Project) 400.00$ 420.00$ 440.00$ 460.00$ 480.00$ 2,200.00$
Help Desk Support 700.00$ 730.00$ 760.00$ 790.00$ 820.00$ 3,800.00$
Ongoing Additional Labor 200.00$ 220.00$ 240.00$ 260.00$ 280.00$ 1,200.00$
IT Staff Costs (including Benefits) 300.00$ 320.00$ 340.00$ 360.00$ 380.00$ 1,700.00$
User Training 120.00$ 150.00$ 180.00$ 210.00$ 240.00$ 900.00$
Other 160.00$ 180.00$ 200.00$ 220.00$ 240.00$ 1,000.00$
Telecommunications 400.00$ 420.00$ 440.00$ 460.00$ 480.00$ 2,200.00$
Office Leases 700.00$ 730.00$ 760.00$ 790.00$ 820.00$ 3,800.00$
TOTAL RECURRING COSTS 3,760.00$ 4,020.00$ 4,280.00$ 4,540.00$ 4,800.00$ 21,400.00$
TOTAL COSTS 12,500.00$ 13,320.00$ 14,140.00$ 14,960.00$ 15,780.00$ 70,700.00$
QUANTITATIVE BENEFITS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL
REVENUES
Stores 700.00$ 730.00$ 760.00$ 790.00$ 820.00$ 3,800.00$
Online medium 200.00$ 220.00$ 240.00$ 260.00$ 280.00$ 1,200.00$
-$
TOTAL REVENUES 900.00$ 950.00$ 1,000.00$ 1,050.00$ 1,100.00$ 5,000.00$
COST SAVINGS
Decreased Cost of Services Provided 120.00$ 150.00$ 180.00$ 210.00$ 240.00$ 900.00$
Savings from Business Process Improvements 800.00$ 850.00$ 900.00$ 950.00$ 1,000.00$ 4,500.00$
Productivity Gains 760.00$ 800.00$ 840.00$ 880.00$ 920.00$ 4,200.00$
Savings from Structural Changes 900.00$ 930.00$ 960.00$ 990.00$ 1,020.00$ 4,800.00$
Savings from Optimized Information (or Flow) 950.00$ 1,000.00$ 1,050.00$ 1,100.00$ 1,150.00$ 5,250.00$
Decreased Information Publishing Cost 700.00$ 730.00$ 760.00$ 790.00$ 820.00$ 3,800.00$
Reduced Staffing Cost (including Overtime) 650.00$ 680.00$ 710.00$ 740.00$ 770.00$ 3,550.00$
Reduced Staff Turnover Costs 200.00$ 220.00$ 240.00$ 260.00$ 280.00$ 1,200.00$
TOTAL COST SAVINGS 5,080.00$ 5,360.00$ 5,640.00$ 5,920.00$ 6,200.00$ 28,200.00$
COST AVOIDANCE
Cost avoidance 700.00$ 730.00$ 760.00$ 790.00$ 820.00$ 3,800.00$
TOTAL COST AVOIDANCE 700.00$ 730.00$ 760.00$ 790.00$ 820.00$ 3,800.00$
OTHER BENEFITS
Promotional campaign benefits 950.00$ 1,000.00$ 1,050.00$ 1,100.00$ 1,150.00$ 5,250.00$
-$
TOTAL OTHER BENEFITS 950.00$ 1,000.00$ 1,050.00$ 1,100.00$ 1,150.00$ 5,250.00$
TOTAL BENEFITS 7,630.00$ 8,040.00$ 8,450.00$ 8,860.00$ 9,270.00$ 42,250.00$

14INNOVATION MANAGEMENT
4.6Risk
The major risks that might be encountered by the concerned organization are reliant on
the breakdown of the quality related mechanisms. The quality driven mechanisms of the
organization would assist in enhancing the operations while gaining the trust of the customers.
However, the lack of suitable quality control measures might affect the potentials of the venture.
Part 5- Deliverability of the recommended solution
5.1Details of recommended solutions
The recommended actions that might be undertaken by the organization are reliant on the
effectiveness of the operations while enhancing the quality of the propositions. The enhanced
quality of the propositions through the involvement of a number of mechanisms relating to
monitoring and control would assist the venture in developing the potentials of the same.
5.2Detailed costing
BASE COST ESTIMATE
Effective date of BCE:
05/10/20
Estimated date of
commencement of store
restructuring: 06/10/20
Amount
1 Direct
Costs
1.1 Materials $1,000.00
1.2 Labour $1,200.00

15INNOVATION MANAGEMENT
1.3 Plant Hire $2,500.00
Sub total $4,700.00
2 Indirect
Costs
2.1 Recurrent
overheads
2.1.1 Site facilities $1,200.00
2.1.2 Plant & Equipment
– site maintenance
$1,300.00
2.1.3 Project management
costs
$1,380.00
2.1.4 Commercial $1,100.00
2.1.5 QA and Safety $1,500.00
2.2 Non-recurrent
overheads
2.2.1 Establishment and
mobilisation
$800.00
2.2.2 Disestablishment
and demobilisation
$1,300.00
2.2.3 Project insurances $1,500.00
2.2.4 Professional fees –
design, legal,
financial, etc
$1,650.00

16INNOVATION MANAGEMENT
Subtotal $11,730.0
0
3 Owner’s
Cost
3.1 Contracted
professional staff
$400.00
3.2 Investigations $650.00
3.3 Store design
renovation costs &
resumptions
$760.00
3.4 Authority fees $550.00
3.5 Owner supplied
plant and
equipment
$1,200.00
Subtotal $3,560.00
4 Contractor’
s Fee
4.1 Profit margin $760.00
4.2 Corporate
Overheads
$800.00
Subtotal $1,560.00
5 Provisional
Sums

17INNOVATION MANAGEMENT
5.1 $200.00
Subtotal $200.00
TOTAL OF BASE COST
ESTIMATE
$21,750.0
0
5.3Management
The concerned organization must take steps to develop a decentralized model of decision
making which will enable the same in enhancing the rate of decisions, monitoring and
controlling activities in the different strategic units throughout the world. On the other hand, the
enhanced rate of communication would assist the venture in developing the operations of the
venture while operating in the diverse fields.

18INNOVATION MANAGEMENT
References
Akgün, A. E., Ince, H., Imamoglu, S. Z., Keskin, H., & Kocoglu, İ. (2014). The mediator role of
learning capability and business innovativeness between total quality management and
financial performance. International Journal of Production Research, 52(3), 888-901.
Almeida, J., Domingues, P., & Sampaio, P. (2014). Different perspectives on management
systems integration. Total Quality Management & Business Excellence, 25(3-4), 338-
351.
Androniceanu, A. (2017). The three-dimensional approach of Total Quality Management, an
essential strategic option for business excellence. Amfiteatru Economic, 19(44), 61-78.
Augusto, M. G., Lisboa, J. V., & Yasin, M. M. (2014). Organisational performance and
innovation in the context of a total quality management philosophy: An empirical
investigation. Total Quality Management & Business Excellence, 25(9-10), 1141-1155.
Benavides-Velasco, C. A., Quintana-García, C., & Marchante-Lara, M. (2014). Total quality
management, corporate social responsibility and performance in the hotel
industry. International Journal of Hospitality Management, 41, 77-87.
Jaca, C., & Psomas, E. (2015). Total quality management practices and performance outcomes in
Spanish service companies. Total Quality Management & Business Excellence, 26(9-10),
958-970.
Kwon, O., Lee, N., & Shin, B. (2014). Data quality management, data usage experience and
acquisition intention of big data analytics. International journal of information
management, 34(3), 387-394.

19INNOVATION MANAGEMENT
Molina-Azorín, J. F., Tarí, J. J., Pereira-Moliner, J., Lopez-Gamero, M. D., & Pertusa-Ortega, E.
M. (2015). The effects of quality and environmental management on competitive
advantage: A mixed methods study in the hotel industry. Tourism Management, 50, 41-
54.
Pimentel, L., & Major, M. J. (2014). Quality management and a balanced scorecard as
supporting frameworks for a new management model and organisational change. Total
Quality Management & Business Excellence, 25(7-8), 763-775.
Wong, W. P., Tseng, M. L., & Tan, K. H. (2014). A business process management capabilities
perspective on organisation performance. Total Quality Management & Business
Excellence, 25(5-6), 602-617.

20INNOVATION MANAGEMENT
Appendix: Canvas Model
Customer Segments
 Foodies within the
age band of 18- 45
years
Value Proposition
 Wide range of
authentic foods and
beverages
 Quality propositions
 Customised services
for loyal customers.
 Training and
development to
existing and new
employees.
Customer Relationships
 Personalised
communication
 Surveys through
Facebook, twitter
and Instagram
Channels
 Direct Selling
 Sale through
intermediaries
Key Activities
 Undertaking supply
of raw food materials
 Processing materials
 Developing finished
products
Key Resources
 Raw materials
 Physical Resources
 Transportation.
 Storage facilities.
 Skilled Human
Resources
Key Partners Revenue Structure Cost Structure
 Fee for the retail

21INNOVATION MANAGEMENT
 Strategic Alliances
 Coopetition
 Joint Ventures
 Suppliers
 Distributors
 Advertising.
 Social media
promotions
 Personalized mails
chain stores being
established.
 Software
Development.
 Employee fees.
 Cost of Production.