Business Environment of Nando's: Analysis of Strategies & Operations

This report provides a comprehensive analysis of the business environment of Nando's, a fast-food chain specializing in Peri-Peri style chicken. It begins by discussing the company's organizational structure, highlighting its hierarchical approach and large size, and examines the scope of its operations in the global market. The report delves into the interrelationships between different functional departments such as marketing, finance, human resources, and operations, emphasizing how their coordination impacts the company's overall performance. Furthermore, it analyses the external and internal forces affecting Nando's through PESTLE and SWOT analyses, identifying opportunities, threats, strengths, and weaknesses. Finally, the report explores the impact of globalization on Nando's business strategies, particularly in terms of market expansion and sourcing cost-effective raw materials. This document is available on Desklib, a platform providing study tools and resources for students.

Project title :Business
Environment (BMS412)

Table of Contents
Introduction......................................................................................................................................3
MAIN BODY...................................................................................................................................3
Discussion of the Key types, size and scope of Nandos company:............................................3
Discussion of the interrelationship between functions of organisational structure:...................5
Analysing external and internal forces of the company:.............................................................6
Discussion of impact of globalisation on business strategies and operations:............................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................10

Introduction
The environment in which business operates is complex and highly uncertain in nature.
The business environment is considered as the collection of internal and external forces that can
put a strong influence on the business strategies and functions of the organisation. It includes
forces such as customers, suppliers, government and many more that can influence sustainability
of business in the market. For this report Nandos is taken into consideration, which is the famous
fast food chain that specialises in making Peri-Peri style chicken and the company is based in
south Africa, Johannesburg. The report will highlight the different types ,size and scope of the
company. In addition to this, the report will analyse interrelationship between function of the
organisation. The report will further analyse internal and external forces by performing SWOT
and PESTEL analysis. Moreover, the report will include the effect of globalisation on company
decision-making power.
MAIN BODY
Discussion of the Key types, size and scope of Nandos company:
The following are different types of organisation:
Hierarchical structure:
This type of structure is also known as pyramid shaped structure in which chain of
command flows from top level mangers to the lowest level employees in a well structured and
systematic manner. This structure properly describe the levels of authority and responsibilities of
each and every employee of the company(Khajeheian, Friedrichsen and Mödinger, 2018).

Functional structure:
This type of structure is similar to hierarchical structure in terms flow of responsibility
from top level managers to the lowest level. In this, the employees are divided and organised
according to their type of knowledge and expertise. For example: the financial knowledge
employees takes responsibility of managing financial department of the company.
Horizontal structure:
In this type, bureaucracy level is less as compared to other types of organisation structure
and undertakes less supervision to lower level employees. This type of structure gives employees
an opportunity to take more responsibilities. In addition to this, this structure helps the company
in implementing new ideas faster through practising open communication channels.
In context to Nandos, the company follows Hierarchical type structure which allows the
company to run its operations in the systematic and proper manner by focusing who will report
to whom. In addition to this, it helps the employee of company to perform better by providing
them an opportunity for promotion to higher job roles. However, this structure may slow down
crucial changes because of increased bureaucracy(Gaganis, Pasiouras and Voulgari, 2019).
The following are different size of organisation:
Small organisations:
The small market cap company basically involves simple management structure and
format which can be be easy to define and change according to the requirements to change. This
type of organisation is solely managed by top level managers due to limited and manageable
tasks.
Medium sized organisation:
The medium sized company is basically run and operated under the ownership of family
members. In this, the delegation of authority is non existent as the company runs under direct
supervision of family members. In addition to this, the market cap of medium sized company are
larger than that of small company.
Large organisation:
In this, the company runs its business operations covering the larger amount of space,
human resources and financial resources. It represents complex management structure which
includes many departments , different managerial levels and designations. In relation to this, it is

must for large scale organisation to effectively plan in order to deal with inernal and external
market forces(Nikitina and Lapiņa, 2019).
In context to Nandos, this global organisation follows large size of structure which
supports the company to take advantage of economies of scale and can also power the company
to enter into unexplored market effectively. However, the large scale operation can pose a
challenge in front of the company to deal with the external parties involved such as government
in the appropriate manner.
Scope of the Nandos company:
The company has the brighter scope in the global market since it specialises in providing
delicious grilled Peri-Peri chicken which helped the company to successfully tap into foreign
markets. The company has also established its name in the first restaurant group in Europe with
an approved and scientific based target approach for reducing carbon emissions which helps the
company to form positive image in the eye of government of other countries. The company
functions in the large scale and have huge amount of human and financial resources that supports
the company to take bigger actions in order to enter new markets. In addition to this, the proper
and systematic structure of the company can support its future growth and developmental
strategies to enhance market share and growth. In addition to this, the hierarchical structure of
the company can support the firm in implementing the change strategies in an efficient manner
which can broaden the scope of company to attract large number of customers in the market.
Discussion of the interrelationship between functions of organisational structure:
The business functions are combined together effectively in order to achieve the targets
and goals of the company(Akhtar and Sushil, 2018). The following points explains about the
impact of interrelationship between functions of different departments to the operation of Nandos
company:
Relationship of Marketing and Financial department:
The marketing department is accountable for creating a value to the customers by
satisfying customer needs and desires. Whereas the financial department is responsible for
funding in order to undertake marketing activities in the most effective and creative manner. In
relation to Nandos, the company practices proper relationship between marketing and financial
department to ensure smooth functioning of marketing campaigns and the market growth
strategies of the company. In addition to this, it also helps the firm in designing discount coupons

and cash vouchers that support the company to attract the large base of customers. Moreover,
this assist the company in forming adequate budget structure in order to develop new distribution
channels which helps the company to effectively tap into foreign markets(Chen, Xu and Zhai,
2019).
Relationship of finance and human resource department:
The finance department deals with making short term and long term budgets in order to
carry business operations without disturbances. Whereas the human resource department is
concerned with recruiting and retaining new employees in order to maintain smooth operation of
the company. In context to Nandos, the company ensures proper relationship between finance
and human resource department by providing a financially skilled staff members. In addition to
this, the finance department provides assistance to HR department for undertaking training and
development programs for employees which helps the company to build a competitive workforce
with various skills and knowledge.
Relationship between operations and financial department:
The operations department is responsible for ensuring that adequate raw materials is
available at the right time and at the right place and ensures the management of inventory.
Whereas, finance department is concerned with managing cash inflows and outflows in the
company. In context to Nandos, the relationship between finance and operation department helps
the firm to plan budgets in order to carry day to day operational activities effectively and helps
the business to expand the operations in foreign markets. In addition to this, it supports the firm
to undertake investment projects which helps the firm to enter into new market conditions
effectively(Vankevich, 2019).
Analysing external and internal forces of the company:
The use business model such as PESTEL and SWOT analysis supports the organisation
in assessing and evaluating the internal and external factors which can influence the working of
company in the market. The following are the evaluation of business models that will allow the
Nandos firm in assessing and predicting potential threats in market efficiently.
PESTLE analysis:
This business tool will help the company to predict the impact of external forces to its
operations. The following elements of this model are:
Political force:

The emergence of Brexit policy has negatively affect the supply chain process of Nandos
company in UK market. Due to complex paperwork involved and tighter worker rules of Brexit,
the company was forced to shut some stores in UK.
Economic force:
The increase in global inflation rates poses a challenge in front of the company to sell
products in the cost effective manner. In addition to this, the alterations in exchange rates can
also negatively affect the profitability of the firm(Madsen and Grønseth, 2022).
Social force:
The shift from non vegetarian diets to vegetarian diets by large number of people in
different countries posses a great challenge to the company in terms of profit and the market
growth in foreign countries.
Technological force:
The increase in the use of social media platforms such as Instagram or Facebook provides
a great opportunity for the company to tap into unexplored market by posting its delicious food
pictures that will attract customers to try.
Legal force:
The change in export and import law in UK due to Brexit has put threat to its operations
in the country. The tightness in health and safety law among different countries provides an
opportunity for the firm to expand global operations(Tang, 2021).
Environmental force:
The environmental forces such as tsunami can put damage to its stores and its operations.
The increased focus of people on saving nature has put positive influence on company as the
firm adopts advanced methods to minimise carbon emissions.
SWOT Analysis:
The following are SWOT analysis of Nandos that will highlight the
strength,weakness,opportunities and threat of the company.
Strength:
The main strength of the company is to make a delicious grilled Peri-Peri chicken which
gained a significant attraction from large number of customers in foreign market. In relation to
this, the impeccable service delivery is considered as its strength that helped it tap foreign
markets effectively.

Weakness:
The company has lesser food items in their menu that is considered as the weakness of
company. Along with it, the firm fails to provide customisation options according to the local
food of some Asian countries. In addition to this, the increased dependence on franchising for its
business growth is considered as its weakness as the company has to look for its revenues from
the cost of franchising(Teoli, Sanvictores and An, 2019).
Opportunity:
The increase in desire of customers to eat special and specific cuisines worldwide
provides an golden opportunity in front of company to grab it as the firm provides special
cuisine dishes at an affordable rates. Moreover, it can help the company to increase its market
share in the foreign markets.
Threat:
The increase of competition in the food industry and the entry of new food companies
such as subway puts an important threat to the profitability of the company. In relation to this,
the low barriers to entry in this sector is also headlined as the main threat that can challenge
future operations of the company(Sabir and Gorus, 2019).
Discussion of impact of globalisation on business strategies and operations:
The term globalisation is termed as removal of trade related barriers in order to foster free
flow of goods and services across different countries of the world. The globalisation supported
the company to choose most cost effective raw materials that helps them to sell products with
higher profits margins. In addition to this, it provides an opportunity for the company to employ
people of different culture with different ideas and beliefs can assist the company in making
competitive and growth oriented business strategies. The followings points shows the influence
of globalisation on the business strategies of Nandos company:
Exploring foreign markets:
The globalisation has greatly influenced the company to increase its market growth into
foreign markets. Due to globalisation, it is possible for the company to establish operations
across national borders. In relation to Nandos, the globalisation supports the company adopt
effectively with foreign market trends related to the tastes and preferences of the customer. It
helps the firm reduce its production cost by taking the advantage of economies of scale. In
relation to this, the globalisation has opened the door for the company to serve diverse needs of

customers which allowed the firm to earn higher amount of profits(Kostiuk, Kalinová and
Kučera, 2021).
Leadership and decision making:
The globalisation has lead to change in decision making and leadership style of the
companies globally. The globalisation drivers such as increased competition has lead the firm to
transform leadership styles from authoritarian to participatory style that helps the company to
make more innovative ideas in decision making process. In context to Nandos, the drivers of
globalisation has put strong influence on the decision-making capacity in order to tap into
unexplored market conditions. Due to globalisation, the customers can check the reviews and
products of the company while sitting from anywhere in the world. This has forced the company
to focus on their needs and wants in order to build the global reputation.
Risk taking:
The internationalisation of business organisation has exposed the company to the risks
involved in the growth expansion process. In addition to this, it allowed the management to
undertake vital strategies in order to overcome risks present in expansion into foreign markets. In
context to Nandos, the growth of globalisation has allowed the firm to utilise risk management
tools in order to minimise the risks and associated effects. Furthermore, the globalisation has
lead the firm undertake certain risk analysis tools before implementing vital strategies that helps
the company to avoid wastage of resources and also leads to reduced time consumption(Takiyar,
and Rao, 2020).
Increased competition :
The presence of higher competition in domestic market is the main aspect that allow the
company to increase its foreign market operations. In relation to Nandos, the higher competition
in the market has forced to the company to expand its operations in foreign market by changing
its strategies into focusing more on foreign markets rather than domestic market conditions.
Reduction of Barriers to global trade:
The reduction of barriers related to exchange of products across different countries has
lead the firm to enter into global markets. In context to Nandos, the reduction in the international
trade barrier has allowed the firm to easily enter into new markets while spending less on tariffs
associated with import and export of raw materials.

Conclusion
It has been analysed from above report that business environment is the crucial factor that
can influence the operations and developmental strategies of the company. It has been
understood from above report that there are different types and structure of the company that
caters the specific purpose and the vision. In addition to this, it was analysed that
interdependency between functions of company is crucial to meet with business objectives in the
most effective . Moreover, it has been evaluated that internal and external factors of environment
are strong influencers of sustainability of the company. Furthermore, it was concluded that
globalisation has completely transformed the way company thinks and perform actions.
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