Nando's Australia: Business Innovation and Sustainability Report

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This report analyzes the challenges faced by Nando's Australia, particularly concerning food quality and customer loyalty, stemming from issues like pest infestations and poor sanitation. The report identifies the problem, offers insights through a fishbone diagram, and explores potential solutions, including Integrated Pest Management, trained personnel recruitment, quality checks, and automated pest detection. The selected solution focuses on implementing an automated pest detection and control mechanism to minimize human error, reduce operational costs, and enhance the customer experience, particularly for the primary target market of millennial customers. The value proposition emphasizes improved food safety and hygiene, leading to increased customer trust and a competitive advantage over rivals like KFC and McDonald's. The report concludes with a strategic fit analysis and addresses uncertainties related to customer desirability, technical feasibility, and financial viability, ultimately aiming to ensure Nando's sustainable business development.
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Running head: INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Name of the student
Name of the university
Author note
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1INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Introduction to Nando’s Australia
The concerned organization, Nando’s, is a South African restaurant chain which
specialized in peri-peri style chicken dishes. The organization was founded in the year 1987 in
Johannesburg and developed branches in different regions of the world (Nandos.com, 2019). The
different changes that are initiated by the organization are specifically based on identification of
the needs and preferences of the customers (Nandos.com, 2019). The subtle changes in the
dishes and preparations permit the venture in gaining a sustainable edge while expanding in the
different markets. However, in the recent years the organization faced different issues which
minimized the rate of expansion and sustenance of the venture in stiffened market competitions.
The research will examine the issues and thereby develop recommended innovations with the
objective of mitigating the issues.
The problem to be solved
The major problem that is being faced by the organization, Nando’s, is related to the
quality of the chicken food offerings which resulted to loss of loyal customer base. It has been
reported that Nando’s stores in Perth was convicted of poor sanitation ad hygiene facilities in the
cooking areas which resulted to an increase in the rodent activities (Abc.net.au., 2017). On the
other hand, a customer reported and filmed maggots in a chicken meal served by the organization
in their Kotara store, which is about 160 kilometers north of Sydney (Abc.net.au., 2017). The
lack of efficient monitoring and quality related supervision activities in the organization affected
the brand image and the customer loyalty towards the offerings that are made by the same. The
organization apologized to the customers for the bad experience but the organizational position
was compromised due to lack of due diligence. Therefore, the problem must be taken into
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2INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Lack of Pest
control
activity
Lack of
monitoring
and reporting
Lack of
trained
personnel
Lack of
policies
relating to
quality
standards
OutcomeCauses
Quality
issues
Fishbone diagram
consideration by the organization with the objective of retaining the trust and loyalty of the
customers over the propositions that are planned by the venture.
Problem insight
The problem relating to faltering quality occurred in the organization due to the lack of
efficient monitoring and evaluation programs. On the other hand, the absence of pest control
related operations of the venture affected the rate of operations of the venture while operating as
per the needs of the customers.
Figure: Fishbone of Nando’s
(Source: Author)
It has been noted that most of the target customers of the organization are millennial
(GenY), which focuses more on the quality of experience over the price of the offerings that are
proposed by the ventures (Dhang, 2018). The bad experience of dining in Nando’s restricted the
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3INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
organization in retaining the trust of the customer group while proposing promotional offers on
the offerings. The organization also failed to adhere to the requirements as per the ISO 22000
certification (Silva, Fonsecav & Sousa, 2016). On the other hand, the organization also faced
significant issues in improving the quality of the propositions due to the absence of micro-
management principles in the organizational culture. The various issues that are being faced by
the organization are related to the lack of trained personnel, absence of policies adhering to the
quality standards, the lack of sufficient pest control activity and absence of monitoring and
reporting related operations. The quality related issues affected the brand image of the venture
while losing a group of loyal customers.
Portfolio of generated solution concepts
The different alternative solutions that might be applied by the organization are being
discussed in this section of the research:
Developing Integrated Pest Management (IPM) program: The introduction of
Integrated Pest Management program would permit the venture in minimizing the pest
activity. The pheromones traps might be utilized by the organizations with the objective
of improving the efficiency of the operations while reducing the pest activities (Lowe et
al., 2019). The application of pest control mechanisms would permit the organization in
minimizing the risks of pests in kitchen. On the other hand, the regulations related to
sanitation can be maintained through the effective implementation of the IPM program
in the organizational operations.
Recruiting trained personnel: The recruitment of trained personnel as the staff members
of the organization would permit the same in improving the quality of the propositions in
placement with the needs of the customers. The trained employees in the organization
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4INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
would contribute to the improvements in the quality of the propositions through their
enhanced knowledge and skills in maintaining the sanitation and hygiene related needs
(Grasswitz, 2019). The recruitment of trained employees in the organization will also
permit the venture in improving the productivity of the same while minimizing flaws in
the quality of the products.
Undertaking quality checks: The organization might take steps to conduct weekly
quality checks through introducing an analyst. The quality analyst would permit the
organization in identifying the quality related issues that are faced by the food
manufacturing and distribution units (Gunawan, Lau & Vansteenwegen, 2016). The
quality checks would permit the organization in examining the major sources of the issue
relating to sanitation and hygiene and thereby mitigate the same with the objective of
enhancing the rate of operations of the venture.
Developing automated pest detection mechanisms: The development of modernized
automated pest detection mechanisms would permit the organization in tracking the
levels of pest which will support the organization in minimizing human dependence or
intervention in managing and reporting pests. The mechanism will be induced with
micro-motion detectors which would read the movement of pests and emit a semi-
poisonous gas, Pyrethrum, automatically which would permit the organization in
inducing automated Pest Management process. However, the gas would not be harmful
for human consumption as the lack of Piperonyl butoxide would leave the same as a non-
poisonous substance to the human body (Song & Yu, 2016). The development of the
automated pest detection and management mechanism would permit the organization in
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5INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
reducing the overall costs of undertaking continuous quality checks or undertaking
collaboration with other pest controlling agencies.
Solution selection analysis
The organization might take steps to develop automated pest detection and control
mechanism as it would permit the venture in minimizing the human dependence which might be
flawed at times. On the other hand, the implementation of automated pest detection and control
mechanism would permit the organization in minimizing the recurring operational costs that
would have been incurred by the same otherwise. The recruitment of skilled quality analyst and
conduction of periodical pest treatments would affect the rate of operation of the venture while
expanding in the different markets (Liu & Sinnott, 2018). The automated technology would
permit the venture in minimizing the risks of human negligence towards sanitation and hygiene
while working on tight schedules. Therefore, the organization might take steps to implement the
automated pest detection and control mechanism with the objective of reducing the rate of pest
activity while cutting the costs of quality control and monitoring operations for better expansion
related scopes.
Value proposition and benefits
The implementation of the automated pest detection and control mechanism would
permit the organization in minimizing the operational costs which would have been incurred by
the same for monitoring, reporting and controlling the pest activities for quality improvement of
the propositions. On the other hand, the minimization of different operational costs would permit
the venture in improving the rate of expansion related activities.
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6INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Figure: Value proposition canvas
(Source: Shumba & Zindiye, 2018)
The implementation of the pest detection and control mechanism would contribute to the
organizational efforts of identifying the origin of the pests and temporarily disable the same
through minimized human efforts. It would support the organization in maximizing the quality of
the propositions while minimizing the pest and rodent activities. The enhanced value of the
propositions will be based on the effective sanitation and hygiene related considerations of the
venture while operating in the different markets (Shumba & Zindiye, 2018). Therefore, the
implementation of the new automated technology in the organization would permit the venture in
retaining the loyalty and trust of the customers through improved value for money.
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7INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Targeted customers
The primarily targeted customers for the organization would remain the same, GenY
millennials, the students within the age group of 16- 36 years. Secondarily the organization will
be targeting a wider group of customers which will include people from all working groups and
age ranging from 24- 60 years. The implementation of the new automated technology for pest
and rodent control and management would permit the organization in minimizing the risks of
rodents or maggots being found in the meals. On the other hand, the implementation of the new
automated technology would permit the organization in bucking up for proposing the customers
with an extraordinary dining experience. As the primary target market of the organization are the
GenY, who are ore driven towards the experience rather than the money that is being spent by
the same, would permit the venture in retaining the trust and loyalty of the customers (Gunawan,
Lau & Vansteenwegen, (2016). Technological reform in the organizational operations through
the introduction of the new innovation would permit the venture in improving the service
propositions while minimizing the recurring operational investments. On the other hand, the
organization would be able to retain the loyalty of the primary group of customers.
Competitive advantage
The idea of implanting the new automated technology of managing and controlling
rodents and pests would permit the organization in gaining a competitive benefit over the other
players in the markets like KFC and McDonalds (Nandos.com, 2019). The lack of such
technological innovations in the market would permit Nando’s in developing trust and loyalty
among the customers. On the other hand, the implementation of the automated technology would
permit the organization in staying ahead of the competition while minimizing the recurring costs
of operations. In this relation, the different steps that would be initiated by the organization
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8INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Strategic Fit
Automated monitoring
Automated control of pest and rodents
No human intervention
No harmful poisons used in the process
Organizational reputation Loss of potential customers
Avoiding Human errors Competitive needs
would permit the venture in drawing the attention of the target customers towards the safe and
value- added propositions. Therefore, the application of the new technology would allow the
venture in developing trust and confidence among the target customers while maximizing the
sales volume of the same.
Strategic fit
The strategic fit of the organization is reliant on identifying the importance of the
decision that is being planned by the venture. In this relation, the organizational reputation is at
stake due to the poor quality of propositions made by the same, which affected the loyalty of the
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9INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
customers. The loss of potential customers affected the sales volume of the venture. Therefore,
the application of the new technology would enable the organization in enhancing the quality of
the propositions while adhering to the needs of the customers. On the other hand, the
implementation of the automated process would permit the organization in minimizing the rate
of human intervention and errors relating to sanitation and hygiene. Therefore, the application of
fully automated technology for monitoring and controlling rodents and pests would support the
organization in gaining a competitive position in the markets through the retention of trust and
confidence of the target customers.
Uncertainty related to customer desirability, technical feasibility and financial viability Uncertainty related to customer desirability: The utilization of Pyrethrum as an agent of
disabling the pests and rodents might not be accepted by most of the Australians. The
major cause of uncertainty while utilizing the technology is related to the lack of
consumer knowledge on the composition of the natural pesticide as they might believe
that the chemical might get infused with the food while harming their health. The
resistance from the customers might affect the organization’s capability of introducing
the new technology. Technical feasibility: The organization would be able to hire technical experts for the
implementation of the project. However, the project might fail due to schedule overruns
which might affect sustainable implementation of the project. On the other hand, the
complexity of the project design might be another important cause for the project failure. Financial viability: The financial viability of the organization is noticed through their
maximized source of profits and revenues which would enable the organization in
spending for the technology. However, there are different issues that might be faced by
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10INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
the organization due to lack of proficient procurement opportunities which might affect
the capability of the organization while incurring costs for a technological
implementation.
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11INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
References
Abc.net.au. (2017). Nando's says sorry after customer films maggot-infested chicken. Retrieved
25 August 2019, from https://www.abc.net.au/news/2017-10-10/nandos-apologises-after-
customers-served-maggot-infested-chicken/9033812?pfmredir=sm
Dhang, P. (2018). The evolution of baiting in pest control. International Pest Control, 60(5),
260-263.
Grasswitz, T. R. (2019). Integrated Pest Management (IPM) for Small-Scale Farms in Developed
Economies: Challenges and Opportunities. Insects, 10(6), 179.
Gunawan, A., Lau, H. C., & Vansteenwegen, P. (2016). Orienteering problem: A survey of
recent variants, solution approaches and applications. European Journal of Operational
Research, 255(2), 315-332.
Liu, C., & Sinnott, R. O. (2018, May). A Platform for Exploring Social Media Analytics of Fast
Food Restaurants in Australia. In International Conference on Computational Science
and Its Applications (pp. 231-244). Springer, Cham.
Lowe, E. C., Latty, T., Webb, C. E., Whitehouse, M. E., & Saunders, M. E. (2019). Engaging
urban stakeholders in the sustainable management of arthropod pests. Journal of Pest
Science, 1-16.
Nandos.com (2019). Nando's Home- Australia. [online] Nandos.com.au. Available at:
https://www.nandos.com.au/ [Accessed 25 Aug. 2019].
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12INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Shumba, K., & Zindiye, S. (2018). Success Factors of Franchise Entrepreneurs Operating in a
Volatile Business Environment: A Case of the Fast Food Industry Harare,
Zimbabwe. The Social Sciences, 13(4), 908-91.
Silva, M. M., Fonseca, L. M., & Sousa, S. D. (2016). The impact of ISO 9001: 2015 on ISO
22000 and food safety management systems (FSMS). Calitatea, 17(152), 81.
Song, Y., & Yu, G. (2016). Properties of solution set of tensor complementarity
problem. Journal of Optimization Theory and Applications, 170(1), 85-96.
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13INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Appendix: Business Model Canvas
Key Partners
Collaborati
ons with
different
meat
suppliers
Distributors
Governmen
t
Key Activities
Developing
preparations
based on the
preferences
of the
customers
Promotional
activities.
Improving
the financial
activities.
Value Proposition
Specialized
chicken
preparations
Improved
quality
proposition
Customizabl
e dishes
Customer
Relationships
Communica
tion
through
social
media
platforms
Customer
Segments
Primary
market of
Millennials
(between
the age of
24- 40
years)
Secondary
wider
market of
mixed
population
whose age
ranges from
24-60 years
Prefers
authentic
chicken
dishes
Key Resources
Collaboratio
n with
different
organizations
Sponsorships
.
Channels
Online
advertising
Social
media
advertiseme
nts
Cost Structure
Operational costs
Cost of raw materials
Cost of implementing technologies
R&D costs
Taxation
Revenue Streams
Sales
Sponsorships
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14INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
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