BMS412: Nando's Case Study - Business Environment Analysis Report

This report provides a comprehensive analysis of Nando's, a fast-food chain specializing in Portuguese African cuisine. It begins by classifying Nando's based on its type, size, and scope within the business landscape. The report then delves into the interrelationship of various functions within the organization's structure, highlighting how departments like HR, marketing, finance, and production interact to achieve organizational goals. A significant portion is dedicated to internal and external environmental factors, using SWOT and PESTLE analyses to evaluate strengths, weaknesses, opportunities, threats, political, economic, social, technological, environmental, and legal influences on Nando's operations. Finally, the report assesses the impact of globalization on Nando's organizational strategy and decision-making processes, considering its expansion into international markets and adaptation to global trends.

Business Environment
(BMS412)

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
The type, size and scope of the Nando’s..................................................................................................3
The interrelationship of functions on organization structure....................................................................5
Internal and external influencers via a PESTLE and SWOT analyses on business operations.................6
The influence of globalization on organizational strategy and decision making......................................8
CONCLUSION.........................................................................................................................................10
REFERENCES..........................................................................................................................................11

INTRODUCTION
The organizations are formed legally as per the structure and works in the environment
which consists of all the external and internal factors like customer expectations and needs,
workforce, supply, demand, owners, government, technology, etc. The external factors has a
huge influence on the working of the businesses and impacts the decision making of the firm.
The term business environment mainly states all the external factors, institutions and forces
which are not in control of the business and also affect its working and functioning. It brings
both the threat and opportunity for the companies so it is important to understand it so that the
management can plan its future and further decision making (Hillary, 2017). The organization
chosen for this report is Nando’s, a fast food chain of South Africa which mainly specializes in
the Portuguese African food. It was founded in the year 1987. This report shall cover the type,
scope and size of company, internal and external analysis, interrelationship of the departments
and the influence of the globalization on business strategy and its decision making
MAIN BODY
The type, size and scope of the Nando’s.
There are different types of business organizations which are formed legally. These are
discussed below-
Private organizations
These are those businesses which are owned and managed by the private people and its
funds are raised individually by the owner either from its own savings or by way of loans or
investments. The main purpose of this is to generate maximum revenue and rearn more of the
profits (Cravo and Piza, 2019). Various types of business organization are narrated below-
 Sole proprietorship- These are managed and owned by the single person who is called
the sole proprietor. The decision making power and all authorities rest in the hand of
single owner. He is personally liable for the debts and liabilities of the firm.
 Partnership- These types of businesses are run and owned by two or more people who
are known as partners. They mutually decide to share their losses, profits, decision

making power, responsibilities and contribution of capital. They are also personally liable
for the liabilities of firm.
 Companies- These are the separate legal entity where the member is distinct from its
company which means it can be sue and can sue anyone. It is an artificial personality
which has its own common seal. The shareholders elect the board of directors who
represent their interest and run the company, keeping in mind their interest.
Nando’s is a private owned business that is owned by entrepreneurs who sets the business
initially. It deals in the fast food industry. It was founded in the year 1987 and its genre is the
Portuguese African style.
Type of businesses on the basis of size
 Micro- These are those type of business which employs less than 9 employees in its
working. The turnover of this business is less than 2 million pounds.
 Small- These are the business which employs more than 10 employees but less than
50. Their turnover is less than 5 million pounds.
 Medium- These include those businesses that employ more than 50 employees but
less than 250 workers. Their annual turnover is expected to be less than 50 million
pounds.
 Large- The businesses of these categories employs more than 250 workforces and
their turnover per annum is more than 50 million pounds (Smith, 2017).
Nando’s is a large company which serves the customers worldwide. It has approximately
1000 outlets in almost 35 countries.
Background
Nando’s is the fast food chain of South Africa which specializes in the food which is
mainly Portugiese African style which also includes the flame grilled per- peri styled chicken. It
was founded in the year 1987 in Johannesburg, South Africa and is headquartered in the same
place. It mainly deals in the chicken and related cuisines which are commonly made in fast food
style (Willcocks, 2018).

The interrelationship of functions on organization structure.
The organizational structure is the system which provides the method in which the
activities of the business is divided, coordinated and organized. These are created by the
companies in order to coordinate the activities of the work factors and also control the
performance of the employees. Nando’s is the private restaurant which consists of various
branches in some of the parts of the world. By considering each of the branches, it follows the
tall categorized structure wherein it has the restaurant manager at the top, following the assistant
managers. Then the assistant is the executive and then it has trainee manager and lastly the floor
manager. It includes the shift running floor manager and in this, the shift running is at the top and
the trainees are in the bottom. The floor manager manages other employees (Stumpf, 2019).
Interrelationship of the functions
There are various departments being formed in Nando’s that manages the working of the
restaurant. The interrelationship among each other in Nando’s is narrated thereunder-
 Human resource and marketing- The human resource functional unit is entrusted with
the role of recruiting the workforce into the organization so that its functions can be
carried on while the marketing department has the role of planning such strategies which
can help in promoting the offering to the customers with an aim to attract them. They
both work together as the marketing unit requires the creative staff for preparing the
creative strategies to attract consumers and these are given to it by the HR department as
it hire the employees, keeping in mind the requirement of the marketing department.
They both function together so that the organizational goals are achieved effectively and
with good coordination.
 Finance and production- The finance unit manages the finance of the company and
allocate the budget to each department so that they can carry it their functions smoothly.
The production or kitchen department is engaged in preparing the food for the customers
so that their demand and needs are fulfilled. They both altogether so that the customers
are served with their demands. The kitchen unit requires sufficient ingredients, raw
material, equipment and many other things for carrying out its operation for which the

finance unit provide funds. Without the support of finance unit, it cannot function
properly.
 Research and development and Information technology- The R&D unit is busy is
carrying on the research in order to identify the demand in market, working of
competitors and the latest technologies. The IT unit is entrusted in deploying sufficient
technology in the business so that working of the restaurant can be made easy. Without
proper research, IT cannot work on deploying the technological equipment so it is
important for both the functional units to work together (Contractor and et. al., 2020)
Internal and external influencers via a PESTLE and SWOT analyses on business operations.
Internal analysis of the business is very essential as it helps in understanding the strength
and opportunity of the company so that it can get prepared for overcoming the threats and
weakness. The SWOT analysis is a framework which is used to analyze the internal factors that
are discussed below in context to Nando’s-
Strength Weakness
 The biggest strength of Nando’s is its
branding outlets across the world. Its
global presence shows that the
company has developed with many
branches in different countries.
 Another strength is its food item and
sauces. Nando’s delivers the fresh
chicken and not the frozen which
attracts the customers. Its sauces are
unique with the secret recipe which is
not known to the public (Akhtar and
Sushil, 2018).
 There is lack of marketing
advertisements of Nando’s which is its
biggest weakness as it its other
competitors does aggressive marketing
to attract the customers.
 The Nando’s does not come up with
new varieties soon as compared to its
competitors. The company has weak
research and development team that is
unable to conduct the market research
in order to identify the needs of the
customers.
Opportunities Threats
 The expansion is one of the best
opportunities for Nando’s as it will help
in increasing the revenues. It can move
 The competitors such as KFC is the
biggest threat to Nando’s as they
provide better edge or promotions that

to different markets in order to serve
the customers so that its customer base
is enhanced.
 Nando’s can get engage in the using the
social media platforms and use
technology in its outlet in order to serve
the customers. As people have become
more technological savvy, it will help
in attracting them.
can make the customers go.
 Another threat is its menu which of
limited items that too with the main
emphasizes on the chickens. It must
increase its menu so that more
customers are attracted.
External analysis is an important part of the business as it helps in the decision making.
There is a heavy influence of these factors which affect the functioning of the company. PESTLE
analysis is being discussed below so that its influence is identified. In context to Nando’s, it is
narrated thereunder-
 Political- It is concerned with the extent to which there is government interference in the
company and other political factors. In relation to Nando’s, the political stability in the
states can help company to foster and grow as there will be less amendments in the rules
and regulations framed. Moreover any instability of government can affect the working
of the business.
 Economic- It includes the factors which are relating to the economy such as inflation
rate, foreign exchange rates, etc. In relation to Nando’s, the impact of economic factor is
that when there is high inflation in the country, the Nando’s may get affected as the
purchasing power of people tend to decline while in low inflation rate, there will be high
spending power so the customers may consume the fast food easily.
 Social- It is concerned with the socio cultural factors which can affect the demand and
supply of the offering of business. In relation to Nando’s, the shift from fast food to
healthy food may affect demand of the offering of Nando’s. The company does not offer
any healthy item which may result in losing the customer (Luiz, Ganson and Wennmann,
2019).
 Technological- It is concerned with adaptation of the technology in the business in order
to ease the customers. In relation to Nando’s, the impact of this factor is that the company

is engaging in adopting the technologies such as digital payments, online delivery which
can help in providing enhanced services to the customers so that they can get the best
experience from Nando’s. It will also help in maintaining the loyalty customer base. It
also has the lasted technology equipment for grilling, baking and cooking so that fast and
efficient services are delivered to the consumers.
 Environmental- It is concerned with the working of business which can affect the
environment. The Nando’s makes sure that its functioning does not cause much pollution
that can harm the ecology. It has deployed such machineries for cooking food that causes
less emission.
 Legal- It is concerned with the laws and regulations which are to be followed by every
business. The Nando’s makes sure that it complies with every legislation and standards of
every state where it has expanded its operations so that they do not face any hardship or
consequences. It is essential for Nando’s to take care of the food standards and comply
with it so that the quality is not compromised.
The influence of globalization on organizational strategy and decision making
The term globalization can be connoted to describe growing interdependence of the
economies, populations and culture of the world in the technologies, flow of people and
investment, information and goods and services which are brought by the cross border trade. The
uncertainty and the turbulence in global environment have increased the complexities of strategic
decision making and choices. It has made the companies to face intense level of competition
from both the global and domestic companies as a result, the organizations have to face major
pressure for internationalizing its operations. It is mainly aimed to reduce the cost of the firm by
relocating its operations in the countries which has low cost of labor, increased market share,
diversified operations and less risk (Zhang and Liu, 2018).
Influence of globalization on decision making
By the globalization, there is an intense level of competition which may be relating to the
offering, target market, production, technological adaptation and many others. It is important for
the businesses who work at the global level to take such decisions which are beneficial for it. For
instance, Nando’s has to make decision while operating at global level which is consistent in
each of the country where it is operating so that there is harmony being maintained among the

state and company. Moreover, there may be instance, when it has to take several decisions which
are suitable for one country. There cannot be one decision prevailing all the countries where the
company operates as every country has different market, demand, customers, trade barriers,
availability of people, material and technology. So there is a major influence of globalization on
the decision making of the business. Before making any decision, it has to take care of all the
global market requirements otherwise; one wrong decision can result in loss of market share as
well as the profitability of the firm (Tung, Tang and King, 2018).
The strategy can be defined as the scope and direction of company for the long term that
achieves the advantage in the changing environment by configuring the competencies and
resources with the purpose of fulfilling the expectations of the stakeholders. While operating at
global level, Nando’s has to make sure that its frame its strategies in such a way that the market
requirements at the global level are fulfilled. As Nando’s operate in 35 countries, so it has to
frame strategies different for all the market as each has different demand, market and customers.
So there is a heavy influence of globalization on the organizational strategy. For instance, if
Nando’s operate in a Muslim country such as Saudi Arabia, it has to keep halal in the menu so
that the demand of the market is fulfilled while if it operates in India, it has to keep some options
of vegetarian so that their demands are met. So there is major influence of globalization in the
strategy of business.

CONCLUSION
It is concluded from this report that a business is influenced by its environment which
consists of internal and external factors. It is important for organization to analyze these factors
so that the efficient decision making is done. There are various types of businesses such as
public, private and voluntary and each has different legal structure. Nando’s is the private
restaurant which operates in 35 countries and has around 1000 outlets. Every organization
consist of the departments which are required to work together so that there is healthy
environment being created in the organization. The PESTLE analysis of Nando’s is discussed
which provided the impact of external factors on the business while SWOT analysis helped in
analyzing the impact of internal factors. Lastly, it is summarized that the globalization has a
major influence on the strategy and decision making of the company.

REFERENCES
Books and Journals
Akhtar, M. and Sushil, S., 2018. Strategic performance management system in uncertain
business environment. Business Process Management Journal.
Contractor, F.J., and et. al., 2020. How do country regulations and business environment impact
foreign direct investment (FDI) inflows?. International Business Review, 29(2), p.101640.
Cravo, T.A. and Piza, C., 2019. The impact of business-support services on firm performance: A
meta-analysis. Small Business Economics, 53(3), pp.753-770.
Hillary, R. ed., 2017. Small and medium-sized enterprises and the environment: business
imperatives. Routledge.
Luiz, J.M., Ganson, B. and Wennmann, A., 2019. Business environment reforms in fragile and
conflict-affected states: From a transactions towards a systems approach. Journal of
International Business Policy, 2(3), pp.217-236.
Smith, D.E., 2017. “Literacy” and business:“social problems” as social
organization. Reconsidering Social Constructionism: Social Problems and Social Issues, p.327.
Stumpf, K., 2019. Leading Business Change: A Practical Guide to Transforming Your
Organization. Productivity Press.
Tung, V.W.S., Tang, M.F.C. and King, B.E.M., 2018. Tourism industry career prospects and the
business environment: E vidence from C anada and M acau. International Journal of Tourism
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Willcocks, L.P., 2018. Global business management foundations. SB Publishing.
Zhang, N. and Liu, B., 2018, July. The key factors affecting RPA-business alignment.
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