Impact of Market Structures and Economic Factors on Nando's Business

This report provides a comprehensive analysis of the contemporary business environment, focusing on the fast-food restaurant chain Nando's. It begins with an introduction to the competitive nature of the modern business landscape, emphasizing the importance of micro and macro factors. The report then delves into various market structures, including perfect competition and monopolistic competition, and examines the UK's market structure, particularly within the restaurant and food service industry. A significant portion of the report is dedicated to the impact of economic factors, such as demand and supply, income levels, inflation and forex rates, interest rates, taxes, recession, and employment rates, on Nando's. Furthermore, the report analyzes the impact of the COVID-19 pandemic and Brexit on Nando's operations, detailing immediate impacts and the long-term effects on the business. The report concludes with recommendations based on the findings and provides a list of references.

Contemporary business
environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
DISCUSSION AND ANALYSIS...................................................................................................3
Various market structures............................................................................................................3
Impact of economic factors of UK..............................................................................................4
Impact of Covid – 19 on Nando’s................................................................................................7
Impact of Brexit on the business of Nando’s...............................................................................8
CONCLUSION................................................................................................................................9
RECOMMENDATIONS...............................................................................................................10
REFERENCES..............................................................................................................................11
Books and Journals....................................................................................................................11
Online........................................................................................................................................11

INTRODUCTION
Contemporary business environment is very competitive in nature. It is also called as
modern business Contemporary means be in the right place in the same period of time and
present time. Contemporary business can be defined as the circumstances and idea during the
present time in the workplace. In a contemporary business and its business environment, the
micro and macro factors are also taken into account (Ormerod, and Caiado, 2017). Nando’s is a
private company working in the industry of fast food and casual dining. This restaurant chain is
headquartered in South Africa but serves in the locations all over the globe. The product line of
Nando’s restaurant chain is based on the chicken and related cuisine. The impact of Covid – 19
pandemic has hit hard on every business including Nando’s. The impositions of lockdowns and
other restrictions have created a major pause on the working of the business at Nando’s. This
report deals with the market and impacts of different factors on the working of Nando’s
restaurant.
DISCUSSION AND ANALYSIS
Various market structures
Different market structures:
Market structure related to the field of economics deals with the way of different industries and
their classification based on the level of degree as well as the nature of competition about the
products and services. There are four different types of market structures:
Perfect competition: This market structure is when the large number of small scale companies
are ready to compete against one another. Such companies sell same kind of products, lack in
creating a pricing influence on the products and services and are free to enter and exit the market
place. The consumers of the commodities bear the compete knowledge of the products offered
by the companies. They are also aware of the charged prices of the product and the brand. This
market structure is very helpful in companying companies which exhibit same type of features.
Although, this type of market structure can be unrealistic and have to deal with certain criticism
such as having no incentives for the innovation and for having less barriers to enter the market.
Monopolistic competition: It is defined as the imperfectly competitive market which exhibits the
traits of monopoly as well as competitive market (Indounas, 2018). Here, the sellers have to
compete against one another while differentiating their goods and products with respect to

quality and branding which can make them look different. Sellers have to consider the price of
which is being charged by their competitors in order to attract customers. Short term
monopolistic company will maximise the profits and enjoy the benefits of being a monopoly.
Companies in type of market structure have to produce products depending on the demand.
Marginal revenue relates to the marginal costs.
Market structure of UK:
Market structure is based on factors which influence the behaviour and final results of
organisations working in their respective market. These factors determine the structure of any
market which includes the number of buyers as well as the sellers, their ability to negotiate, the
degree of concentration and differentiation of the products and lastly it includes the difficult of
entering and exiting the market (Market structure, 2021). Market structures are used to
understand the factors and features offered by different players. The market can be distinguished
on the basis of wide range of features. When these features are cross examined, it can help in
establishing some similar traits. This helps in categorising and differentiating the companies
relating to their business. The restaurant and food service in UK has experienced a period of
growth before the industry was hit by Covid – 19 pandemic. The revenues were increasing in the
trend over past few years. Even before the pandemic the restaurant industry were struggling to
survive in the country and resulted in many closures. There are increasing costs rates, reducing
number of customer spending and the over saturated market which was booming in the casual
dining companies. These have contributed to insolvencies of wide numbers of small restaurants
and closure of many large restaurant chains. The uncertainty of Brexit and unexpected
outbreakof pandemic has changed the future of restaurant industry in UK. Oligopoly is the
market which is imperfectly competitive and dominated by the suppliers. Such type of market
structure has many characteristics such that it helps some companies to remain the main
suppliers in the industry. The firms opting for oligopolistic firms are more independent. The
entry of the new firms in the industry is very difficult. The consumers in UK are more influenced
in companies following the oligopolistic approach as it helps in keeping lower prices, excellent
quality of the products and services offered by the companies and the shortage of competition.
Impact of economic factors of UK
Demand and supply:

Due to the spread of covid-19 customers are changing the ways of buying products and due to
which organisational sales are being affected because of severe deduction in sales due to which
overall revenue collection it is also get affected. This has been developed because of the spread
of covid-19 which has increased the effect of uncertainty is drastically for the customers and they
are less likely E2 to use products from the Marketplace (Thendu, 2020). However companies like
nandos can implement variations within its supply and demand in such a way that the corporate
can switch its operations from traditional indoor sales to the implementation of home delivery
methods by which efficient organisational skills can be insured. That will enable the corporate to
take appropriate measures through which customers level of engagement in terms of utilising
products and services can be maintained that will result in higher organisational sales and
expenditures which are being made for maintaining supply and demand supply chain can be
managed properly and will improve company's sustainability within the market place as well.
Income level
Nandos primarily achieved source of income through the organisational sales which it is making
by providing Hospitality Services to the customers at an affordable pricing. Hence the corporate
has to take suitable measures through which it can guarantee that it is being able to evaluate the
market conditions and then implement appropriate changes within its pricing strategy so that
sales can be maintained by ensuring high profit margin (Samani and Asadi, 2018). That is why
nandos has to implement different pricing pattern through which customers can be influenced to
develop a direct contact with the corporate for utilising its products and services. No sense
company provide affordable pricing pattern and that is why it it provide product such that mass
market customer base can be attracted and hence the business can utilise hourly pricing pattern in
which specific Limited amount of discount is being provided to the customers for and short time
span through which customers can be influenced to use the organisational of ring and by which
organisational sales is being accomplished through which specific chances of goal achievement
can be enhanced weather corporate.
Inflation Rate
The corporate has to guarantee that it is able to implement appropriate pricing strategy such that
high return of investment is being accomplished. In order to achieve this several key
considerations have to be a maid in which increasing inflation rate plays and important role
because of the fact that institute has to guarantee that it is having efficient budget to maintain it

high level of operations in front of the customers to guarantee its sustainability and because of
which appropriate improvisation methods have to be taken and overall pricing pattern is also has
to be changed by the Corporation in such a way that efficient budget is available for making
suitable changes as per the customer requirement (Supriyadi and Kausar, 2017). This is not as
easy as it is being said to implement changes within the pricing pattern in context to the inflation
rates because changing the priests pricing will reduce customers engagement with the
Corporation and hence overall there satisfaction level in terms of using the organisational
products and services might also get affected.
Forex Rate
Forex rate is the country wise approach which is afternoon being used Tu to evaluate countries
potential for implementing International trading approaches and because of which high Forex
rates showcases efficient availability of of foreign currencies to implement International trading
(Szafranek, 2021). This availability of Forex trade by the country Ee has to be evaluated by
companies like nendo in approaches in which business is taking actions to increase its
Geographic reach to the external market places and that is why has to take several approaches
with which specific targets can be accomplished. Important step to be analysed by the corporate
because it has to choose a target country such that the specific location is having hi Forex return
for making trade approaches and by which appropriate measures can be taken accordingly to
attain and strong economic growth by providing new type of products to the customers at various
Geographic areas by which high return of investment is being attained
Interest Rate
Companies after have to take business loans for making initial investment for performing
business operation and that is why product pricing is Austin Bean set in consideration with the
amount of investment which is being done and the price per customer while also the interest rates
which have to be paid by the business to the banks (Meyer, Parker and Sheng, 2021). It is an
important step because if interest rates are not been taken into consideration then and the profit
margin which company is having after taking financial loans in that case it will be reduced and
hence the company's performance within the Marketplace can also get affected.
Taxes

The company has to pay taxes as per the legal considerations because it is not able to pay the
taxes then in that case it may have to face governmental penalties which will affect its
performance within the marketplace. With this approach the corporate can guarantee that it is
being able to utilize appropriate measures by which specific organizational situations can be
fulfilled. Hence in order to maintain company’s efficient organizational sales taxes are being
established in addition to the pricing which is being showcased to the customers, by this
approach it guarantees that it is being able to achieve high return of investment.
Recession
Recession is the country wise approach in which the government is not having suitable amount
of money and that it is why corporate often take suitable measures that it is having suitable
budget to maintain its sales. The overall significance of the pattern is also being increased
because of the fact that with high fund business can have strong economic growth.
Employment Rates
Businesses have to make several recruitments by which it can guarantee that it is able to achieve
high work productivity and with which high quality of services can be provided to the customer.
That is why high recruitments often have to be made by which high sales are being accomplished
and with which efforts can be made to increase customer loyalty.
Impact of Covid – 19 on Nando’s
Immediate impacts:
Restaurants in UK were allowed to open after almost three months of lockdown due to Covid- 19
pandemic. Along with this they were required to follow certain rules and strict hygiene condition
so as to prevent the spread of virus leading to second wave of the outbreak. The country
reintroduced lockdown rules and regulations which affected many restaurant chains following an
increase in number of Covid cases. Like any other business, Nando’s also suffered due the Covid
– 19 pandemic. The business of the company was majorly affected during the first round where
the company were not allowed to trade for about a month. The business has been able to grown
since then from past few months with the help of strategy revolving round the online delivery
and adjusting to the new market and different methods of doing business in socially distanced
new world. The structure of the company in the country UK is offering to typically service the

customers by the means of some few channels. These services include takeaway options, sit
down meals, drive through and the source for online deliveries. Nando’s has invested in online
food delivery options as well as marketing which help the company to operate using a different
model when compared to its competitors.
Future impacts of Covid – 19
This pandemic has changed the way of living for the people of entire world. The shocks of the
pandemic lives rent free in the minds of many people. It has changed the working condition
which will stay for a long term in the world. Covid has affected more to the restaurant industry
and the business of companies like Nando’s. Short term effects are the unemployment and
shutting down restaurants during lockdown there are some long term effects as well. These long
term effects of Covid – 19 has impacted the business of Nando’s at large extent. One of the
biggest long term effect is that the pandemic has shifted from on premise to off premise dining
settings. In future, customers will be less interested in dining out anymore (Jain, 2020). Along
with this people will rely more on the online services like delivery and take out more than ever
before. Along with this another long term effects is the changing of menu. Nando’s has learnt
and adapt the ripple effects which come with the pandemic and its post effects. Menus will see a
wide range of changes just as the thought behind having shareable was a popular thing pre Covid
– 19 but after the pandemic, people will be reluctant to share their food with others. The take out
options for meal boxes is more famous as they are much more affordable options for the people
who will avoid exposing their family at a public place. Restaurants like Nando’s relied on using
the space for maximum seating in order to achieve profits will now be a clear no from the
customer’s side. This will result in having huge disadvantage regarding the health and safety
regulations. Customers, post pandemic will not be comfortable in sitting close to other people
especially in an indoor seating arrangement. Covid – 19 has made social distancing an important
thing which will be continued for a very long time. This also means that there will be end of
communal table for the customer who are interested in having a quick bite and eat alone.
Impact of Brexit on the business of Nando’s
The decision of UK withdrawing from the European Union has affected the business all over
UK, some in positive way while mostly in negative way. These effects were very serious on the

companies leading restaurant chains in UK, There were strong suggestions leading to referendum
that Nando’s might close all their restaurants working in UK as the result of Brexit. Brexit has
affected the employment as most of the employees working in the restaurants were travelling
from EU countries. It created a skill shortage in UK leading to uncertainty. Nando’s retained the
key EU staff but it consumed a lot of time in the beginning months. The contracts from suppliers
for the restaurant and other business in EU and the relations which were carefully nurtured over
past so many years were at high risk due to the effects of Brexit (Kim, and Lee, 2020). There was
no single market to lean on which made it hard for the company to secure any deal related to the
business. Although, the opportunity to renegotiate the contracts with regards to the terms and
conditions of the restaurant has helped in putting the company in greater position relating to the
power. This lead to more favourable contracts with the suppliers. Nando’s were dependent on the
foreign workers excluding the EU countries. The new policy for the immigration was very much
restricted strictly which again resulted in lack of staff in the functioning positions of the
company. This stage of Brexit must not be overlooked by the Nando’s. All the things will come
back to place by giving some time to the company to cope up with the uncertainty and other
effects of Brexit. This restaurant chain has the power to stand on their feet and fight against the
economic tides.
CONCLUSION
From the analysis it is being concluded that businesses have to take several approaches through
which it can guarantee that it is being able to achieve and efficient large number of customer
base police staff through which uniform sales can be accomplished which will result in in
symmetric economic growth and hence the overall brand for men's within the Marketplace can
be improved. The overall significance of this factor increase is but there are several key
considerations which have to be taken during the process of decision making and this include
elements like and understanding about the demand and supply chain which the corporate is
having change the Marketplace. This is an important step to be taken into consideration because
the business has to guarantee that appropriate measures are being taken that its performance
within the Marketplace can be improved while also minimising the expenditures which are being
made in order to provide organisational services to the customers this is not as easy as it is being
said because with that appropriate measures can be taken in such a way that I work productivity

can be accomplished however this is not as easy as it is being said because businesses have to to
guarantee that that it is appropriate pricing is wing set in such a way that high profit margin can
be accomplished to ensure companies sustainability within the Marketplace and hence the
chances of goal achievement can be increased. With that there are several key associated factors
which have to be analysed by the business this include the the changing inflation rates
employment rates and several other factors which increase is company's expenditures for being
within the market and reduces the overall associated profit margin that is why total appropriate
strategy has TV changed in such a way that competitive edge can be maintained and customers
loyalty towards the corporate can be guaranteed with the the implementation of affordable
pricing approach.
RECOMMENDATIONS
People are shifting more towards the online ordering and thus Nando’s should invest in the
technology and must not give it back after the pandemic is over. They must build an online
ordering system which benefits both the customers and the company. Nando’s must try making
their menus more smaller which will help the customers to streamline the order and makes easy
for the customers to decide what they feel like having (Bolet, Osuna, and Lyon, 2018). Small
menus can help the restaurant to us to same ingredients for the making of many dishes. This will
also help in avoiding any wastage of food while minimising the process of inventory. People will
avoid seating close near strangers and other people and hence, Nando’s must maintain the
minimum safety distance between the tables of the dining. Along with this Nando’s must start
creating a space for live cooking counter as customers will feel more safe about seeing their food
cooked right in front of their eyes.

REFERENCES
Books and Journals
Bolet, D., Osuna, J. and Lyon, J., 2018. Understanding Brexit: Impacts at a local level.
Indounas, K., 2018. Market structure and pricing objectives in the services sector. Journal of
Services Marketing.
Jain, D., 2020. Effect of COVID-19 on restaurant industry–how to cope with changing
demand. Effect of COVID-19 on Restaurant Industry–How to Cope With Changing
Demand (April 16. 2020).
Kim, J. and Lee, J.C., 2020. Effects of COVID-19 on preferences for private dining facilities in
restaurants. Journal of Hospitality and Tourism Management. 45. pp.67-70.
Meyer, B., Parker, N. and Sheng, X., 2021. Unit Cost Expectations and Uncertainty: Firms'
Perspectives on Inflation.
Ormerod, P. and Caiado, C., 2017. Market structure with interacting consumers. Review of
behavioral economics.. 4(1). pp.33-49.
Samani, M.N. and Asadi, E., 2018. The impact of monetary disorders on inflation and business
cycles in Iran’s economy. Amazonia Investiga. 7(17). pp.41-59.
Supriyadi, E. and Kausar, D.R.K., 2017. The Impact of Inflation, Exchange Rate toward
Unemployment and Poverty in Indonesia. Case Study of Small and Medium Enterprises
at the Tourists' Area of Lombok. Journal of Environmental Management & Tourism. 8(4
(20)). pp.825-834.
Szafranek, K., 2021. Disentangling the sources of inflation synchronization. Evidence from a
large panel dataset. International Review of Economics & Finance.
Thendu, B., 2020. Policy Formulation and Advocacy towards Sustainability of Aviation Industry
in Kenya: A Literature Based Review. Journal of Strategic Management, 4(1), pp.1-15.
Online
Market structure, 2021. [Online]. Accessed through :<
https://corporatefinanceinstitute.com/resources/knowledge/economics/market-structure/>