Case Study: Innovation Management, Nando's Strategic Challenges

This case study examines Nando's, a South African restaurant chain, and its innovation management strategies, particularly focusing on addressing quality issues in its Australian units. The analysis includes identifying the problem of degrading food quality and filthy kitchens, proposing strategic interventions to improve quality, and assessing the financial implications of these changes. It also covers the benefits of adhering to food safety guidelines, strategic options like enhancing the product portfolio and social media marketing, and stakeholder considerations. The study uses quantitative analysis to evaluate the costs and benefits of implementing these strategic changes over a five-year period, emphasizing the importance of quality enhancement for maintaining customer loyalty and competitive advantage. The recommended actions involve developing a decentralized decision-making model to improve operational efficiency and quality control across different units.

INNOVATION MANAGEMENT
Nando’s

Part 1- Problem
• 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 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

Part 1- 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
• The concerned organization must 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

Part 2- Benefit
• 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
• 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

Part 2- Benefit
• 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 organizational change will be reliant on the decisions that are
undertaken by the management authorities in South Africa

Part 3- Strategic 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 major assumptions that might be undertaken by the organization
are reliant on the choice and safety based needs of the consumers
• 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

Part 3 cont.
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

Part 3 cont.
Strategic Interventions 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 modifications in
the processes
Intervention 3 Social media marketing Encouraging the involvement
of the customers through
contests
Enhancing the quality of the
offerings
Intervention 4 Diversifying the offerings Pricing considerations Developing sound monitoring
and control activities

Part 3 cont.
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

Part 4
• The major stakeholders of the concerned
venture are the customers, the project
managers, the investors, the suppliers,
government and the board of directors
• 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 ensure the organization in
developing the strategic propositions to
enhance the rate of sales volume
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$

Part 5
• 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 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