Critical Evaluation of the Strategy of Nando's

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CRITICAL EVALUATION OF THE STRATEGIC CHOICES OF NANDO’S

TABLE OF CONTENTS

1INTRODUCTION 3

2MODELS OF STRATEGY 4

1. Porter's Generic Strategies 4

2. Mintzberg's 5 P's of Strategy 5

3OVERVIEW OF STRATEGIC DECISIONS 7

4CONCLUSION 8

INTRODUCTION

“Decisions, whether explicitly or implicitly arrived at, precede every action.” Ansoff 1965

Our choices or decisions precedes everything, from day to day operations to the direction we steer our organisations in. According to Mintzberg and Walters strategy is “a pattern in a stream of decisions”. Strategy can be planned or deliberate but also emerge as we go along and adapt to internal and external influences.

In this study we will evaluate the strategic choices made by Nando's International to create a competitive advantage in their industry. Porter's generic strategies model will be used to evaluate some of the decisions made by Nando's.

Nando’s originated in South Africa in the late eighties and has grown into an international chain of restaurants offering a menu of unique flame-grilled, chicken based on Portuguese recipe.

“The global expansion strategy adopted by Nando's Group Holdings has shown strong growth, confirming the sustainability of the business model and the economic value of the brand', said CEO Robbie Brozin in 2002. This was just before Nando's opened the 19th of the planned 50 new stores worldwide.

Today Nando's is the largest South African restaurant group to expand internationally with more than 1000 restaurants operating in over 30 countries across the world including Canada, Cyprus, United Arab Emirates, Lebanon, New Zealand, Australia, Ireland, the United Kingdom and United States.

MODELS OF STRATEGY

Competitive strategy is about formulating a strategy that enables your organisation to compete with other organisations within your industry or sector, based upon identifying potential realisable sources of competitive advantage for your own organisation. (Viney, et.al. 2007)

A few aspects should be considered when looking at competitive strategy:
potential available resources and capabilities
the external environment
key stakeholder objectives

Porter's Generic Strategies

Porter has established his generic strategies model in the analysis of strategy no matter what industry. This “generic” quality has sustained the model, though seen as classic by some, to be still relevant today.

Porter also suggested that an organisation follow one of three generic strategies to obtain a sustainable competitive advantage. We will evaluate Nando's choices in relation to Porter's strategies.

| |COMPETITIVE | | |ADVANTAGE | | |Lower Cost |Uniqueness | |COMPETITIVE |Broad Target |Cost |Differentiation | |SCOPE | |Leadership | | | |Narrow Target |Focused |Focused | | | |Cost |Differentiation | | | |Leadership | |

Figure 1 - Porter's Generic Strategies

Cost Leadership Strategy

This strategy involves the organisation aiming to offer the lowest cost within an industry. The cost leader usually aims at a broad market because enough sales can cover costs. ■ Nando's approach from the outset has been to be...
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