Foreign Market Analysis|
Nando’s going into China|
Muhammad Usman Dastgir (23104392)|
This report is designed to provide an environmental analysis for the penetration of Nando’s into the Chinese market. Nando’s is a South African based multinational which specializes in fire grilled chicken, promoting a healthy lifestyle through their signature offering of a grilled piece of chicken with side dishes. With a population of more than 1.3 billion, China is the most populous country on earth and the growing economy provides a higher disposable income for consumers. Moreover a growing trend of western cuisines has strengthened this industry and laid a perfect platform for Nando’s to enter the market. The Chinese consumers belong to a well knit community and believe in benefit for all. Thus Nando’s needs to engage the locals in the business as much as possible to create friendly ties which will help the company establish itself. Furthermore with the acceptance of Western culture, multinationals aspiring to enter the Chinese market find it much easier to penetrate the market. Over the years, China has transformed into a growing country and a superpower, and comparatively boasts of a stable political and legal system. Although it may not be ranked highest on the ‘ease of doing business’ scale, China has nevertheless transformed itself into an investment hotspot. It could be concluded that China has rapidly transformed itself from a backward soviet state into a frontline superpower, and the investment climate in China is very welcoming. Thus Nando’s has a lot of potential in order to launch operations in the People’s Republic of China. 1.0 Introduction
The purpose of this report is to conduct a comprehensive environmental analysis of the Republic of China which will guide in developing a feasibility report of how Nando’s could penetrate into the Chinese market.
Nando’s originated from South Africa through a Portuguese/Mozambican theme (Nandos, 2012). It was founded in 1987 by Fernando Duarte & Robert Brozin. Nando’s brings to the table its signature chicken dishes offered in a variety of flavours ranging from lemon & herb for those consumers which do not prefer very spicy chicken, to extra hot, for its spice lovers. Nando’s is a large multinational operating in 27 different countries (Nandos, 2012), however despite penetrating a diverse set of markets with vastly different cultures, Nando’s has kept its product market the same all over the world. It specializes in flame-grilled Peri-Peri chicken, which is served with a variety of side dishes. Nando’s was founded on the basis of friendship when its two pioneers who were very close friends decided to purchase a restaurant called Chickenland in Rosettenville, after which it was renamed Nando’s. Ever since, Nando’s has expanded their business globally and has targeted grilled chicken lovers all over the world through their Peri-Peri chicken which boasts the rich flavors of Peri-Peri spices with a healthy meal through its low-fat fire grilled chicken.
1.2 People’s Republic of China
People’s Republic of China, informally known as China is the most populous nation in the world with an estimated population of over 1.3 Billion (World Bank, 2012). Since Mao’s death, when the country transformed into a mixed economy from a former planned economy, China has witnessed substantial economic growth and is now the second largest economy in the world. With an increasing population and a prosperous economy, the standard of living is improving quickly and with an increase in disposable income, people are now frequently eating out, thus leaving huge potential for any business in the food sector (Euromonitor, 2006). With the majority of the population not having the habit of cooking at home, China is a huge target market for Nando’s where its diversity and potential customers is large in...