Nando's Essay

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Nando’s International: Taking Chicken to the World Nando’s International: Taking Chicken to the World 1. What are the primary reasons for Nando’s domestic success? What core competencies did it develop in the domestic market? Core competencies are distinctive skills which yield competitive advantage. (Thompson, Martin, 2005:116). Prahalad & Hamel (1990) acknowledge that there are three strands to core competency: technologies, processes (or capabilities) and strategic architecture. The listing of Nando’s on the JSE allowed them to insulate the South African operations from capital costs and losses that could follow from international expansion. This was critical to local success as none of the international expansions were initially profitable. Nando’s achieved critical mass in the South African market. Critical mass was defined by Denoon- Stevens as the number of stores needed in a certain country to support a regional head office and in addition show a profit. By 1995 there were 45 outlets in South Africa. Nando’s operated each new outlet as a separate company and the business functioned on a joint venture basis. This proved to be inefficient but then they restructured. Nando’s brand was positioned above their mass-market counterparts in the minds of consumers and they developed a niche market where they could ask their market premium prices and they developed aspirational messages. Strong culture and skills development aided success in South Africa. Nando’s culture reflected an easy management style, particular partner selection criteria, and an informal approach to staff in general. Their cultural value was “to be the best…not the biggest…the best quick food chain in the world.” The Nando’s mission statement embodied their

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