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HR: Building a People Strategy Essay

| October 20, 2011 | 0 Comments

Building a People Strategy – Nando’s

Organisation

Founded in 1987 in Johannesburg, Nando’s is a casual dinning restaurant known for its unique Portuguese and Mozambique style cuisine.  The restaurant gets its name from its founder Fernando, who is the son of a Portuguese national living in South Africa.  Nando’s specialises in chicken dishes including its famous peri-peri chicken.  Currently Nando’s operates in 26 countries including: USA, UK, Australia, UAE, and Singapore, just to name a few.  The company’s entrance into the UK market began in 1992 with its first franchise opening in Ealing.  UK franchises are owned and operated by the Capricorn Ventures International group.  As of August 2009 there was a total of 214 Nando’s restaurant located throughout the UK.  The company also operates online web stores in Australia, the UK and the USA.  Many of the restaurants products and apparel can be found online or in major supermarkets (www.nandos.co.uk).

Business Strategies and Goals

Nando’s main strategy is to be a unique casual dinning restaurant that offers an individual experience in each of its locations.  The company prides itself on being connected to the communities it operates in and strives to partner with them in reflecting their characteristics.  Each franchise is distinctive and decorated in the style of the surrounding community; a restaurant located in London will look very different to a restaurant located in Dubai.  This uniqueness sets Nando’s apart from its competitors in that Nando’s restaurants become part of their communities.

The goal of retaining and increasing Nando’s customer base is best met through providing excellent customer service.  The company takes great care in making sure its employees are well trained in the art of customer service.  Whilst often called a casual dinning restaurant chain, Nando’s desires to make every customer’s experience something unique and lasting.  They want their customers to return and tell others of their wonderful experience.  For Nando’s, this is in part achieved through offering excellent customer service.

Nando’s operates under a family ethos.  Each member of staff is referred to as a Nandoca and is considered part of the Nando’s family.  Employees are trained to treat customers in this same family ethos manner.  When a customer dines at a Nando’s restaurant the goal is to make them feel as if they are enjoying a family gathering.

Not only does Nando’s train its employees on excellent customer service, the company also prides itself on offering exceptional training in general.  This focus on training has afforded the organisation several training awards including: National Training Awards and Best Companies Accreditation awards.  Nando’s seeks to not only train its employees, but also to develop them with the goal of creating a sustainable business.  Many employees stay with the company for years and move through the ranks of the organisation.

As Nando’s is a privately held organisation it seeks to be successful and generate a profit.  The company’s growth strategies include expanding in current and new markets.  In the UK alone, the organisation has goals of adding 30 new restaurants this year alone (www.ft.com).  Nando’s is also coming on strong in the US and desires to expand heavily there.

Investing in people is another main strategy employed at Nando’s.  The company not only invests millions in training and developing its own people, it also invests in the local community.  Individual restaurants often display the art and profiles of local artists.  Nando’s houses one of the largest collections of South African art displays in the UK (www.nandos.co.uk).  The company has also joined the United Against Malaria campaign ahead of the 2010 World Cup in South Africa.  Along with other organisation’s, Nando’s has entered into the campaign to help raise malaria awareness.

 

Pressures and Problems

The pressure of competition has increased due to the economic downturn.  The casual dinning restaurant industry has seen record losses in the last two years.  This has put pressure on those restaurant companies wishing to remain competitive whilst at the same time grow.  The need for a shift in strategies has emerged in reaction to the volatile economic situation.  Nando’s has not been immune to this downturn and has had to tighten operating margins in order to remain competitive.  This has lead to slower growth rates than the company initially anticipated.

Certain pressures surrounding how and where Nando’s sources its poultry from has recently become a pressure for the organisation.  Fair Trade, organic, and free-range concerns have resulted in some problems for Nando’s in regards to its product standards.  This has caused the company to begin working with local authorities in some countries when purchasing, transporting, and storing its poultry.  This added pressure has caused Nando’s to rethink some of its values and strategies.

The company’s marketing tactics have also resulted in external pressures for the company.  Whilst often said to be edgy and attention grabbing, Nando’s adverts have often been found offensive by groups of individuals in certain countries.  Due to this reaction, several of the organisation’s adverts have been redone to be more suitable for certain markets.

Vision and Values (Policies that affect people, internal factors)

As stated above, Nando’s is similar to any privately held organisation in that its goals include generating a profit, however, the company is unique in that it desires and encourages its employees to have fun whilst making a profit.  This value stems from the strong family ethos held at Nando’s.  Whilst making a profit is important to the organisation, it believes that this is better achieved when employees are having fun and enjoying themselves at work.  Happy employees lead to happy customers, and happy customers lead to a successful company.

In reaction to the negative pressure Nando’s has received in regards to its purchase of poultry, the company has adopted the value in the UK of only using birds reared under RSPCA Freedom Food standards.  This value has become core to the company and has resulted in policy changes that affect how employees purchase, transport, and store poultry.

As stated earlier, Nando’s has a vision of being a restaurant that offers a unique dinning experience.  The company’s management and employees through offering excellent customer service, a focus on training and development, instilling a family ethos, and supporting the community achieve this.

Trends in Legislation, Economy, Society, Labour Market, HR (external factors)

The trend of increasing labour costs will always be an issue for any organisation wishing to generate a profit.  The government controls the minimum wage for most industrialised nations; therefore organisations operating in those nations have no choice but to comply with the local laws.  The minimum wage, for instance, in the UK is £5.80 and is expected to increase to £5.93 from October 2010 (www.direct.gov.uk).  This increase could potentially have a negative affect on Nando’s and may result in the company needing to introduce redundancies.  Being aware of current wages and wage trends is very important to Nando’s, as this trend affects the organisation’s operating profits as well as its ability to remain competitive.  How the company reacts to this trend will affect the organisation for years to come.

The recession has brought about many changes to the way organisations conduct business.  Whether in good economic times or bad, any company needs to be aware of how the economic trends will affect overall strategy.  Over the past two years Nando’s has seen both positive and negative affects of the recession.  On the one hand, the fall in interest rates has helped the company to expand and grow its franchise restaurants.  However, on the other hand, the fall in the strength of the pound has led to an increase in prices for products and ingredients that are imported to the UK.  Economic trends will always affect Nando’s, how the organisation reacts to the trends will determine whether or not the company can continue to be profitable.

Implications for HR Policies and Initiatives

Current trends in HR have resulted in businesses needing to be more effective and efficient.  The result has been strategies focusing on doing more with less, redundancies, and squeezing of operating margins.  The issue of employee morale has been a hot trend in recent years.  Given the unstable economic conditions, most organisations are dealing with decreased morale and have a need to develop new ways for handling such issues.  As a result, best practices in non-material motivation, staff development techniques, and guides for saving your team in a crisis have been released.  These developments in some form or another have an affect on an organisation’s people policies and procedures.  Nando’s has not been immune to this and has had to adjust its organisational culture to deal with this issue.

Increases in labour costs not only affect Nando’s general HR policies, but also the company’s rewards and benefits schemes.  Adjustment and revisions need to be made continually in order for Nando’s policies to remain up-to-date.  This issue also affects employee relations and communications.  Nando’s HR and communications departments have the responsibility of timely dissemination concerning any changes to HR policies or procedures.

Nando’s vision of having fun whilst making a profit affects not only the organisation’s culture, but also resourcing, and learning and development programs.  This vision is somewhat unique and therefore Nando’s needs employees who buy into and support the vision.  HR policies and procedures surrounding the learning and development programs at Nando’s need to be inclusive of this vision and offer support in ensuring it is communicated throughout the organisation.

Creating a unique experience for the customer is important at Nando’s.  This value has an affect on the learning and development programs employed at the organisation.  Whilst the customer experience is expected to be unique, this requires a unique approach to learning and development.  At Nando’s individualism is important and this can be seen in the company’s HR policies.

Prioritisation of Demands

When dealing with multiple demands it is important for any organisation to remain true to its core values and vision.  Any demand that is not in line with these items will need to be re-evaluated for relevancy.  Nando’s has inherent to its business certain goals, visions, and values including: having fun whilst making a profit, offering a unique dinning experience, and socially responsible product sourcing, among others.  Any demand that is not in line with these values could stand to hurt the organisation.  It is suggested that the management of Nando’s evaluate each demand placed upon the organisation and first determine which ones are in line with the company values and vision.  After this has been done, the management can then focus on which demands seem most pressing or important to the company operations or profits.

 

 

 

 

 

 

 

 

 

REFERENCES:

(2010) Directgov [online] Available at: http://www.direct.gov.uk/en/Nl1/Newsroom/DG_178175 [Accessed 18 April 2010]

(2010) Financial Times [online] Available at: www.search.ft.com [Accessed 19 April 2010]

(2010) Nando’s [online] Available at: www.nandos.co.uk [Accessed 19 April 2010)

(2010) Times [online] Available at: www.business.timesonline.co.uk [Accessed 19 April 2010)

DeWit, B., and Meyer, R. (2004) Strategy: Process, Content, Context.  3rd edition.  London: Thomson International Business Press.

Grant, R. (2005) Contemporary Strategy Analysis: concepts, techniques, applications.  5th edition.  Boston: Blackwell.

Hit, M.A., Ireland, R.D., and Hoskisson, R.E. (2003) Strategic Management: Competitiveness and Globalization.  5th edition.  Mason, Ohio: Thomson Learning.

Johnson, G., Scholes, K., and Whittington, R. (2007) Exploring Corporate Strategy.  8th edition.  Prentice Hall.

Lynch, R. (2006) Corporate Strategy.  London: Pitman Publishing.

Mintzberg, H., Ahlstrand, B., and Lampel, J. (1998) Strategy Safari.  Prentice Hall.

Porter, M.E. (1998) Competitive Strategy: Techniques for Analyzing Industries and Competitors.  New York: The Free Press.

Whittington, R. (2001) What is strategy – and does it matter?  2nd edition.  Padstow: Thomson Learning.

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Category: Business Essay Examples, Essay & Dissertation Samples

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