External Environmental Analysis Paper

1173 Words 5 Pages
1. Analyzing and Evaluating the Implications of the General Ecosystem and Competitive Environment

No business operates in isolation and they are all part of an ecosystem coupled with a network of organizations which includes distributors, suppliers, customers, competitors, stakeholders, etc. (Pitt & Koufopoulos, 2012)

General External Ecosystem Analysis

Interacting in this external world creates challenges for a business and a need for flexibility and adaptability to maintain survival and remain competitive. Furthermore, advances in technology and increasing globalization have changed ideas about the best ways to do business, and by understanding and analyzing a business’s ecosystem and stakeholders will help companies thrive in this rapidly
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The forces include:
Competitive rivalry
Nando’s has strong competition in the food industry which are establishments such as KFC, Mochacho’s, Chicken Licken and TGIF to name a few. Each franchise is searching for new opportunities and innovation strategies to maintain and sustain their competitive advantage
Threat of new entrants
New entrants in the food industry is a constant with new outlets trying to achieve a share of the market. Having and establish and reputable brand provides that competitive advantage over these new entrants but this cannot be taken for granted. Strategies to close the gap on new entrants making it unattractive and costly will help curb this situation.
Threat of substitutes
There are competitors that try to offer similar products as a substitute to what Nando’s has to offer but the quality and value differs. This will attract some customers but what is important to remember that cheaper costs doesn’t always guarantee quality and value. Nando’s unique spices and sauces coupled with quality healthy eating food provides differentiation amongst
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Strategic intent and a “successful firm’s strategy must be favorably aligned with its external environment” as mentioned by (Nandakumar et al. 2010). Nando’s strategic intent illustrates such alignment but continuous analysis of these environments needs to occur in order to maintain its strategy and remain competitive. With Nando’s recent introduction into the Saudi Arabian market and the impressive success of these brick and mortar outlets, proves that the strategy is effective. Increased adaptability and innovation will add to its advantage in these sectors. Another key factor will be its contribution to the CSR program in the environments it operates and relationship building with the communities and target customers in these locations. What is important to consider during these global expansion initiatives is the global economic uncertainty and instability due to the rise in terrorism and other external market effects which are uncontrollable to the company. Strong contingency plans should be readily available to overcome and adapt to such

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