INDIVIDUAL COUNTRY REPORT

BUSI-1650 GLOBAL INTEGRATIVE PROJECT I

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 TABLE OF CONTENTS

1.FIRM INTRODUCTION 4

2. BACKGROUND 5
2.1 PESTLE ANALYSIS 5
2.2 CRITICAL OPERATIONAL FACTORS 11
2.2.1 POSITIVE INFLUENTIAL FACTORS 11
2.2.2 NEGATIVE INFLUENTIAL FACTORS12

3. CHALLENGES 13
3.1 LEADERSHIP AND MOTIVATIONAL SYSTEMS 13
3.2 COMMUNICATION ISSUES ANALYSIS 14
3.3 STRATEGIES TO ENHANCE NEGOTIATIONS IN TARGETED COUNTRY 15
3.3 LOCAL AREA’S CULTURAL PROFILE 16

4. RECOMMENDATIONS 17

5. ALTERNATIVE SCENARIOS 19
5.1 FRANCHISING 19
5.2 MULTIDOMESTIC STRATEGY 20

BIBLIOGRAPHY 22

APPENDIX 30

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1. FIRM INTRODUCTION

The assessment underpinning this report’s purpose is to define and assess a company’s entry into
a new market, as well as the fundamental analysis of the country’s market into which it is
attempting to penetrate. In this instance, we’ll examine the viability of NANDO’S
CHICKENLAND LTD entering the Brazilian market, as well as the entry mode and international
strategy that it intends to employ.

The company NANDO’S CHICKENLAND LTD belongs to the corporate group AK GROUP
LTD. The firm is a fast-casual restaurant specialising in halal and flame-grilled Peri-Peri
Chicken meals, with ingredients sourced from the UK and Holland. In 1991, two individuals,
Robert Brozin and Fernando Duarte, formed a partnership to establish it. As for the company’s
registered headquarters, it is located in London, United Kingdom. The firm currently manages
and owns over 300 branches and franchisees in the United Kingdom, employing more than
15,000 workers. The firm operates in the Travel, Personal & Leisure industry, with revenue of
1,064,000,240 USD in 2021. As a multinational corporation, the company operates in a wide
range of countries (Figure 1), including the United States of America, Ireland, Zambia, Australia,
India, and others (ORBIS, 2022).

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Figure 1: The geographical footprint of NANDO’S CHICKENLAND LTD (Nando's, 2023).

2. BACKGROUND

2.1 PESTLE ANALYSIS

When integrating a foreign corporate entity into the host market, macroeconomic factors and
cultural differences must be carefully taken into account. The intensity of macroeconomic factors
influencing a firm and its operations increases as it becomes more multinational or globally
integrated. In such intricate firm networks, macroeconomic influences and cross-cultural
variances assume a significant role (Birnleitner, 2013). Determining whether we should enter a
market depends on the overall attractiveness of that market. According to Hill (2023), weighing
the probable long-term advantages of conducting business there against the potential costs and
hazards determines how desirable a country is overall as a market or as a location for
investments. Macroenvironmental factors, however, have an impact on this since they can have
both direct and indirect effects on the firm.

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To evaluate and identify macroeconomic factors that are currently or might in the future have an
impact on the company, we use PESTLE analysis (Investopedia, 2021). According to Sammut-
Bonnici and Galea (2014), The PEST analysis is a framework aimed at aiding managers to
become more attentive to their external environment. Given the clear interdependencies between
the various framework components, individuals should not undertake the analysis in any
particular order. In this instance, we’ll solely focus on the political, economic, social, and legal
factors. The PESTLE analysis of our target country, Brazil, is shown in the tables below.

Table 1 – Brazil’s political environment

Brazil is a federal presidential constitutional republic, based on representative

democracy. The federal government has three independent branches: executive,
legislative, and judicial.

- According to the Index of Economic Freedom, the country has a grade of 51.9
out of 100, indicating that there will be little to regular government
POLITICAL
intervention.1
FACTOR
- Brazil has an acceptable risk (B) in terms of the Country Risk Rating, as seen
in the figure below. Thus, inferring that there is some corporate default
probability.

- Brazil scored a grade of 38 out of 100 regarding the Corruption Perceptions

Index. Hence, asserting that power is being abused for personal gain and
corruption.2

Source: Globaledge (2023).

1
See Appendix A1 to visualize the graph of Index of Economic Freedom.
2
See Appendix A1 to visualize the graph of Corruption Perceptions Index.

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Table 2 – Brazil’s economic environment

Positioned eighth out of 197 countries globally, Brazil has the greatest
consumer market and GDP in South America. Considering exporters aiming to
access Brazil's diverse economy, the country remains a great market. Brazil is
regarded to have a developed economy with an upper-middle income level due
to having the second largest economy in the Western Hemisphere and the
second largest population (213 million). The southernmost region of Brazil,
which comprises the states of Sao Paulo, Rio de Janeiro, and Minas Gerais,
constitutes the area where most of the country's people and economic activity
are concentrated. Due to their competitive advantages in industry, agriculture,
ECONOMIC
mining, and energy sectors, these states have generally been the primary
FACTOR
catalysts for economic expansion (International Trade Administration U.S.
Department of Commerce, 2023).3

Nonetheless, the economy will be expected to slow down significantly due to

base effects and the lingering impacts of solid monetary policy tightening,
which Brazil should feel more keenly. Moreover, it suffers from high
manufacturing costs that hinder its ability to compete, a delicate fiscal situation,
a labour shortage, a poor education system, and low levels of investment
(approximately 20% GDP) (Globaledge, 2023).

Source: Own work.

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See Appendix A2 to observe an economic snapshot of Brazil in 2021.

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Table 3 – Brazil’s social environment

Brazil's official language is Portuguese, which is spoken across the country.

Some native groups still speak their own native or tribal languages. There are
214,326,223 inhabitants in the nation, with a population growth rate of roughly
0.7% yearly, and 43.11% of the population is of working age (The World Bank,
2023). Portuguese, Japanese, Italian, German, and Amerindian citizens coexist
throughout the nation. Around 55% of people are white, 38% are mulatto, 6%
are black, and 1% are other. Roman Catholicism makes up 80% of the
population, Protestantism constitutes 15%, and the remaining 5% are followers
of Buddhism, Judaism, Shinto, Islam, Candomblé, and several different forms
of Christianity (Culture Crossing, 2017).

- Brazil’s population has a life expectancy of around 74 years (2020) (The World Bank,
2023).4
SOCIAL
FACTOR - They have a Poverty Headcount ratio at $2.15 a day (2020) (% of population) (The
World Bank, 2023).5

- A Human Capital Index of 0.6 (2020) (The World Bank, 2023).

Brazil’s Hofstede Framework6:

- Power distance: Brazil had a score of 69, indicating that its society values hierarchy
and views human inequities as acceptable (Hofstede Insights, 2022).

- Individualism: Brazil received a score of 38, indicating that people there are
incorporated into powerful, cohesive groups from birth and that these groups continue
to protect their members in exchange for allegiance (Hofstede Insights, 2022).

- Masculinity: Brazil receives a score of 49, which is quite ambiguous on this level and
falls somewhere between the Masculine and Feminine dimensions (Hofstede Insights,
2022).
4
See Appendix A3 to examine the graph of Brazil’s population life expectancy.
5
See Appendix A3 to observe Brazil’s Poverty Headcount ratio graph.
6
See Appendix A3 to analyse Brazil’s Hofstede Framework.

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 - Uncertainty Avoidance: Brazil ranks highly with a score of 76, as do the bulk of Latin
American nations. To make the world a safer place to live in, bureaucracy, regulations,
and rules are crucial in Brazil, as they are in all high uncertainty avoidance countries
(Hofstede Insights, 2022).

- Long Term Orientation: Brazil receives a 44 on this dimension, placing it near the
middle. Proving that Brazil keeps some ties to its past while addressing issues of the
present and the future (Hofstede Insights, 2022).

- Indulgence: Brazil is classified as an Indulgent society due to its high score of 59.
Individuals in communities with high Indulgence scores typically show a readiness to
act on their instincts and wishes in terms of having fun and enjoying life (Hofstede
Insights, 2022).

Source: Own work.

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Table 4 – Brazil’s legal environment

Brazil is a federal republic with a civil law-based judicial system. As a result,

legislation rather than case law are the main source of authority in Brazil. Yet,
by clarifying that some decisions made by appeal courts are obligatory, the new
Civil Procedure Code, which went into effect in March 2016, reinforced the
significance of judicial precedent. The federal government, states, federal
districts, and municipalities comprise the Brazilian Federation. Each of these
institutions has the authority to enact laws pertaining to the issues listed in the
Federal Republic of Brazil's Constitution. Corporate law and foreign
investment-related problems often fall under the legislative purview of the
federal government (Novais, et al., 2022).
LEGAL
FACTOR - Business contracts: The legal system of Brazil is intricate. Brazilian law is
difficult for a foreigner to comprehend. It is advised that we make use of
international law or resort to an arbitration process and seek assistance from a
Brazilian attorney. An international supplier from Brazil is likely to accept the
fundamental legal principles (Santander Trade, 2023).

- Intellectual Property: The Instituto Nacional de la Propiedad Industrial

(INPI) is the body in charge of protecting patents and trademarks in Brazil
(Santander Trade, 2023). 7

- Legal Framework of Business: Foreign nationals are guaranteed a fair trial

by the judiciary (Santander Trade, 2023).8

Source: Own work.

Following analysis of the aforementioned tailored PESTLE, it is clear that Brazil is a central
trading hub in South America due to its strategic importance in international trade and commerce
and the nine nations with which it shares land borders (Miller, 2022). The developing economy
has aided the nation's ability to establish a significant place in the global economy. Certain
7
See Appendix A4 to analyse the National Regulation and International Agreements.
8
See Appendix A4 to examine the Legal Codes and the Jurisdictions.

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circumstances, nevertheless, prevent the nation from steadily growing. Due to its poor economic
growth and challenges with both economic and political considerations, the nation has a
challenging business environment. Nevertheless, implementing relevant rules and regulations
can minimise the detrimental effects of these factors (Kasi, 2023).

2.2 CRITICAL OPERATIONAL FACTORS

In order to give us a notion of what to anticipate when we establish a business in Brazil’s market,
we will list some of the elements that affect the business's overall risk exposure in this section.
Based on how it affects the firm, this has been divided into two sections: positive and negative
factors. Afterwards, we will examine how firms can reduce the global risk factors listed below.

2.2.1 POSITIVE INFLUENTIAL FACTORS

Firstly, the Index of Economic Freedom gave Brazil a score above average (51.9), indicating that
there will be little to no government involvement and a favourable business climate (A1)
(Globaledge, 2023). Moreover, the current president is essential as he faces Brazil's significant
challenges, such as poverty, inequality, and internationalisation (Martuscelli, 2023).

Secondly, with an upper-middle-class income level and one of the fastest-growing economies,
Brazil is regarded as a developing nation (Globaledge, 2023). Its economy is the biggest in the
Western Hemisphere as well. Brazil is ranked 15th out of 138 nations in the Trade Balance
ranking based on its export and import rankings in terms of total trade (Globaledge, 2023).

Thirdly, being one of the largest populations in the Western Hemisphere, Brazil hosts a sizable,
well-targeted community of consumers (International Trade Administration U.S. Department of
Commerce, 2023). According to the Hofstede Framework, the home nation 9 and the prospective
host country share traits, including long-term orientation and indulgence (Hofstede Insights,
2022). As a result, the firm operates in a more familiar environment, which promotes greater

9
See Appendix B to analyse United Kingdom’s Hofstede Framework.

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communication, fewer conflicts, and more effective and efficient company management
(Hofstede & Bond, 1988).

Lastly, according to the Economic Complexity Index, Brazil has a low level of economic
complexity (0.14) (Globaledge, 2023). Also, the firm can benefit from Brazil's incentives
(Novais, et al., 2022).10

2.2.2 NEGATIVE INFLUENTIAL FACTORS

First off is the “Custo Brasil”, also known as Brazil Cost. The political system in Brazil is
polarising, creating a delicate fiscal situation and polarisation of the administration (Martuscelli,
2023). On the other side, according to the Corruption Perception Index, it also has a score that is
above average for corruption (38) (Globaledge, 2023).

Second, the current trends in Brazil are not favourable; their economy will rapidly slow down as
a result of base effects, the lingering impacts of harsh monetary policy tightening, and the
gradual relaxation of interest rates. They also have a high cost of production and a labour
scarcity that affects their ability to hire suitable workers (Globaledge, 2023).

Thirdly, cultural differences and distinctions based on the Hofstede Framework exist, including
those related to power distance, individualism, and uncertainty avoidance (Hofstede Insights,
2022). According to Kumar and Singh (2011), it is unfavourable for firms' home countries to
differ from their host countries in terms of the Hofstede Frameworks as this can result in
communication and relationship issues between the firm and the host nation, including
misunderstandings, disputes, and other communication hurdles.

Finally, according to the Ease of Paying Taxes Index (34.4), paying taxes in Brazil is a burden,
along with the high import taxes (Globaledge, 2023).

10
See Appendix C to observe Incentives provided by Brazil for foreign investors.

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3. CHALLENGES

3.1 LEADERSHIP AND MOTIVATIONAL SYSTEMS

According to the Hofstede Framework for Brazil, a participative leadership style could make
Brazilians feel uneasy because their country values collectivism above Individualism. This might
be the case since many Brazilians anticipate social and power disparities (Power distance)
(Torres & Bernardo, 2021). Brazilian businesses have a very autocratic and hierarchical
management style. The expectation among workers is that a supervisor will act as a leader,
successfully balancing the needs of the business and those of the employees. Hence, having a
confident demeanour and high integrity are both crucial for leadership in Brazil. Social skills are
more significant than technical knowledge for international executives working in Brazil
(Individualism). The most consistent factor influencing leadership thinking is likely culture
(Alban & Hasenfratz, 2023).

Regarding those mentioned above, we suggest using a hybrid of eccentric and intrinsic
motivational systems. I would employ a tailored system clarified in the table below predicated on
Brazil's score on Power distance, Individualism, and Indulgence.

Table 5 – Motivational systems

MOTIVATIONA - Flexible and stable working conditions: Brazilians are known for
L SYSTEMS leading peaceful, leisurely lives. Thus, allowing employees to adapt their
work schedules, such as by offering flexible hours and work-from-home
days, can be an excellent approach to stimulate them (Wilkońska, 2023).

- Development and career growth possibilities: We will offer

possibilities for employees to advance in their jobs and enhance their
talents to compensate for Brazil's lack of educational and personal
growth, such as classes, seminars, and more (Wilkońska, 2023).
Furthermore, we will implement a system where staff receive bonuses
for accomplishing predetermined goals to increase motivation. This

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 complements achievement-driven motivation since the reward produces
a gratifying sense of accomplishment. The employee will be rewarded
extrinsically and feel satisfaction from fulfilling the company's wishes
with both motivation types (Valamis, 2023).

- Team-building exercises: Developing solid interpersonal relationships

is essential in Brazil. As a result, team-building exercises aim to improve
employee cooperation and communication (Wilkońska, 2023).

Source: Own work.

3.2 COMMUNICATION ISSUES ANALYSIS

Communication issues may arise for Nando's managers operating in Brazil due to cultural
distinctions between the home and host countries. They may encounter the following
communication barriers, along with alternatives.

Table 6 – Mitigation of communication issues

MITIGATION OF - Linguistical discrepancies: The Brazilian Way Of Doing Things, or

COMMUNICATIO "Jeitinho Brasileiro," is well-known in Brazil (Hough, 2022). Most Brazilians
N ISSUES take great pride in their language and are typically hesitant to speak other
languages. A linguistic barrier would cause misunderstandings, which could
result in disputes (Soh, 2016).

- Regional cultural differences: Brazilians come from diverse cultural

backgrounds, naturally impacting the country's social mores towards
communication and business. Compared to other Brazilians, each region's
unique cultural similarities influence how they do business. There are cultural
identities even among them that are yet unidentified. However, it is still
essential for us to make some generalisations (Dossantos, 2019).

- Hofstede Framework dissimilarities: As previously mentioned, differences

in Hofstede Frameworks can induce communication and relationship concerns

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 as well as to have an impact on a company's reputation abroad. However, only
if a company disregards or demeans the host country's cultural norms can this
lead to poor press and harm the firm's brand image (Kumar & Singh, 2011).

Source: Own work.

As a result, we suggest resolving this by hiring natives of the targeted country since they will be
more knowledgeable about its politics, laws, market, and culture, as well as maybe already have
established networks that we can leverage to the firm's advantage, thus facilitating the integration
procedure and operation in Brazil (The Franchise Company, 2022).

3.3 STRATEGIES TO ENHANCE NEGOTIATIONS IN TARGETED COUNTRY

Sobral, F, Carvalhal, E, and

Almeida, F. (2008). ‘The
Influence of Culture on
Negotiation
Styles of Brazilian Executives’,
Journal of the Iberoamerican
Academy of Management. 6(2),

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pp. 107-119. Available at:
http://www.emeraldinsight.com/
doi/abs/10.2753/JMR1536-
5433060203 [Accessed 17 June
2016]
Sobral, F, Carvalhal, E, and
Almeida, F. (2008). ‘The
Influence of Culture on
Negotiation
Styles of Brazilian Executives’,
Journal of the Iberoamerican
Academy of Management. 6(2),
pp. 107-119. Available at:
http://www.emeraldinsight.com/
doi/abs/10.2753/JMR1536-
16
5433060203 [Accessed 17 June
2016]
Sobral, F, Carvalhal, E, and
Almeida, F. (2008). ‘The
Influence of Culture on
Negotiation
Styles of Brazilian Executives’,
Journal of the Iberoamerican
Academy of Management. 6(2),
pp. 107-119. Available at:
http://www.emeraldinsight.com/
doi/abs/10.2753/JMR1536-
5433060203 [Accessed 17 June
2016]
Brazilians perceive negotiating as a process for creating long-lasting, mutually beneficial
partnerships. Before addressing the contents of proposals, Brazilian parties devote most of their

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attention, effort and time to developing bonds and establishing relationships with their
counterpart (Sobral, et al., 2008).

Consequently, we would integrate the relationship-based culture and the polychronic strategy
into time management, illustrating how Brazilians incorporate social-bonding activities with
task-specific conversations during negotiations. These variables have repercussions on us, so we
should be wary and prepared for most of the bargaining process to involve activities to establish
relationships and foster social connections before task-specific discussions of the proposal (Katz,
2011).

Secondly, considering that Brazilians are accommodating of personal schedules, we should not
stereotype them as being unfocused or flustered. Scheduling additional time gaps between
scheduled activities will assist us in effectively managing our schedules and, therefore, will
compensate for the Brazilian counterpart's flexible time management structure and lack of
adherence to strict deadlines (Soh, 2016).

Thirdly, Thirdly, we adjust to the high-context orientation, which contends that much
information is implied rather than expressed explicitly. We must adapt to the Brazilian
agreements, as they mostly lack legal enforcement (Bargsted, et al., 2017). Thus, since the
agreements involving Brazilian parties are often not subject to legal enforcement, we must adjust
to them. (Katz, 2011).

Lastly, due to the Brazilians' emphasis on collaborative and harmonious orientation culture, we
must establish strategies which avoid confrontation and work towards a mutualistic settlement
when there is conflict (Kapoor, et al., 1996).

3.4 LOCAL AREA’S CULTURAL PROFILE

Brazilian culture is broad and creative, and the nation is well-known for its lively festivals,
unusual cuisine, and varied music and dance forms. A blend of indigenous, African, European,
and Asian cultures coexist throughout the nation, which has helped to establish a unique national

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identity (Nicol, 2012). Nevertheless, Brazil has issues concerning poverty, inequality, violence,
and prejudice, all of which impact its local communities in various ways (The World Bank,
2022). To address these concerns, the government has implemented various plans and policies.

Table 7 – Plans and policies to improve local communities

- The 'Bolsa Familia' programme offers funding to low-income

families in order to help them meet necessities, including food,
education, and healthcare (Martins Neto, 2017).

- A programme known as ‘zero deforestation’ aims to achieve net-

zero deforestation of the Brazilian Amazon by 2030 (Viglione, et
al., 2023).
PLANS AND POLICIES
TO IMPROVE LOCAL - Initiatives by the Brazilian government have been established to

COMMUNITIES safeguard and promote local communities’ cultural heritage

(Prates, 2022).

- Within the first 100 days of Lula’s administration, the

government is anticipated to release new internet regulations.
Misinformation, tax challenges, and content generation are
supposedly three things the reforms would address (Santos & Rajão,
2023).

Source: Own work.

In conclusion, Brazil's cultural profile reflects its vibrant population and emphasises the need for
continued efforts to address social and environmental challenges. Working with regional
communities and stakeholders to establish long-term solutions will be crucial as the country
keeps confronting these concerns.

4. RECOMMENDATIONS

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The country's economic, legal, political, and cultural framework provides advantages and
disadvantages for the company considering operating in Brazil. Despite its current trends,
Brazil's economic potential is substantial as the government strives to allay these concerns.
Moreover, we will encounter challenges from a complicated legal system, corruption, and social
injustice. Nonetheless, initiatives have been undertaken to strengthen Brazil's legal system and
reduce corruption. When operating in Brazil, we will have access to possibilities due to the
country's rich cultural environment and profile; nevertheless, we must adequately negotiate these
differences to take advantage of these possibilities.

The following are some of the arguments behind our recommendation to enter the Brazilian
market:

Table 8 – Recommendations

- Leverage large and expanding market and its importance: With 210
million people, Brazil is the sixth most populated country in the world. One
of the foundations of the Brazilian economy is the food service industry. A
rising older population with more leisure income and the hectic lifestyle of
the working have expanded food service outlets ever since the COVID-19
epidemic. As a result, takeout, on-the-go dining, and home delivery trends
have emerged, generating new distribution channels (Mordor Intelligence,
2021).

RECOMMENDATIONS - Leverage the current sector environment: According to the Market

Competitor Analysis, Brazil's unorganised industry has led to a highly
fragmented food service sector. In other words, the marketplace is highly
competitive yet lacks monopolistic firms. As a result, Nando's will
effectively enter this market due to product differentiation and the need for
more competition for the company's niche offering. Regarding fast food,
we can observe how Brazilian society is becoming more global. Foreign
firms are welcomed, facilitating the purchase of their goods for them. Thus,
we can leverage this. Moreover, the firm has a competitive edge since its
services align with regional demands, which lowers costs in various areas,
including market analysis and more (Mordor Intelligence, 2021).

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 - Amongst commonalities between the two countries, Brazil's Hofstede
Framework aspects that can be advantageous to the company include:

+ Masculinity: Society is more competitive and motivated by success

because it is more masculine (Hofstede Insights, 2022). They must be
highly competitive on both the inside and the outside of the firm in this
sector (Mathur, 2015).

+ Collectivism: This translates to the fact that in this society, people are
raised as a part of robust, cohesive groups that continue to defend their
members in return for allegiance (Hofstede Insights, 2022). For example, in
a restaurant, collaboration is crucial for success in this sector (Mathur,
2015).

- Attractiveness of the market: This country has democratic political

institutions, market-based economies and a low Corruption Perception
Index.

Source: Own work.

Notwithstanding its difficulties, Brazil has made severe advances towards establishing a more
favourable business climate. If Nando's is determined to devote the time and investment required
to comprehend and address the difficulties of doing business in Brazil, there is no doubt potential
for success. Overall, the opportunities make it viable for us to penetrate the Brazilian market
despite the difficulties outlined in this study.

5. ALTERNATIVE SCENARIOS

5.1 FRANCHISING

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Nando's should franchise internationally and enter the Brazilian market. International franchising
is a strategy suitable for new or established franchises to expand into foreign markets (Table 9)
(The Franchise Company, 2022).

Table 9 – International Franchising

- Master Franchising: Master franchising is a globally renowned franchise

business model where the franchisor appoints a master franchisee for the target
country and provides them master franchise rights in exchange for a more
significant investment. The master franchisee is the exclusive owner of the
master franchise rights, which gives them the authority to employ and distribute
the franchise's branding, marketing, and other commercial activities. The
regional network of units that the master franchisee subsequently establishes, the
number of which is generally specified in the master franchise agreement, serves
INTERNATIONAL to further the brand's reach.
FRANCHISING
- Direct Franchising: A franchise model known as direct franchising permits
the franchisor to maintain control and licencing over the franchise entirely. As
the franchisor must continue offering the same training, recruiting, and
assistance to franchisees as the business rapidly grows, this demands a
significant time and financial commitment on their behalf. Due to the
centralization of the model, it is generally accomplished remotely and is more
effective when expanding to markets with comparable cultures, languages, legal
systems, and regulations.

Source: The Franchise Company (2022).

Master franchising is commonly regarded as the simplest and most efficient way to franchise
internationally, and it has many advantages (The Franchise Company, 2022). International
franchising enables us to expand into foreign markets, add additional services, and attract
potential consumers while assuming less risk than typical company-owned expansion. By
utilising franchising to expand internationally, we save time and resources on sourcing local
employees and moving our present employees and offices to foreign facilities. Most of the
upfront investment needed is funded by the master franchisee, making master franchising a very

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affordable expansion method at the commencement of the expansion phase. Thus, we advise
opting for Master Franchising over Direct Franchising.

5.2 MULTIDOMESTIC STRATEGY

We advise Nando’s to opt for a multidomestic strategy to enter the Brazilian market. Reasons for
this include:

Table 10 – Multidomestic strategy

- Leverage consumer demand: There are little to no cultural difference

regarding food. Nando’s product is similar to local Brazilian food which
facilitates them to offer the same core menu items in Brazil (Almeida, 2018).
They can still make some concessions to local tastes too, but they only have to
do small changes. This also favours the lower cost and better efficiency as
MULTIDOMESTIC there are little to no customization (Kennedy, 2020).
STRATEGY
- Lower cost regarding local responsiveness: However, it still necessary to
employ a localization strategy to adjust the company’s image to the Brazilian
one to maintain a medium-high local responsiveness (Smartling, 2023). But in
comparison to other companies, the cost for this would be lower than usual.

Source: Own work.

Thus, the reason not to choose the global strategy as it reduces the local responsiveness and
increases its probability of failing to enter the market, and the transnational, as the product of
Nando’s is majorly tailored to the local society (Hill, 2023).

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 BIBLIOGRAPHY

Alban, G. A. M. & Hasenfratz, M., 2023. Leadership In Brazil. [Online]

Available at: https://crossculture2go.com/leadership-in-brazil/
[Accessed 26 March 2023].

Almeida, S., 2018. Brazilian Tastes Shift from Traditional to Trendy. [Online]
Available at: https://www.kerry.com/insights/kerrydigest/2018/brasilian-tastes-shift-from-
traditional-to-trendy.html
[Accessed 29 March 2023].

Bargsted, M., Somma, N. M. & Castillo, J. C., 2017. Dynamics of Political Trust in Latin
America.. In: S. Zmerli & T. Van der Meer, eds. Handbook of Political Trust. s.l.:Pontificia
Universidad Catolica de Chile: Institute of Sociology.

Birnleitner, H., 2013. INFLUENCE OF MACRO-ENVIRONMENTAL FACTORS TO THE

PROCESS OF INTEGRATING A FOREIGN BUSINESS ENTITY. Proceedings from Industry,
science and policy makers for sustainable future: the 14th Management International
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 APPENDIX

APPENDIX A – Visual indices and rankings of the PESTLE analysis

A1 - Political factor

Figure: Country Risk Rating of Brazil (Globaledge, 2023).

Figure: Corruption Perceptions Index of Brazil (Globaledge, 2023).

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A2 - Economic factor

Figure: Economic Snapshot of Brazil in 2021 (The World Bank, 2021).

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A3 - Social factor

Figure: Life expectancy in Brazil (The World Bank, 2023).

Figure: Poverty Headcount Ratio of Brazil (The World Bank, 2023).

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Figure: Hofstede’s Framework of Brazil (Hofstede Insights, 2022).

A4 - Legal factor

Figure: The Instituto Nacional de la Propiedad Industrial (Santander Trade, 2023).

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Figure: Legal Codes of Brazil (Santander Trade, 2023).

Jurisdictions

Figure: Jurisdictions of Brazil (Santander Trade, 2023).

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APPENDIX B – United Kingdom’s Hofstede Framework

Source: Hofstede Insights (Hofstede Insights, 2022; Hofstede Insights, 2022)

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APPENDIX C – Brazil’s incentives for foreign investors

Source: Thomson Reuters Practical Law (2022).

38