...INTERNATIONAL MANAGEMENT CASE ANALYSIS-LEVENDARY CAFÉ: THE CHINA CHALLENGE SPRING 2015 The following are the guidelines for completing the case analysis for Levendary Café: 1. Read the case carefully to gain a good understanding of the case and all the issues facing the company. 2. Identify the Environmental Factors (Political, Legal, and Technical) that exist in China and that have an impact of how business is conducted in China compared to how it is conducted in the United States. Focus on the ones that specifically affect the business that Levendary Café is in. What are these factors and how specifically do they affect Levendary Café’s business in China. 3. Identify the Economic and Demographic factors that exist in China and discuss how they affect Levendary Cafés business in China. 4. Identify the major Cultural Differences between the U.S. and China, and explain how they affect doing business in China for Levendary Café. 5. Identify differences in Ethical practices and values between the U.S. and China and explain how these differences affect doing business in China. Focus on those differences that affect the business that Levendary Café is in. 6. Using Hofstede’s Cultural Dimensions, compare the U.S. with China and explain how the differences would affect doing business in China for Levendary Café. 7. Based on the Cultural differences between the U.S. and China and the Hofstede’s Cultural Dimensions analysis, what is the most effective...
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...Levendary Café: China Challenge Levendary Café faced some successes and many challenges when penetrating the Chinese Market for their first time. The goal of this case study is to understand what kind of initial strategies did they adopted and the main problems that arouse as a result of their decisions. The analysis will point out the main issues faced by the organization as well as potential alternatives that could be used to address their concerns. Finally, an optimal solution will be proposed in order to resolve the situation in which Levendary Café is involved. Levendary’s first steps and industry analysis Although Levendary Café’s decision of entering Chinese market faced some tough challenges, the organization also took some good steps. First of all, the decision of entering China as the target market was a good decision. According to a report by IBIS World, “this industry revenue grew by 3.4% to $190.2 billion in 2011 and 2.6% to $195.2 billion in 2012. Industry revenue growth will level off as growth rates approach historical levels and the industry is forced to contend with the market saturation issues it has grappled with over the last 10 years.” (Zwolak, April 2010). Since the American market was already saturated, Chinese market offered an attractive alternative of expansion for Levendary Cafe. China was a market of 1.4 billion people where economic growth was around 14.5% and where growing middle-class citizens, who demonstrated a positive acceptance of quick...
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...Case Analysis Levendary Café – The China Challenge Problem Identification Levendary café is the American based multi-unit restaurant which offers quick casual dining to consumers. With the rapid GDP growth and a growing lifestyle trend to eat out in China, Levendary Café decided to expand its operation into Chinese market to implement its concept of “delighting the customers” with a high quality based offerings (Bartlett & Han, 2013, p.4). Due to the lack of experience and knowledge about Chinese market, CEO Leventhal decided to give Chinese market experienced Louis Chen the full control of running the operations in China. However, after one year operation in China, the company’s head-quarter did not satisfy the Chinese performance. Recently, the company’s domestic demand was declining, as well as its stock price. The new CEO Mia Foster was facing a big challenge by Wall Street’s skepticism, since they did not believe Foster’s ability to build a multi-national brand due to her lack of previous international management experience (Bartlett & Han, 2013, p.1). In addition, because of the communication breakdown between Chen, Foster finally decided to investigate Chinese operations which under Chen’s strategy. Thus, the main problem in this case is the conflict between Foster and Chen due to their different views of the market and different management styles. The first issue that Foster facing is the reporting process from China back to America. Levendary Café’s...
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...Levendary Cafe: The China Challenge Case Analysis Levendary Cafe entered into the fast growing China market and instead of keeping their established US concepts intact they changed the store design and menu selections in order to align themselves with the culture of the Chinese people. Although the strategy has proven successful, the American headquarters, prompted by the new CEO, opine that their operational concepts should remain globally intact. In my opinion the main issue in this case is not the entry strategy of Levendary Café into China but a serious communication breakdown in the organization exemplified by the following factors: 1. Management style differences. CEO Leventhal was very hands off with Chen and obviously allowed Chen to have full control over the operations and strategy for China. This differs from Foster’s management style which is more corporate control driven and focused on standardization. 2. Culture differences. It is naïve to ignore cultural differences when globalizing any organization which is the stance taken by the new CEO and the American headquarters. 3. Limited international experience. China is only the second international market that Levendary Café has entered into besides their partnership in Dubai. So, organizationally, they lack globalization experience and this is compounded by the new CEO’s lack of international experience and specifically her unfamiliarity with the China market. Foster should proceed with caution so that...
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...Case Guide-Levendary Just weeks into her new job, Mia Foster, a first time CEO with no international management experience, is faced with a major challenge at Levendary Café, a $10 billion US-based fast food chain. Strategically, many of her corporate staff have become concerned that the company's major expansion into China is moving too far from Levendary's well-defined concepts of store design and menu. Organizationally, Foster has been frustrated by the apparent unwillingness of Louis Chen, president of Levendary China, to conform to the company's planning and reporting processes. Meanwhile, financial evidence shows that Chen's efforts have produced strong results and suggests that he knows China far better than U.S headquarters does. The entrepreneurial Chen has resisted attempts by Foster and others to discuss corporate plans for China. As Foster flies to China to meet with Chen she faces a decision that will determine the future of Levendary China and perhaps the entire globalization effort: can she manage Chen at all, and if so, how? Learning Objective: 1. To explore the important international strategic issue of standardization versus adaptation, and examine the structures, systems, and processes needed to manage this tension. 2. To review the evolving roles and responsibilities of country subsidiary management and the corresponding changes in the nature of the headquarters-subsidiary relationship. 3. To examine the nature of headquarters-subsidiary controls, by differentiating...
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...Introduction: This case study shows the challenge the one of American Multi-unit restaurant to Chinese market. China was a ripe for investment and it was very attractive for many of the U.S companies because Chinese annual growth in China was 14.5% for the past decade and the population was 1.4 billion people and in contrast, the economy in the U.S.A has been turned down and the market size have been downsizing. However there were a lot of difficulties in success and not all companies succeed in China. The I institutional voids and Chinese politics, culture, specific market needs make difficult for some companies to success in Chinese market. The new CEO, Mia Foster is now Levendary Café is now facing the struggle in management of the Vice President in China and the business strategy. Case Questions: Q1. What is a Multi-unit Restaurant (MuR) Business? How big is it? Is it a consolidated or fragmented industry? What are its economics (use the Porter’s Model to evaluate profitability in addition to the data given in the case)? Multi-Unit restaurant business is a geographically dispersed stores built from standard units which are aggregated into larger geographic groupings such as districts, regions, and divisions. Every tier has its own set of managers. Multi-Unit Restaurant concepts consist of the following 3 segments. I. Specialty Establishments mainly served snack and beverages under$5 such as Starbucks and Dunkin’ Donuts. II. Quick Service Restaurants, as it is called...
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