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 between administrative control, strategic control, and operating control, and allowing students to explore the need for and appropriateness of each mode.
The Case. Questions for review • Evaluate and provide your view of how Levendary entered the China Market • What changes ( if any) should Mia Foster make? And in particular what should she do in regards to Louis Chen. • What would anyone at headquarters consider, or recommend, or do with Mia’s recommendation. • What should Ms. Foster do about Mr. Chen. • There are 3 options 1) leave him alone, 2) Manage him and 3) remove and replace him. Analyze each option in light of market needs, headquarters needs and evaluate Mr. Chens strength and weaknesses under each scenario. • What action plan should Mia develop to continue growth in China? • What is needed to succeed in the food franchise business • Why have quick service restaurants developed so slowly (hasn’t it?) in he market? • Could you prepare the agenda ( talking points)for her meeting with Mr. Chen • What should be desired result of her meeting with Mr. Chen. In other words how would she measure meeting success and how would she define failure?

Hints: • Consider issues of rivalry and tension between headquarters and locals • Evaluate industry operations and to evaluate the strategic need for centralized control vs local flexibility • Evaluate how well have Mr. Chen and corporate executed their roles, before Mia’s arrival • Investigate “ integration/responsiveness charts” and use it in your analysis • Can these charts help evaluate operating needs • What do you think of Ms. Foster’s “Stages theory” of country management responsibilities.