What is your evaluation of the way Levendary Café has entered the China market?
As the newly named CEO, Mia Foster faced enormous challenges in assuming duties from Howard Leventhal, the founder and departing CEO of the popular Levendary Café brand. As a first-time CEO who lacked international management experience, she took the reins of a 3,500-unit, $10 billion business during the midst of a transitional period of expansion into the China market. In 2008 Levendary’s domestic growth had slowed and the company recognized the opportunities the Chinese market could offer. With its rising population, continually growing GDP, and a strong middle class consumer behavior that mirrored Levendary’s domestic formula for success, Foster realized that managing Levendary’s entry into the Chinese growth market would be key to the company’s long term growth and success. This move, however, was met with skepticism from Wall Street and many of Levendary’s corporate staff who held concerns that the company's major expansion into China involved moving too far from Levendary's well-defined concepts of store design and menu. The Levendary brand had a strong track record, but investors as well as internal staff had strong reservations regarding Levendary’s current domestic financial position and that, coupled with Foster’s lack of international experience, caused the Levendary stock to trade at a market discount (Bartlett, 2013).
Levendary’ entry strategy into the Chinese market was multi-faceted and relied on the expertise and judgment of Louis Chen, who was appointed China VP by Leventhal prior to her appointment as CEO. The company made a strategic decision to forgo opportunities for a joint venture with an established Chinese partner, which is a tempting proposition for many companies. Instead, their strategy was to leverage the attributes and experience Chen brought as China VP