Levendary Cafe Essay

Levendary Café currently has 3,500 stores in United States, 23 stores in China and a partnership in Dubai. Its original plans were to expand its store coverage in China to balance out the slowing growth in the US. Despite, Levendary China’s insisting regarding complete customization to local taste Levendary Café needed to keep in mind a consistent brand image focused on offering high-quality food and comfortable environment.

The first step is to define the goals in China operation. For defining goal, one needs to identify key issues faced in meeting targets in Chinese operations. Few of the underlying issues that needed to be addressed are standardization vs adaptation, financial reporting issue and the organisation structure of Levendary

The current organisational structure of Levendary Café inhibits the growth of Chinese operation. The current structure is focused entirely on US operations. Chen is currently reporting to COO of US operation and this makes China’s operation less of a priority for the company. In the rush to open more stores, Levendary Café in China relied on pure adaptation strategy which fragmented its carefully created company image. Moreover, by customizing the menu offerings so dramatically, Levendary China could not save by buying ingredients in bulk for all stores or appeal to the Chinese population’s willingness to pay more for the Western fare. Knowledge sharing, communication, and reporting between Levendary US and Levendary China was limited which resulted in non-standard financial reporting. Being a publicly listed company the need for standardization of reporting process was critical as non-GAAP numbers from China in the financial report was a risk for Levendary US.

Based on the above analysis the first recommendation is to shift the focus away from adaptation to begin building a consistent brand image in China. In order, to regain full control of its branding Levendary Café should consider establishing wholly owned operations to avoid losing further control. By transitioning stores menu to Levendary’s core US menu while leaving room for local menu customizations. Levendary China can benefit from economies of scale from aggregating raw materials and take advantage of Chinese consumers’ willingness to pay premiums for Western