Levendary Cafe: Case Study: Levendarary China

LEVENDARY CAFÉ: PART-2

THE PROBLEM:

The problem identified in the report is Chen, the president of Levendary China, has completely changed the core design of the company to give local look and feel. Even the Levendary’s classic wooden framed upholstered chairs are replaced with an alternative of local made plastic chairs by Chen. The change in the taste preferences by the Chinese customers is another problem which made Chen to change the core values of Levendary according to the local demand. The Head-Quarters of Levendary also faced problem with Chen’s stubborn attitude and his reluctance for the change in operations in China. Foster’s leadership is another issue to be considered due to lack of international management experience. The shares

ADVANTAGES:

Chen is capable of expanding and growing the business enormously with the support from the management of Levendary café. Chen is the right man for the job with the knowledge of Chinese culture. Establishment of China headquarters help to track the accounting and financial reports of operations carried out in China. This strategy will help in increasing the number of outlets in coming years. This also improves Chen’s loyalty towards Levendary.

DISADVANTAGES:

The main disadvantage of this strategy is that the China operations cannot be controlled by Denver head office. Levendary fails in acquiring global recognition for its brand. The core hierarchical structure of approach changes with this strategy. Levendary loses its core values and may become inferior choice to the customers in China. Levendary may slowly turn into a local brand losing out its core western culture.

RECOMMENDED STRATEGY 3:

Mixed concept of two menus with two different rooms in the same building out of which; one block consists of American concept with its core menu, design and western culture, and the other block is designed with Chinese concept with its menu and operations changing according to the market demand.

• Customer loyalty in U.S market

• Using organic ingredients

• Nick White(COO) with 30 years of operating experience WEAKNESSES:

• Levendary’s domestic business slowing down

• Failure in the approach of business in small towns

• Personalized approach to customers

OPPORTUNITIES:

• The concept of multi-unit restaurant business

• High fragmentation in food service industry

• $600 billion food service industry with 960000 locations THREATS:

• Losing market shares when compared to other restaurant brands

• High competition

PEST ANALYSIS:

POLITICAL:

• Communist party of China which maintains the central power in government and media

• Excessive involve of government in taking decisions

• Corruption

• Strict labor laws and tax rules ECONOMICAL:

• World’s largest producers of rice, corn and tea

• Major trade partners are U.S, India, Japan, Korea,