Levendary Cafe – Case Study Example
Levendary case Roles and responsibilities, and the current situations and concerns of the stakeholders Mia Foster Foster’s roles, as the chief executive officer, include leading the organization, leading and implementing the organization’s strategies, making decisions on risks and opportunities surrounding the company. The current situation requires her decision on the future of the company in China and the future of Chen.
Lucien’s roles and responsibilities are organization of the food development team and the marketing teams to ensure that the organization remains competitive in the industry. He also determines the company’s products to customers. The current situation challenges these roles in China and his concern is aligning the China subsidiary to the U.S. standards.
Roles and responsibilities of Louise Chen are developing a strong market base that can attract and retain franchisees and to undertake any necessary role and responsibility for the company in the Chinese market. A conflict in strategy is arising and his concern is infringement of his operational freedom and cultural difference.
Reason for the company’s expansion from the U.S. to China and its selected strategy for expansion
The company expanded to china because of the Chinese growing economy and change in demographic factors that expanded the country’s market. The economy had grown by 14.5 percent and the urban population increased by about 10 percent in a decade. More women had also engaged in employment to boost market potentials. The company chose direct investment as its entry strategy and employed Chen as spearhead the strategy.
Description of the major issues facing Levendary café in China
a) Decision about global standardization vs. local adaptation to the China Market
The Denver office prefers a standardized approach while Chen believes that flexibility to the local environment is appropriate. The case of Denny’s in Japan supports Chen’s perspective. McDonald’s case however supports Denver’s perspective.
b) Authority of who is in charge in China
The Denver office, as the head office, attempts to control the subsidiary while Chen is resistant and believes in he has control in China. He asserts that he signed a contract that allowed him operational freedom and would like to have the freedom until the contract expires.
c) GAAP/Financial Reporting issues
The Denver office recommends conversion of financial statements to the standards applied in the United States. Chen, however, believes it is a waste of resources and may face legal challenges from China’s tax laws.
d) The future of Louis Chen with the company
Chen likes the organization and would like to continue working even after his contract expires. His approach is however against expectations from Denver. Forster is also considering his competence for the company’s growth stage in china.
Revenues, sales, and profits for the company, worldwide in 2010
Levendary’s global revenues, sales, and profit for 2010 were $ 10797423, $ 9248134, and $ 780563 respectively. For China, sales were the only source f revenue at $ 3261598 with a loss of $ 143620.
Courses of action Mia has for addressing the challenges the company currently face
The company faces a challenge of enforcing a standardized strategy for customer value but Chen appears resistant. One of the strategies for dealing with the issue is to replace Chen with a professional manager who can conform to the head office’s demands and spearhead success in China. Another possible course of action is retaining Chen but with conditions that he needs to change his attitude and to change his management approach to that of the professional manager. Mentorship and training may be necessary for the strategy. The last option is to allow for flexibility in operations in China and retain Chen’s freedom in order to facilitate success that is imminent in the market.
Patton, Joseph. Management strategy. New York, NY: McGraw-Hill. 2013. Print.