Levendarary Cafe Case Study Solution

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

The inconsistent accounting and poor financials led to run Levendary China at a loss of 143620$ in the year 2010. The lack of knowledge over Chinese market is considered to be another weakness which gave a chance to an external party like Chen to lead the operations of Levendary café in china.

Focusing on the strengths of Levendary café in U.S., the strong brand presence made it a successful American based restaurant chain. It is well-known for “Tasty fresh goodness” and healthy wholesome foods. It replicates the natural wholesome goodness by its interior design, logo and colors used. It is mainly distinguished by its culture of “delighting the customer”. The management’s willingness to take risks and its welcoming and homely “look and feel” is considered to another strong driving factor for Levendary to success.

From the pest analysis, the social factors like tendency of urbanization, increasing trend of dining outside and changing lifestyles helps Levendary to forecast its future in China. As China is the world’s second largest economy, Levendary can take an advantage of increasing the number of outlets to gain more profits. Increase in the income of the urban Chinese households gives a positive hope to Levendary to continue and expand its business in

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.