levendary café

Problems

1. long established brand image of Levendary is not maintained in the Chinese market
2. Misalignment between the objective of the company in the U.S. and Levendary Café China’s
operation style
3. Different reporting system between china and USA (GAAP)
4. Is the Chen the best candidate for china operation?

Root cases for these issue

1. Over freedom giving to Chen to manage the china subsidiary.

Option to tackle the situation

1. Taking reference the of KFC approach, Mai should bring more standardization in look and feel
of the restaurant , ambience and organic health food style whereas the menu need to aligned
to regional taste , as they are also bring reginal taste in just stores also.
2. There should be a Chinese head quarter for the china financial reporting. In order to formalize
the reporting process, Foster hires an International Financial Analyst. Chan argued that it is too
expensive and that it will complicate expansion efforts in China. Although Chan makes a couple
valuable points, it is necessary to protect the integrity of the companies reporting structure.
The establishment of a head office in China will create a bottom up approach of communication
structure, where Chen will report to the Chinese head office and the successively the Chinese
head office will report to US. This will create a structure for reporting as well. Human resource
issues can be dealt by the Chinese headquarters separately keeping the culture and legal points
in view.
3. all new and existing Levendary Café’s in the Chinese market conform to a specified design and
layout that provides the customer with a clear and consistent brand message.
4. Extend the Chen contract ,Chen must work with the Chief Concept Officer to develop a
standard menu for the Chinese cafés, yet allow for some customization for regional tastes.
5. Training for Chen
6. Marketing through social media :Currently Levendary China is relying on marketing by opening
at prime locations. Marketing should be done through social media as it has greater impact and
a mass reach. Social media marketing should start as soon as possible.
7. takeaway counters: China the concept should prevail but these outlets should be
segmented separately as “Levendary Cafe Express” so that Levendary Cafe brand can be
recognised but at the same time remains differentiated in terms of service.

Action plan

1. firstly change the extend the contract of chain and renovate the look of the already 23 resturant
to stop diluting the brand image of café
2. Chen must work with the Chief Concept Officer
3. Monitor the new business plan Levendary china with chen and see if the band image is aligned
with the future plan of china .
4. Setup China headquarter and It may incur cost upfront but in the long run will help. It can serve
as the centre for entering other Asian markets in future. Furthermore the bottom up
organisational structure will help Louis Chen to work freely without reporting to US as a
compulsion. Rather all the reporting will be routed through the Chinese head office with whom
Chen will be more comfortable. The headquarters in China can adapt the HR, marketing and
operation policies according to the local need keeping a balance with the Levendary US
standards.