What should Mia Foster, the new CEO of Levendary Cafe, do about Louis Chen?

It is very evident that Louis Chen is an effective manager, who is growing or evolving, as the
business is evolving. In addition, he is a local guy who understands market structure, type of
competition, opportunities, and challenges.

His view is very clear about how business should be expanded without unnecessarily allocating
resources for such processes and operations, which are not required.

● Mia foster should approach Chen with an open mind that will allow her to listen to Chen
because Chen, being on the ground, has a lot of knowledge about the Chinese market.
By listening to him, Mia will be able to learn a few things about the Chinese market that
she did not know about.
● According to the behavioral science approach, the behavior of individuals in the
organization affects the way the organization will function. Thus, if Mia approaches Chen
from a position that will allow him to vent his opinion, Mia will be able to come up with the
best mix for the company’s business in China.
● Mia foster should be firm when dealing with Chen but then in a reasonable way. She
should be able to make Chen understand the position of the company concerning its
history as well as its objectives and make him appreciate why some things have to
happen the way the main office has decided.
● According to the case, Chen seems not to want to let go of the free hand he had been
given in the running of the Chinese business. He seems to throw tantrums whenever he
is asked to conform to certain standards. Thus, Mia should be diplomatic and convincing
when dealing with Chen but firm at the same time because she is the authority.
● Mia should be able to negotiate and convince Chen on the importance of keeping
standard operation procedures for all the branches operating under the Levendary café
name. This strategy will be the best way of managing costs because varying standards
would mean that extra costs are incurred in managing the different variations.
● Mia should make Chen understand that at a larger scale, there would be a rise in costs
in such areas as inventory, which will be unique to each other. In this case, Mia should
apply the informal leadership skills that would allow her to make Chen see sense of what
the management wants.
● Mia should be flexible when dealing with Chen because there is pressure so far from the
management at the headquarters that the Chinese business should be run on the
American model and that Mia should push Chen to follow that order.
How should Levendary Cafe manage its international operations?

● As Lvanedary’s business in U.S was slowing down, its management decided to explore
the other parts of the globe. They should strategize the international operations in the
following approach.
● Glocalization: Levendary Café’s management should follow decentralized approach for
its international operations as the culture varies from country to country, the interests of
the people also vary. Its better to adapt to local needs and desires to capture the market.
● They should have a meeting once in every two months between Denver H.Q and the
other operating areas to discuss about its operation strategies, to review the status of the
business at the other parts of the globe and to resolve conflicts if any.
● Localization of the Menu should be allowed at all the outlets but at the same time some
American cuisine should also be present in the outlets where the Americans frequently
visit like near Embassies and big MNCs.
● The ambience of the outlets should be standardized across the globe. Most of the
consumers are attached to the restaurant or outlet’s ambience and it distinguishes the
company’s outlets from other outlets across the globe.
● Ensure that the common value system of the organization is preserved like customer’s
delight, using organic ingredients only and the concept of “Tasty, Fresh and Good”.
● Ensure that the financial reporting is done in GAAP format only as its not sustainable
practice to give reports in another format. The whole organization should have common
report format.

What recommendation(s) would you make to Mia Foster on the issue she raised at the
end of the case?
a) What strategy should Levendary adopt to drive its expansion in China?

Levendary should adopt both localization and standardization. It is a kind of adapting a global
strategy to the needs of the local consumer, in other words a glocalization strategy. To balance
with these two strategies (localization and standardization) is the biggest challenge Levendary is
facing to drive its expansion in China. The Chinese consumer has different taste compared to
the American. But this does not change the fact that the Chinese consumer is open to the world.
It is important for Levendry to standardize all Chinese Levendary stores, and to remain the
same concept of the parent company. Moreover, it is important to remain the classic sandwich
and soup to meet them with the Chinese people’s tastes (red bean, chicken…). And to focus on
offering a quick casual atmosphere.
b) Who should have the responsibility to make and implement those changes?

The parent company has to send some expatriates of its administrative staff group in order to
communicate and exchange operation ideas. Those expatriates are the persons who will
participate in decision making especially that they will be aware of the situation and of the needs
of foreign demand. And know how to answer to this demand.

RECOMMENDATIONS:

● Give time to Chen to further expand the business in China as for the past one year he
has been doing a great work for the company. And to reach the break-even point the
company requires a substantial amount of time and Mia should wait for the results in
terms of profits to come.
● Creating and building a strong management team comprising of Denver and Chinese
representatives who will be responsible for liaison.
● Making Chen understand what are the Levendary Café’s core values and ensuring that
Chen doesn’t deviate from them. (TFG- Tasty , Fresh and Goodness and other global
policies of the company).
● Renovate and innovate Levendary Café across China by analysing market areas for new
restaurants and customers by following KFC’s and other successful American
restaurants approach.
● Mia Foster must develop a good relation with Chen for the growth and profitability of the
company as for the past one year he has shown an exemplary performance by
expanding the business in the Chinese market and Chen might become an asset to the
company in the long-run if the communication gap between them gets filled up and they
work together for the betterment of the company