- Introduction
The success of Levendary Cafe as it live today as one the most recognizable brand in the restaurant segment is with regards to the primary aspect of the organizations willingness to take risks and evolve the core concept of the restaurant in tune with the trends in a globalized economy.
Risk taking can be traced to the founder Howard Leventhal management decisions which resulted in the astounding success of the quick casual restaurant in an ever intense restaurant segment.
The main services provided which distinguished Levendary Café from other competitive brands are their menu that includes wholesome soups and salads and sandwiches.
Although the aforementioned are served in every restaurant but the key difference is the ingredient used by the Café i.e. organic grains in breads and hormone-free naturally raised meat in sandwiches.
This aspect has led to the Café charge premium pricing from its customers who are more than happy to pay for a healthy meal in an environment that is relaxed and welcoming and, therefore, the affect on the bottom line has been positive by making it a brand worth ten billion dollars.
The customers of Levendary Café have been loyal consumers who rave about the Café by stating that ‘Eating at Levendary makes me feel rich.’
With success Levendary Café in the U.S market the focus was shifted with regards to making it a multi-national brand, this in essence decided due to the stagnancy in the U.S. market the focus was shifted to the vibrant and highly complex Chinese market.
Mia Foster as the new CEO had to face the skepticism of the market after her appointment and besides her inexperience in handling international operations was one the factors.
Also, the apparent unwillingness of Louis Chen to conform to the planning and reports process of the company made Mia Foster visit the Chinese market to decide the operational mechanics of the Chinese market.
- SWOT Analysis
An organization of the magnitude of Levendary Cafe has to see the sights and grasp the strategic initiatives in terms of brand’s standing in the Chinese market and the feasibility of a way forward in a profitable way.
In this regard an analysis is conducted in order to come up with the internal and external issues of an organization based on the SWOT analysis:
- Strength
The biggest strength of Levendary Café is their brand name and the differential advantage in terms of ingredients and the taste coupled with the serene environment of the restaurant with immaculate customer service.
The flexibility of Levendary in terms of menu adaption with regards to local taste is another aspect that place Levendary Café philosophy of delighting the customers as a strong point and stands in good stead in the China challenge.
Innovation in terms of product development by the concept team is also a strong point which helps keeps the brand fresh in the eyes of the consumers, and that is significant in terms of a food brand and helps in boosting sales immensely.
The leadership of Levendary Café is also one of its primary strength in view of risk taking and also by taking the right decisions at the right time.
The diversification of the Café has been strong with items such as coffee, cookies, etc. to complement the soups and sandwiches.
The strong financial clout as a $10 billion dollar company has helped Levendary to venture into new locations such as China.
Trained Corporate Chefs are the reason the healthy and wholesome eating has been embedded in the culture and thus the famous slogan Tasty Fresh Goodness came to light.
- Weakness
The primary weakness in terms of Levendary Café and its China challenge is the lack of international exposure of Mia Foster and her relationship with Louis Chen in view of determining the future of Levendary China.
The image is the foremost aspect when it comes to Levendary Café, however, with plastic chairs in some of the restaurants and dumplings offered in other, the image can be weakened severely on a global level.
Lack of a standardized format in terms of Generally Accepted Accounting Principles (GAAP) is a big weakness in terms of sustainable business practice.
Another perceived weakness in the premium pricing, this is in view of the fact that the health based food is the new fad globally and numerous restaurants with the same focus have been launched less price of the food on the menu.
In terms of revenues as reported in the case study 28 to 30% incurs on the ingredient which is a significant amount
- Opportunities
Opening business set up in a different location to truly make Levendary Café a multi-national as evidence in the case study of China is a big opportunity.
The acquisition and joint ventures of other brands in the restaurant category that are not doing well in China and globally is an opportunity which help Levendary increase its muscle and presence in new markets in terms of increasing the brand portfolio just like KFC had done in China.
One big opportunity to increase revenues for Levendary Café is to reduce the cost in terms of operations that will help in improving the margins for Levendary in terms of profits globally.
As reported the restaurants and the food industry is a $600 billion industry and in view of the growth of casual dining restaurants like Levendary café sky is the limit in terms of retaining and attracting new segments to the food industry.
The growth opportunity in China is immense in view of the population, annual GDP growth and also investing more in stores and also the growing lifestyle trend of Chinese urban population eating out coinciding with the growth in the Chinese food industry.
- Threats
The structure of reporting in terms of integrity is at a threat, in view of the Chinese operations part growing in the total revenue of Levendary Café.
The competitive threat in the Chinese market is very high as food brands such as KFC have already 3,000 restaurants in 450 Chinese cities primarily through acquisitions and joint ventures and also localizing the menu as per the Chinese market.
Pizza Hut is also a success thus the competitive players are there in the Chinese market with huge financial clout and brand name to be reckoned with.
Local restaurants are also a threat as evidence in the case of Hong Kong’s Dar Jia Le ‘Big Happy House’ and other chains as stated in the case study which will give significant competition to Levendary in China.
The no conformity of restaurant designs and space as stated in the case study is a big threat with regards to Levendary Café image.
The financial issue in terms of handling the Chinese book and the uneasy relationship which Chen and Mia share is a threat in terms of affecting the productivity of the Chinese operations and also to progress in an effective manner.
- Louis Chen
In terms of creating a working synergy with Louis Chen, it is imperative that Mia Foster create an environment of trust and understanding, in view of the fact that whenever two stalwarts clash.
The eventual loser is the organization in terms of strategic direction and being on the ball in terms of taking advantage of the environment.
One aspect that Mia Foster should comprehend is that before her arrival, the China challenge was well underway.
Louis Chen had already set up the 23 restaurants in different cities of China that were running effectively with his own style of execution in terms of the complex Chinese culture.
With the Chief Concept Officer (CCO) Lucian Leclerc irate plea to Mia to stop Louis with regards to destroying the carefully nurtured two decades of image, the critical factor for Mia to create a win-win situation was to come up with a solution.
A solution that does not alienate Lucian or Louis as both were great assets and as a newly appointed CEO it was imperative to imprint her authority with maximum support from the key stakeholders at Levendary Café.
With the image of the organization more important than a personality Mia Foster should present Loius Chen with the chance to wither collaborate with vision of Levendary Café and focus on the premium category in which Levendary operates.
With Chen’s poor skills in terms of leadership and a lack of vision it is high time for the CEO to either replace the Chinese leadership or risk losing the core brand quality of Levendary as a brand in the Chinese market that will affect the global operations also.
- Strategy
This strategy was executed by ‘adaptions of menu’ locally whether in urban, suburban and rural environment where Levendary operates in the 50 states of America.
The Global strategy of Levendary Café has been adapted on the same lines as the domestic strategy with no change at all and as evidenced in the case study with regards to information of the Chinese menu’s local adaption’s in the 23 stores of Levendary with every store having a localized adapted menu.
The strategic changes that needs to be implemented is in terms of conforming the financial reporting and the planning of China operations to the standard operational procedures of Levendary.
This will help in preserving the brand image which has been carved out with great effort and thus won’t affect the brands equity.
The recommendation in terms of the Chinese operation is to close the operations for some time and refurbish the stores the Levendary way. Research team should be working simultaneously to create new space for the restaurant and wipe out restaurants with no seating space as it totally negates the image.
The market potential is in essence of primary significance and to be able to truly become a multi-national it is imperative that the market is operated in an efficient manner to be able to create a successful model in terms of operating internationally on a big sale.
Works Cited
Harvard Business School (2013). Levendary Café: The China Challenge. Web. Date of access. 16 June 2014
