Part 1
The inside chemistry of the top management at Levendary Café at the moment seem to be very confrontationist. Mia Foster the newly appointed CEO, Luciene Leclerc the tenured Concept officer and Louis Chen the business builder in China for Levendary have disharmonious roles.
Mia Foster- The role of Mia is to provide the company with strategic direction and leadership, define the business, make meaning of the market, craft a future for the company with growth and integrates the US, China and Dubai operations. The current situation puts a challenge to Mia’s role that Chen is partially playing the role of Mia in China and not willing to relinquish the assumed role rather entrusted role by Howard Leventhal, the former CEO of Levendary Café. An inherent strategic conflict (standardization vs. personalization) creates problems in execution of the business.
Luciene Leclerc: has a peculiar role of determining what the Levendary Café offer to the customer. He has served Levendary Café for almost 23 years and was close with Leventhal. He has a special knack of sensing the trends and changing tastes of the customer. He integrated the food development team, production and marketing team to carve a brand value to Levendary. He is strategic key player for Levendary. Currently he has an issue with China chain, the restaurants and food menu in China are not as per the plans developed in the headquarters. He fears that deviation from the US standards may lead to collapse of the brand Levendary and he has little influence over Mr. Chen, who seems to take independent decisions.
Louis Chen: was spotted by Howard Leventhal for an entrepreneurial spirit and the knowledge of Chinese market. In a span of one year Louis Chen started 23 Levendary restaurants in China. It can be inferred from the case that Chen is a super executioner and a person with initiatives. Currently there seem to be conflict between how Chen functions and the strategy at the headquarters in the US. Both Mia Forster and Luciene Leclerc are annoyed by the self-styled actions of Chen.
Part 2
The financial crash of 2008 and slowdown of the domestic sales, made the top management of the Levendary Café to explore expansions abroad. China was the most visible country that gives a promising outlook. The economic and demographic uptrends there were striking to the management of Levendary. The Board decided to enter the Chinese market and the coincidence of meeting between Howard Leventhal and Louis Chen hastened the further actions.
Part 3
- The company has strategic conflict of balancing standardization versus personalization. Many of the customers appreciated the customer care they experienced when they visited the outlets. The management is well aware of the values of personaliosation and the standardization, but they are not sure of to what degree and on what occasions both need to be practiced.
- Though the headquarters of the Levendary Café decides the total strategy, Louis Chen in China does not seem to consult the headquarters while making decisions in China. This has created problems for Mia Forster and Leclerc and a situation has reached a point of tough decisions. Louis Chen is supposed to execute on behalf of headquarters, instead he is working like a CEO.
- One of the issues in globalized business conduct is bringing uniformity in accounting practices. The Chinese operations of Levendary were not following GAAP standards and imposing them is risky and not following also risky.
- At the moment the future of Louis Chen with Levendary seem to be very blurry. The chances are if he cannot follow the strategy decided by the Denver office, he may have to leave. An alternate approach is if the Mr. Chen transforms into a professional manager (from a go-getter attitude), the company would appreciate and the synergistic relation shall be continued for long.
Part 4
The Levendary Café’s revenues from sales for the year 2010 are $9,248,134 and the net profit is $780,563, while Chinese revenues from sales are 3,261,598 and net income is -$ 143,620 (loss).
Part 5
Mia Forster needs to make certain tough decisions regarding the situations in China. First of all recognizing the experience and the nature of Mr. Chen, she can be patient with the issue and give a chance to Chen to reform. She may allow Mr. Chen to be reinducted into the system, for which Mr. Chen may be invited to Denver for a period of three months, get him acquainted with process there and together chart out a strategy for China. This exercise will bring a shared understanding among all regarding the market strategy in China. Second she needs to make a clear strategy with regard to the conflict of standardization vs. personalization of services at the outlets. Third, the uniformity and reconciliation of the accounting practices in the places of operation need to be decided.
