Marci B Copeland
Cultural Environment Intl Business
Marketing 3852-001
June 21, 2015
Case Analysis Questions
Levendary Café Questions:
1.
What is your evaluation of the way Levendary Café has entered the China market?
My evaluation of the way Levendary Café entered the China market, is Chen focused more on
obtaining the highest amount of profit while sacrificing the image of the Levendary franchise. Before
entering the China market a detailed strategic business plan to incorporate the established values from
the Levendary brand with the cultural differences in the multiple regions of China in which Levendary
wishes to expand. Since many of the regions may vary significantly within China, management style,
area food tastes, as well café atmosphere must be reviewed. To be successful, Levendary can’t simple
standardize the product, promotion, pricing, and distribution of the franchise must adapt to the markets
in China in which it will be serving.
2.
What does it take to succeed in the restaurant franchising business?
To be successful in the restaurant franchising business, typically restaurant appearance, food
offerings, quality, service, ingredients, standards, values, and management are very similar from one
location to another. Customers visiting one location know what to expect in all other locations they
visit. Franchises will incorporate food items that are local favorites, while still maintaining the basic
menu items that they are usually known for. However, when a business franchise expands
internationally, to succeed with the multi-cultural and diverse populations, often changes must be made
to other items that may be considered the franchise standard. Different cultures have different beliefs
in management styles. Cultures can equate a price on a product as cheap or expensive, therefore price
must be reviewed carefully when entering a new market that has a different value system. Expanding
internationally, promotion must also be looked at carefully. A slogan may not be automatically
translated and maintain the same meaning in both languages. It’s important to realize the differences
between being an individualism versus collectivism culture as well as equality versus hierarchy, as well
as change fearing versus change embracing as well as how time is viewed in looking at Levendary doing
business in the US and the culture it will be serving by expanding internationally into China and the
major differences that may exist. All parts of the marketing mix must be reviewed when expanding
internationally.
3.
What changes (if any) should Mia Foster make? Specifically, what should she do about Louis
Chen? And what changes (if any) would you propose at headquarters?
Changes that Mia Foster should make would be to work with Louis Chen in creating a strategic
plan for the expansion of Levendary Café into the China market. Mia should work with Louis to learn
more about the regions Levendary has expanded to why he made the decisions he made for each of the
areas in which the 23 franchises are located. Mia should do her own research to find out what café
atmosphere is welcome in each location, as well as the food taste of each location. Also, Mia should
determine, as noted above, the cultural differences between the regions being served in China and the
US culture. Mia should also look at food items that may be considered offensive that are on the current
menu, slogans used by the business that will not translate well, and any other factors that may be
against what the culture values. Mia should research the expansion of similar quick casual restaurants
that have expanded into the different regions of the Chinese market and what adaptations were
required for the brand to be successful and review what potential may need to be made for Levendary
to be successful as it expands.
After reviewing all of the information, Mia should incorporate changes at corporate
headquarters that will include taking into account international expansion and the need for adaption
into other cultures. This may include changes to management style, café atmosphere, pricing,
promotion, café offerings, café location as well as all factors to allow the franchise to succeed
internationally. The organizational structure should change in all areas, including concept, marketing,
food, operations, business development and administrative staff groups. This change would include the
creation of an international division with a representative from each of these groups. These areas
should begin to include partnerships with individuals and companies in China to incorporate the current
tastes and items acceptable in the regions it has already expanded into and the areas it plans to expand
into. These partnerships can help with negotiations to create a finished organizational structure that
will incorporate US culture and China culture to allow for success in both countries. The current
structure is focused entirely on US operations, to allow expansion, the focus must change. Partnerships
with individuals and businesses within China should be created. These partnerships can help in the
proper setup and expansion of the Levendary Café franchise. Overall, the vision must change at
headquarters to include an international look at adapting to its surroundings for café atmosphere, café
food offerings, and management style, but still maintain quality, as well as the Levendary Brand.
4.
Prepare a specific action program for Foster to help her deal with the need for continued growth
in China? What should be on the agenda for her meeting with Chen?
The action plan that Mia should incorporate to allow for continued growth is to start forming
relationships with individuals and businesses in the regions in which Levendary plans to grow and the
newly established international division. Mia will create an international division with a China location
with representatives from concept, marketing, food, operations, and business development. These
individuals should have a close working relationship with headquarters as well as Louis Chen.
Louis will submit a strategic plan that will include information to support the strategic plan for
new locations. All approvals should go through the entire international division for all decisions for a
new location. Existing locations will be reviewed and revamped according to the international division
and input from the formed partnerships based on local adaptions as well as maintaining the quality and
brand of Levendary. No longer will decisions be made by one individual. Decisions including menu,
location, food offerings, management, promotion, pricing, etc. will be made at the international division
level. Since input will be from all areas and including individuals familiar with the local culture and
values, Levendary will have a greater chance of success as an international business while maintaining
the integrity it has built in the US at all levels including political, economic, social, etc. Also, a set
implementation schedule will be created by the international division to ensure proper test marketing,
research, and background has been completed prior to starting the creation of a new location. Creating
a more structured implementation for expanding into China will allow Levendary to maintain its quality
and brand but adapting to the local culture as needed while meeting established profit levels by
properly implementing and not short cutting the expansion of the Levendary franchise into China.
On the agenda will be a reminder of what the Levendary brand stands for and how this brand
will adapt to the regions it goes into in China, the brand itself will not be compromised. Mia will request
Chen provide research and market testing for the locations that he has already setup. Mia also will
request an analysis of the regions that Chen is expecting to expand into to assist Louis with the creation
of a standard strategic plan for these areas. Mia will inform Chen he will need to provide a strategic
plan for each franchise current and future before proceeding with additional locations. This strategic
plan will be reviewed by the newly formed international division to determine viability and support of
the plan. If the plan is not supported, Chen will need to review the recommendations of the
international division and make appropriate changes before proceeding. Chen will be required to
submit a strategic plan of the current locations that including the basis of the decisions made for those
locations. Chen will present this to the international division for review and proposal of what needs to
be changed to adhere to the quality and brand of Levendary. Mia’s agenda will include providing Chen
with an organizational chart of the international division and the proper flow of approvals for the
Levendary expansion into China. Mia will request Chen to attempt to setup meeting with local Chinese
business owners and individuals to allow for collaboration as the brand expands. When meeting with
Chen, Mia will emphasize that all international and US laws and regulations must be adhered to even if it
causes delays that may impact profit. Mia will also include on the agenda, what Levendary expects as it
expands into China and Chen’s responsibility in that expansion.