Case Brief | “levendary Café”

1. Case brief | “Levendary Café”

Question 1. What is your evaluation of how Levendary Café has entered the China market?

Howard Leventhal, the departing CEO of Levendary Café, had considered entering China market in a joint venture with an established Chinese operator but after Leventhal met Louis Chen that idea vanished. Louis Chen was an entrepreneurial Stanford MBA student that was seen by Leventhal has a younger version of himself and he gave Chen the freedom to run in China the Levendary Café.

The main issue about the entrance in the Chinese market is that the base concept of the Levendary Café was no the original with the aggravating factor that there is no connection between the several restaurants in the Chinese market.

The key factor that I think that the Chinese people will not identify themselves with the business is that there is no guiding line between restaurants. They are all different, with different food and services and this might create confusion in the customer.

Chen had no back up from Denver and that made all the process very chaotic and it will have impacts in the long term.

Question 2. Beyond her meeting with Chen, what changes (if any) should Foster make in how headquarters manages the China subsidiary? If changes are recommended, should they be formal (structure) or informal (process)? Be specific.

Foster needs to evaluate and organize the whole China market, after the meeting with Chen. Chen had proven, with results, that has an effective knowledge about the Chinese market, and has the capacity to lead a venture in China. But is very important to know how to organize and capitalize Chen´s knowledge and capabilities into a way that the company can achieve the best results.

As all business need some control, the Chinese operations needs that too. Reports must be done and sent to the board, monthly and it’s crucial to have meetings to discuss the results and some new ideas.