What is your evaluation of the way Levendary Cafe has entered the China market?
The entrance of china was more opportunistic expansion rather than strategic. The huge population of 1.4 billion people and annual GDP growth of 14.5% over the past decade, China’s urban population rise from 36.2% of the total in 2000 to 46.6% in 2009, and the strong middle class whose per capital income surged from RMB 6,282 to RMB 17,175 (In 2010, RMB 1 = USD 0.15.) all made china as great opportunity for the restaurant that was facing a mature market that had a growth of merely 1%. Another attractive factor of china market was the success of many American restaurants such as KFC, McDonald’s and Pizza Hut’s. However …show more content…
They have to give the needed support to have the financial reports in accordance with GAAP and to give the training if needed for the staff in China. Question 3:
Prepare a specific action program for Foster to her deal with the need for continued growth in China. What should be on the agenda for her meeting with Chen?
What should be on the agenda is:
1. The marketing strategy: Foster should discuss a plan to deliver a clear, consistent, and compelling message about Levendary café and create both physical and perceptual differences that can be perceived by consumer in China that is consistent with the corporate strategy of the mother company. Chen should be part of this to have commitment and responsibility to it and due to his experience in the Chinese market.
2. The financial reports style: Foster should force Levendary China to follow the mother company's reporting style and show that any deviation is not acceptable. China's finance team & Chen are responsible for that and headquarters are responsible for providing any needed support or training.
3. The cost and revenue: : a specialized team should invistigate why the composition of expenses of China operations is quite different than U.S.