LEVENDARY CAFÉ

The restaurant and food contract industry is a booming business at a global level. As such, various industry players are doing their best to get their teeth sank into the business in order to rip the maximum profit from the multi trillion dollar industry. Levendary Café is one such business and it trying to make its business more profitable from the current status which is also doing well. From its foundations, Levendary Café has had visionary leadership and skills that have quickly and steadily brought it to consist of 3500 restaurants (Bartlett, 2013). The fact that it vegan a simple Denver soup salad and sandwich restaurant to a full restaurant shows how much work has been put into it.

Change in leadership in an organization always brings up resistance and challenges in many organizations. For Levendary Café, change in leadership has not brought difficulties in neither structural management nor business performance but the stock market performance. A lot of skepticisms have emerged from Wall Street in regards to the recent entry of Levendary Café in china as an emerging new market. The variations from the original Levendary structure in the new and fast growing Chinese market has instilled fear of failure as the trend had already been set by other big industry players such as McDonald’s. As such, Mia foster, the 47 year old energetic and experienced new CEO for Levendary has to step in and face the challenge head on (Bartlett, 2013). The sooner she solves the issues arising and the skepticism experienced, the faster growth and development will be experienced in the new market.

Legendry’s entry into china was fast well timed but not properly planned. First the reason behind the entry into china by Levendary management was based on the fact that local growth within the US market had reached diminishing point. This is because Levendary Café had dominated all the cities while entry into the no city areas was faced by difficulties. This necessitated the need to venture into foreign markets for the purposes of increasing growth. Howard Leventhal, the founder and departing CEO of Levendary Café did not have any experience dealing with the international markets. As such, the only international presence the company had was in Dubai (Bartlett, 2013). This business deal was experimental licensing and was handled by Howard’s old friend. The venture being handled by a Saudi Arabian restaurant was profitable for the business and showed development.

The diminishing growth in the US market led to venturing into new potential markets and where else than china? With a massive population of 1.4 billion people and over 14.5% GDP growth rate recorded for the last decade, china is an economic powerhouse. The main attractive feature for restaurant business in this country is the fact that the urban population was quickly growing. By the year 2009, the urban population had grown to 46.6% from 36.2% in the year 2000 (Bartlett, 2013). The rise of an affluent middle class and the adoption of a large number of women into the workforce generated an impressive eat out culture that is perfect for the restaurant business.

China was the perfect choice for expansion based on crucial statistics. However, Howard the founder of the company did not follow the due process to enter into this new market. The first mistake that was made was the lack of a formal structure for the operations in china. There was no team that was dedicated handling the China business. As a result, the decisions made were not very well informed. Secondly, the person who was picked for the china operations was not very ideal. There was no competitive selection of the candidate. Lois Chen, the individual who was chosen to handle Chinas operation had schemed his way into the position. He had heard about the interest that Levendary Café had in china and thus made a name for himself. This energy and entrepreneurial spirit reminded Howard of himself when he was younger and aspiring to make it in life (Bartlett, 2013). As such he was chosen. Chen was given liberty to freely run the china operation with little supervision. He only had one task in mind from the then CEO Howard, to create a tough market position as a base for franchising outlets throughout China and to do it right. There was an informal contract for Chen that would last two years. The other mistake that was made by the Levendary Café management was not having proper planning monitoring and evaluation systems in place for the Chin operations. As such, implementation of policies was done haphazardly.

It is now upon Mia Foster as the new CEO to make changes that will mitigate the impact of the above mentioned mistakes in Wall Street and the operations I china. The first step is to take a complete audit of the operations in China. This will give the company the exact position of the operations. As Steel had conducted a 10 day evaluation, there was need for another independent evaluation to ensure that the situation was true as explained by steel. After this, the next step is to make changes in the management and leadership of Levendary Café China. This is by competitively selecting evaluating and training all the members of staff that are working and will be working in China. A good workforce is critical to the success of any business and the workforce in china has to be put in order.

Lois Chen has been of critical importance in the Chinese business for Levendary Café. He is an asset based on his aggressive and ambitious nature. The fact that he has adequate connections in China and is familiar with the culture of the people enabled him to start, develop and grow 23 new restaurants in just over one year. This is a person who should be maintained in the team. However, his arrogance pessimism and lack of respect to procedures has to be contained. Foster should ensure that Chen is answerable to the relevant people. There must also be a formal contract which clearly and elaborately stipulates the job description for not only Chen but all the other employees in Levendary Café China. The role that Denver plays in the business must also be made clear so that there are no conflicts in the operations of the business.

After setting up the structure and rules for operations in China, Foster must formulate a specific department from the headquarters that will be responsible for overseeing the operations of all foreign investments of the business. This department should cover all the global operations not just china. The department will be responsible for planning and strategizing the entry into a new foreign market, overseeing the implementation of plans and strategies for these markets and finally monitoring the operations in the newly set up markets. Some of the duties that are conducted in the headquarters such as marketing, food and operations can be devolved to the regional offices for efficiency. This will be effective in term of customizing the operation of specific restaurants to the locality for instance the development of the menus depending with the culture of the people. However, central operation must be maintained at the headquarters for the purposes of overseeing the operations and ensuring that the Levendary standards of quality and style is maintained in all aspects including food, buildings, furniture and services offered.

During the meeting with Chen, Foster should have the following agenda in place. First, to discuss the terms and conditions of Chen’s contract. This will involve what he is supposed to do and how he is supposed to do it. There should also be discussions on the role of Denver in Levendary Café China business. The status of the 23 restaurants in China must also be discussed. In this discussion, the standards that are expected by Levendary should be outlined. Chen should also give his proposals thus coming up with a proper strategy on how to make the necessary changes to monitor and anticipate growth. New potential location for the growth of Levendary Café China must also be discussed and how best to implement a strategy for this growth.

Change in leadership and management has always been a challenge. There are always conflicts involved in the implementation process. However, it is the role of the management to ensure that there is smooth transition that will enable the growth of the business. As the CEO, Foster is supposed to play this role. Working well with all the employees and coming up with ambitious but achievable goals and strategies will ensure that there is continued growth and development in the Levendary Café China business.

Reference

BARTLETT C., 2013. Levendary Café: The China Challenge. Boston. Harvard Business Publishing.