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Case Study: Levendary Café – The China Challenge
Question 1: The appropriate expansion path
From the case study, Mia Foster, the CEO of Levendary Café strongly believes in the standardisation of a brand, making sure that there are no differences in the offering of the product. Out of the 23 Levendary cafés that Chen had opened in China, only two very closely typified the company brand as it was known in the USA the country of origin. According to Chen, the other cafés were meant to suit location requirements. However, Foster was aware the McDonalds brand had not been altered even as it expanded into China—it was only slightly modified to include rice porridge in the breakfast menus. Denny’s Japan on the other hand had altered its entire menu to meet local requirements, when Denny’s, an American restaurant company, entered the Japanese market—and by doing that it attained great success.
(a) Critically review the success stories of McDonalds and Denny’s in China and Japan respectively (350 words).
(b) Discuss the pros and cons of standardisation of business operations for multinational corporations offering a brand in multiple locations across the globe (350 words).
(c) After a review of these factors make a recommendation on what Foster should adopt as a strategic thrust to make an impact on the Chinese market (100 words).
Question 2: Qualities of a good global manager
While Foster sees the potential of the Levendary brand in the Chinese market, she seems to have doubts about Chen as the right person for the job. She views him as a go-getter who has become a local baron, but who lacks the qualities of a professional manager. It seems the few weeks he spent in Denver, USA when he was hired were far from being sufficient to imbue him with the managerial talent necessary to oversee a successful establishment of the Levendary Café brand in China.
(a) From the information you have gleaned from the Contemporary Issues in International Management Unit together with information from additional research, discuss the qualities that should be possessed by a good global manager (400 words).
(b) Are there some characteristics which are possessed by Chen that are needed to successfully navigate the Chinese business environment? (150 words)
(c) Do you think Foster herself as the CEO of the Levendary group is able to steer the development or grooming of an international manager given that she herself lacks international management experience, since her management skills were acquired principally
Semester 1, 2015 (JD’C)
2 Contemporary Issues in International Management BUSM3229
from working within the domestic environment (150 words).
Question 3: Involvement of head office
(a) There has been a reasonable debate in international management circles about the role of headquarters (HQ) in the operations of foreign subsidiaries. Critically discuss the role that HQ should play in managing external company operations (300 words).
(b) To what extent should management of these external entities be given freedom to steer strategic and operational mandates? (250 words).
(c) If possible, provide and discuss an example of a foreign subsidiary of a firm that has benefited tremendously from direct HQ involvement, and a second example where a laissez faire-like approach was the best route to follow (200 words).
Question 4: Expansion through joint ventures
(a) Expansion in international markets has in a number of cases taken the form joint ventures. As a matter of fact, Howard Leventhal, the original owner of the group, had initially entertained the idea of entering into such an arrangement. Review the Chinese restaurant market in view of the business of Leventhal and discuss the extent to which a joint venture would be successful (400 words).
(b) Discuss some of the factors that have made some international joint ventures unsuccessful (350 words).
Material which could be used for the case study:
 Baruch, Y 2002, ‘No such thing as a global manager’, Business Horizons, 45(1), pp. 36–42.
 Haas, H and Nüesch, S 2012, ‘Are multinational teams more successful?’, The International Journal of Human Resource Management, 23(15), pp 3105–3113.
 Schlevogt 2000, ‘Doing business in China II: Investing and managing in China – how to dance with the dragon’, Thunderbird International Business Review, 42(2), pp 201–226.
 Paul, H 2000, ‘Creating a global mindset’, Thunderbird International Business Review, 42(2), pp 187–200.