Concerns about Running of the Levendary Cafe in China - Case Study Example

The concerns/ worries of Mia Foster included: Wall Street’s opinion that her lack of international business management skills would affect the running of the Cafe on an international scene – China; unwillingness by the CEO of Levendary Cafe - Louis Chen to follow the proper planning and financial reporting process of the company.

Lucien Leclerc:
The roles and responsibilities of Lucien Leclerc included: Management of the food development group as well as the marketing team. The concerns of Lucien Leclerc were to ensure that the foods served in the restaurant were healthy and wholesome to their customers at all times.

Louis Chen:
The roles and responsibilities of Louis Chen include: Ensuring the continuous running of the Levendary Cafe in China; making strategic decisions that would enable the company to stay competitive and in business against market trends.

The concerns/ worries of Louis Chen included: Mia Foster’s claim to change the current planning and reporting process of the company.

2. Why did the company expand from the USA to China? How did they choose to expand? (What was the way they entered China?)
The company expanded from the USA to China the reason that its domestic growth was slowing down progressively from 2008. The company chose to expand by setting up a strategy team that would be used to research available opportunities in China. More to that was the fact that China had a high potential for investment since their GDP was 14.5% for the past decade and they had a high population of approximately 1.4 billion people. Out of this, the urban population had risen from 36.2% to 46.6% between 2000 and 2009.

3. The case describes several major issues that need to be decided about Levendary Cafe in China:
a) Decision about global standardization vs. local adaptation to the China Market
This was an issue that was discovered and brought about by Mia Foster to the Levendary Cafe CEO in China - Louis Chen. The issue was that Louis Chen was not willing to ensure and implement global standardization of procedures.
 
b) Authority of who is in charge in China
This was an issue that was projected by Mia Foster to Louis Chen. According to Mia Foster, the CEO of Levendary Cafe in China – Louis Chen was not up to the task of implementing changes that would boost future operations of the organization.

c) GAAP/ Financial Reporting issues
Louis Chen did not follow the standard GAAP Accounts and reporting procedures for Levendary Cafe in China. Apparently, the financial and management reports that were being sent to Denver were in a format that had been “massaged”.

d) The future of Louis Chen with the company
This was an issue where Mia Foster implied that the way Louis Chen managed the China operations would not sustain the company in the future. For example, his refusal to follow a standardized global operating procedure; not adhere to GAAP accounting standards.

4. What were the a) Revenue (Sales) and b) Profits (Income) for the company worldwide in 2010? What about in China only? (see exhibits 2/4)
The worldwide revenue (sales) for the company in 2010 was: $9,248,134.
The worldwide profit (net income) for the company in 2010 was: $780,563.
The China revenue (sales) for the company in 2010 were: $3,261,598.
The China profit (net income) for the company in 2010 was: $-143,620.

5. Mia Foster is traveling to China for a meeting with Louis Chen. What are the three different courses of action/options she has for addressing the challenges the company currently faces?
In order to address the challenges being faced in China operations, Mia Foster has to follow the following actions: Raise the questions about the China operations to Louis Chen; confront Louis Chen on the issues raised; decide what is next for the future of China operations. Read More