Multi-unit Restaurant Business and International Strategy: A Case Study of Levendary Café

This case study discusses the multi-unit restaurant business, international strategy, and cultural differences between USA and China using Levendary Café as an example. It covers topics such as franchising, market entry, Hofstede's dimensions of culture, and the challenges faced by the CEO, Mia Foster.

Running Head: MBA Assignment 0
MBA Assignment
9/11/2018

MBA Assignment 1
Introduction
Levendary Café was turned out from private parity proprietorship in January 2011, and the
subsequent month, Mia Foster was titled as its new Chief Executive Officer. The retiring
CEO, Howard Leventhal, was the adored creator of the widely held series of 3,500 cafés.
They had developed a Denver salad, soup, and sandwich restaurant into a $10 billion
industry, but after 32 years was affecting on to new benefits. In the following, an effort has
been made to discuss the Multi-unit Restaurant business, the international strategy and entry
mode used by the company, compare U.S.A and China culture, and key issues faced by Mia
Foster (Bonache and Noethen, 2014)
Q.1.What is a Multi-unit Restaurant Business. How giant is it? Is it a combined or fragmented
industry?
Ans. A multi-unit Restaurant Business is a notion of possessing more than one unit of a
franchise and presently being the franchise proprietor owning more than one unit or store. In
other words, operating more than one unit of the same industry is considered a MuR.
Usually, sovereign operators represent 70% of the business while the multi-unit operators are
the balance, which marks this small percentage by entities (Garg, Priem and Rasheed, 2013).
The food and beverage business is fragmented, which means no one retailer or top vendors
have a substantial market share, which the Multi-unit Restaurant Industry falls under creating
it fragmented as well.
China's GDP development of 14.5% over the past 10 years and the populace of 1.4 billion
individuals were perfect for spending in this nation alongside China's urban populace
growing from 36.2% to 46.6% in 9 years and a robust middle class developed whose per
capita revenue departed from $1,008 to $2,758 (Brown, 2015).
Q.2Which global strategy and entry mode has the business used. How did its US
establishment match compared to China market needs?
Ans. Franchising is the international strategy used by the company and an entry mode to enter
into the global market. As around two-thirds of Levendary 3,500 supplies were franchised,
help existing franchisees, and imposed brand and functioning standards in franchised stores
(Rahatullah and Raeside, 2018).

MBA Assignment 2
Levendary Café's culture was all about the customer. The original creator drilled the idea of
"delighting the consumer" into the staff. They supposed that if accommodations were
provided to the customer they would come next time. This was a hit with the white-collar
specialists and upper middle-class females, which come nearly five or six times a week.
Operations in the US were order accuracy and speed of service, which was identical, and
when orders were modified to accommodate the consumer, yet personalization was part of
the purpose they were profitable.
This need of branding they had in the US was alike to the requirements they have in China.
They had to adjust to what the consumers required in order to prosper their needs as they are
in the US. For example, the Chinese eat some dairy products so they had a need to restrain
their cheese soup and they were not aware of the turkey culture so they replaced chicken.
This type of necessity justifies the variations they made to their menus in numerous locations
and to the advent of the stores. It was all to provide accommodations to the customers in
China (Anderson and Sutherland, 2015).
Q.3 Using Hofstede’s Dimensions of Culture, Compare and discuss USA and China cultures
by relating to the market entry processes and impact on the corporate values.
Ans. Hofstede’s clarified the dimension of individualism, power distance, uncertainty
avoidance, and masculinity dimension which are founded on the corporate values that the
PDI of China is 80 while America is 40. The indicators show that inequality is satisfactory in
China; on the other hand, Americans are equal. China is enhanced than America in this
dimension. This can be attributed mainly to the Communist rule and traditions of loyalty,
esteem for age and superiority, and emphasis on harmony. Market entry is the amount to
which the less influential members of organizations and establishments within a nation
assume and admit the power, which is dispersed inequitably (Contractor et al., 2014).

MBA Assignment 3
(Hofstede, 2017)
In the individuality, China is concentrated on groups rather than individuals. America is a
country, which gives emphases highly on individuals. The nations with the maximum and
minimum individualism scores are the U.S. (91) and China with a score of (68) as it is much
lower than the U.S. Both the China and America are at a maximum score on masculinity, it
specifies that people in China and America pay much consideration to competition,
attainment, and success. China scored lesser on UAI than America as China may not
continuously place great importance on laws. On the other hand, Americans are very
particular about the rules and regulations (Koch et al., 2016).
(Beugelsdijk, Maseland and Van Hoorn, 2015)

MBA Assignment 4
Q.4 What are the main problems Mia Foster is facing and what would you recommend in
addressing these problems?
Ans. Mia is facing various issues, which are the reporting procedure from China back to the
US. This problem needs to be addressed to evade the risks of not prescribing the US
Generally Accepted Accounting Principles (GAAP). China's accounting principles are not as
severe as the United States. The Levendary Café is frequently US based which is a very
significant rule to adhere. They need to file complaint with the local tax regulations in China
or could face while it closed down. In order to put the precise framework in place to hand
over the monetary records to the format of the US would be a costly expense (Ostrom et al.,
2015).
Another issue Mia is facing was the adaptation. China requires adapting with the store design
and menu because, for a business, these issues should be taken into reflection before it
becomes successful in their market. China markets just adapt the essential changes to become
fruitful but Mia does not see them. Mia is just concentrated on keeping the operations
standard and dependable in the US market. Therefore, this, unfortunately, has not work in
China (Knudson‐Martin et al., 2015).
Conclusion
In conclusion, adhering to the future strategy would safeguard Foster’s confidentiality in
managing Chinese stores, and allow developing a workable advertising plan that pleases
everyone i.e. Wall Street and Foster. Such a method would safeguard success and better
adjustments for the Levendary Cafés in China. They should not participate in expanding into
China but focus on growing their industry in the United States. Mia should decide to
transform their standard processes and adjust to the cultures in China. They should endure the
expansion and with the appropriate controls and policies so that it will be profitable in the
future.

MBA Assignment 5
References
Anderson, J. and Sutherland, D. (2015) Entry mode and emerging market MNEs: An analysis
of Chinese greenfield and acquisition FDI in the United States. Research in International
Business and Finance, 35, pp.88-103.
Beugelsdijk, S., Maseland, R. and Van Hoorn, A. (2015) Are Scores on H ofstede's
Dimensions of National Culture Stable over Time? A Cohort Analysis. Global Strategy
Journal, 5(3), pp.223-240.
Bonache, J. and Noethen, D. (2014) The impact of individual performance on organizational
success and its implications for the management of expatriates. The International Journal of
Human Resource Management, 25(14), pp.1960-1977.
Brown, R.S. (2015) Franchising as a Collective Action Mechanism in Fragmented Industry
Structures. Journal of Managerial Issues, 27.
Contractor, F.J., Lahiri, S., Elango, B. and Kundu, S.K. (2014) Institutional, cultural and
industry related determinants of ownership choices in emerging market FDI
acquisitions. International Business Review, 23(5), pp.931-941.
Garg, V.K., Priem, R.L. and Rasheed, A.A. (2013) A theoretical explanation of the cost
advantages of multi-unit franchising. Journal of Marketing Channels, 20(1-2), pp.52-72.
Hofstede, G. (2017) China and the United states compared using Hofstede’s current
dimesions. [Online] Available from: https://geerthofstede.com/landing-page/ [Accessed
11/09/2018]
Knudson‐Martin, C., Huenergardt, D., Lafontant, K., Bishop, L., Schaepper, J. and Wells, M.
(2015) Competencies for addressing gender and power in couple therapy: A socio emotional
approach. Journal of Marital and Family Therapy, 41(2), pp.205-220.
Koch, P.T., Koch, B., Menon, T. and Shenkar, O. (2016) Cultural friction in leadership
beliefs and foreign-invested enterprise survival. Journal of International Business
Studies, 47(4), pp.453-470.

MBA Assignment 6
Ostrom, A.L., Parasuraman, A., Bowen, D.E., Patricio, L. and Voss, C.A. (2015) Service
research priorities in a rapidly changing context. Journal of Service Research, 18(2), pp.127-
159.
Rahatullah, M.K. and Raeside, R. (2018) Franchisee actions trigger franchisor power strategy
alterations. Journal for International Business and Entrepreneurship Development, 11(2),
pp.140-162.