Week 3 case analysis – levendary café : the china challenge Q1: What changes does Foster need to make about Chen?
According to the case, Mia Foster, a first time CEO with no international management experience; and Louis Chen, an experience manager in China subsidiary company. This meeting has a significant influence with the development of Levendary café in the China market. However, it is not going well. This meeting lead to Chen who has a resistance and negative attitude. Chen did some incorrect work indeed. For example, the Chinese subsidiary submitted all management and financial reports to U.S. headquarter was not following GAAP. Therefore, as U.S. CEO, Foster could ask Chen to submit formalizing financial report, but not to interference too much. Firstly, Chinese market is totally different with the U.S. market; they have a different system and customers, Chen needs to seek for a suitable way to attract consumers. Secondly, Chen is an experience manager in Chinese market, Foster need to give Chen sufficient time and have a confident in Chen.
Q2: What does it take to succeed in the restaurant franchising business? As a CEO of headquarter, he should have a clear understanding about the difference in the different region. He should encourage managers of subsidiary companies and not to interference too much. In fact, the national political difference is existing and headquarter have to adapt the political system, rule of laws and political risk. The restaurant franchising business would get more value if they have an effective and different management for different regions.
Q3: Propose a specific action program for Forster for continued growth in china. Lessons learnt? As well-known, China is a bigger market compared with Japan, Australia and U.S. Because of the population, China has a large consumption. Due to the national political differences, Forster should contribute a new effective and different management system for different areas...
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