Levendary Caf

Powerful Essays
Topics: Revenue, China, Deloitte
Levendary Café: China Challenge
Levendary Café faced some successes and many challenges when penetrating the Chinese Market for their first time. The goal of this case study is to understand what kind of initial strategies did they adopted and the main problems that arouse as a result of their decisions. The analysis will point out the main issues faced by the organization as well as potential alternatives that could be used to address their concerns. Finally, an optimal solution will be proposed in order to resolve the situation in which Levendary Café is involved.
Levendary’s first steps and industry analysis
Although Levendary Café’s decision of entering Chinese market faced some tough challenges, the organization also took some good steps. First of all, the decision of entering China as the target market was a good decision. According to a report by IBIS World, “this industry revenue grew by 3.4% to $190.2 billion in 2011 and 2.6% to $195.2 billion in 2012. Industry revenue growth will level off as growth rates approach historical levels and the industry is forced to contend with the market saturation issues it has grappled with over the last 10 years.” (Zwolak, April 2010). Since the American market was already saturated, Chinese market offered an attractive alternative of expansion for Levendary Cafe. China was a market of 1.4 billion people where economic growth was around 14.5% and where growing middle-class citizens, who demonstrated a positive acceptance of quick service restaurants, had a larger disposable income.
The original idea of looking for foreign ventures proved also the good performance of the Business Research and Development department, which was taking the correct steps to enter this market. Apart from this, the previous experience of other companies such as KFC or McDonalds was a good example of U.S. Corporations able to attract a significant amount of customers and handle the existing competition in the market. The restaurant industry in



Cited: Deloitte. (2014). Taxation and Investment in China. Reach, Relevance and Reliability. Deloitte Touche Tohmatsu Ltd. Zwolak, R. (April 2010). Fast-food fallout: Health-conscious and cash consumers serve as an industry challenge. IBIS World Inc.

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