HI5013 Analysis of Case Study of Lavendery Cafe Along with Challenges in China Assessment Answer

MANAGING ACROSS BORDERS

Executive Summary 

The present report carried out an analysis of the case study of Lavendery Cafe with respect to the challenges encountered in China.  It is found that the Cafe constantly expanded in China but it lost its store appearances and store normalisations within the country. The report evaluated that one of the major issue with the Cafe in China is that while bringing structural changes by the vice president no consultation was made it its CEO Mia Foster. As a result, the current management operations were corrupted and lowered the financial abilities. Further, the efficiency in the food services got declined thereby reducing their profitability. Based on the issues identified in the report, some recommendations are offered and this included innovative communication strategy, deployment of cooperating business strategy, stakeholder management and undertaking effective decisions. Finally, suitable justifications are provided.  

Introduction

Ineffective organisational structure and management decision making is not beneficial for any type of business in the international market. In some cases, the management focuses on conducting the managerial activities in a proper manner, this is needed to be analysed that all business partners are all supporting the same business decisions. Otherwise, the business activities of the organisations will be completely disrupted and the target of business cannot be achieved within the mentioned time frame. In the current study, the same case for Levendary Café is recognised: Levendary Café CEO had a different international business plan regarding their services. However, the business plan was neglected by the Chinese business partners which increased a massive international issue. Due to this issue, the food services related activities were not provided effectively by Levendary Café in the past years. The present study will clearly describe the issue in the case study and analyse based on relevant data. 

Description of the case study

Levendary Café has opened its new stores in the Chinese market for attracting a high number of customers passed on the country's population rate. The CEO of Levendary Café has focused on opening up stores in 23 new areas in China inside a year heavily influenced by Louis Chen, Vice President of Chinese Operations. As Levendary Café experienced fast extension in China, the Chinese café started to lose their normalizations in both menu and store appearance (Bartlett and Han, 2011). A portion of their Chinese areas offers little to none of the standard Levendary menu things, which is the thing that separates Levendary in the unpremeditated and quick café fragment. For instance, Levendary Café gives healthy soups, plates of mixed vegetables, and sandwiches, however,other Chinese café offers no servings of mixed greens or their celebrated cheddar soup and have rather supplanted them with dumplings and a Thai veggie soup. According to Bartlett and Hann (2011), the restaurant appearance has also endured and is inadequate in normalization. In a few areas, there is no seating simply counter space and in different areas, the common exemplary wooden surrounded upholstered seats in their cafe, which give the best visual feeling supplanted with modest plastic seats.  

The absence of standardization in both menu and bistro appearance is making them endure in separation, in light of the fact that by fitting in with serving nourishments ordinarily eaten in China, they are turning into the same than whatever other local Chinese cafés that serve dumplings. Besides, the absence of consistency in caféentrance notwithstandingthe menu variety is influencing their marking and what their clients have generally expected from Levendary Café as far as food and solace. Levendary Café is separate from the opposition in the fast causal eatery fragment due to the healthy food they offer in agreeable environmental factors which fortifies their American image picture and bid. As per the opinions of Asmussen, Foss and Nell (2019), in spite of the fact that normalization is imperative to marking and picture, some customization in the menu is alluring to meet contrasts in territorial tastes, for example, the U.S. Upper east's adoration for turkey and cheddar. Customization additionally empowers client support by fitting the menu to the clients, and in China, it tends to be fruitful if Levendary Café's way of thinking of healthiness is kept up. 

The venture into China has been exclusively by organization claimed and worked café as opposed to development through diversifying, which speak to 66% of the U.S. café. The advantages of diversifying are the information available that the franchisee has while the organization can control picture through normalization by upholding brand and working principles in the diversified stores. The absence of diversifying has been an issue as the Chinese activity is controlled completely by one individual, Chen, with practically no responsibility to the U.S. activities. Moreover, Chen before joining Levendary had no café experience rather his experience was insufficient. His land information was an advantage to Levendary as far as getting prime areas in China at sensible costs. 

Apart from this part, his absence of café and diversifying experience and absence of comprehension of marking and picture is unfavourable to the accomplishment of the restaurants in China. His inability is exacerbated that he is working alone with incredible scope without help from organization central command or appropriate responsibility to them. Finally, there is the issue of money related to announcing that puts the organization in danger (Djankov and Miner, 2016). Chen isnot holding fast to GAAP and his budgetary outcomes may not be precise or equivalent to U.S. tasks. Rebelliousness to GAAP may also introduce administrative issues for the traded on an open market organization, potentially affecting offer worth.

Identification of the main issue

In relation to the above case study description, this has been clearly understood that the CEO of Levendary Café Mia Foster has implemented an effective managerial strategy and operational tactics for generating high financial benefits in the Chinese market. However, in the opinions of Bartlett and Han (2011), the Vice President of Chinese operation has focused on changing the current organisational structure and the managerial activities of Levendary Café without consulting with Mia Foster. This has corrupted their current management operations of Levendary Café. Along with that, the financial capabilities of Levendary Café have decreased constantly. This is important for Vice President Chen to consult with the management or CEO before changing the operations and organisational structure of Levendary Café. Due to the change, the efficiency of food services and quality of services of Levendary Café reduced in the recent year. This has allowed the rival Chinese restaurants and café to generate high revenue compare to Levendary Café and take advantage of this café. Therefore, the management of Levendary Café cannot collect a massive amount of revenue per year from the Chinese market. It will corrupt the current market position of Levendary Café in China.

Vice President Louis Chen has changed the managerial and organisational structure of Levendary Café intentionally (Morrison, 2018). Due to the rapid growth of this café, the Chinese government has faced risks as the local company sales were reducing. This has forced the government to take immediate action and corrupt the current organisational structure of Levendary Café. As a result, the management cannot gain a competitive advantage in the upcoming times. Therefore, the main issues as follows:

i) Lack of cooperation between the US branch and Chinese branch which allowed Chen to take advantage of the current situation.

ii) Massive communication gap which has been recognised due to the distance between the United States and China. Due to the communication gap, CEO Mia Foster was not capable of recognising the change of management procedure which was conducted over a year.

iii) The Chinese business partners were not on the same page with the US management. Therefore, when the organisational operations changed, they did not take any actions to increase the profitability of Levendary Café. Along with that, the business partners and other stakeholders did not inform the CEO regarding the change in management. 

iv) Ineffective corporate decision making that has reduced their capabilities to take appropriate action during the crisis situation (Ketteret al. 2016). On that basis, the management related activities cannot be conducted properly per year. 

Based on the above mentioned issues, the capabilities of the organisation have mitigated. The CEO of Levendary Café was concerned that the change in the Chinese market will increase a management issue in the United States market also. In case the customers of United States travel on China and visit the store of Levendary Café, they will recognise the poor management activities and ineffective service providing. In case this situation is recognised, the customer can report this situation to the population of the United States (Mattli, 2018). This will reduce the financial capabilities of Levendary Café in the United States also. Similarly, a negative market reputation will generate in the United States in future. As a result, the US financial revenue per year will decrease for the company in the upcoming years.

Determine an alternative course of action for Levendary Café

After evaluating the case study of Levendary Café and analysing the key issues, this is clear that the current management strategy is not effective enough to conduct the business activities in a proper manner. The management needs to focus on taking relevant action which can force the government of China not to change the current managerial strategy. Therefore, the financial activities could be conducted in a proper manner in the future. However, an alternative course of action could be extremely beneficial for Levendary Café (Lo, 2016). This has been clearly understood that the alternative course of action can help the business in evaluating the management requirements and achieving the requirements. The alternative course of action of Levendary Café is clearly described beneath:

a. Innovative communication strategy:In respect to the above discussion, this has clearly identified that the communication strategy of Levendary Café was not effective enough to conduct the business task in a proper manner. This is extremely important for the management to evaluate and identify the needs regarding communication. Innovative communication tools can assist the management to receive proper guidance regarding the managerial activities in the future years. Therefore, in case of this situation, if the managerial operations are changing, proper guidance or course of action could be told by the US headquarters to the China branch. However, ineffective communication can increase a massive business gap in the management which cannot be solved by the organisation. Similarly, if new and innovative communication network is not implemented in the organisation, the current business demands of the main stakeholders such as CEO, investors and board of director cannot be evaluated (Zhanget al. 2018). On the other side, this course of action is a realistic process which will help to understand the current crisis situation and collect proper solution from experienced people. 

b. Implementation of cooperating business strategy: The cooperation of Levendary Café was not effective enough in the past years which has failed to identify the current risks regarding the change in the organisational structure. In case a proper cooperation strategy was implemented, a set of managerial tasks could be presented to each leader and employee in the Chinese market. The set of managerial task would clearly describe following the current organisational process and governance structure until verbal confirmation from the CEO or the board of directors. Based on the verbal confirmation, they would be capable of changing the managerial process and operation based on the instruction of the Chief Executive Officer (Wanget al. 2019). However, due to the lack of cooperating business strategy, any business partner or government leader can change the business activities and organisational structure without consulting with the management. This same situation is recognised in the current case study which is extremely risky for Levendary Café as managerial activities cannot be completed. 

c. Effective stakeholder management: Stakeholder management can be recognised as an alternative course of action in this case. Due to the stakeholder management process, the CEO or the board of directors is forced to evaluate and identify the requirement of its Chinese stakeholders. This could help to capture the demand of the Chinese stakeholders so that the management related activities can be completed within a short period of time. However, in the opinions of Sumaila, Bellmann and Tipping(2016), ineffective stakeholder management cannot be highly beneficial as the professional business relationship of the customers can be corrupted completely. In this manner, this is stated that the stakeholder management process is a realistic alternative course of action that can be taken into consideration by the management to generate high benefits. In respect to the current course of action, the stakeholders of the Chinese branch could protest regarding the forceful change in the organisational strategy and managerial operations. Hence, the financial risks in the Chinese branch can be easily avoided. 

d. Evaluation of business situation and effective decision making: The decision making process of the organisation is needed to be evaluated and improved in a constant manner. Without focusing on the decision making process, uncertain and significant risks like this cannot be solved by the management. This will increase the financial risks in an effective way in the future years. However, according to Albertoni (2018), considering a proper business decision needs innovative and efficient evaluation strategy. The management could focus on evaluating the current business situation regarding the business challenge. After that, the most suitable technique can be selected which may stabilise the risks and improve profitability rate. Therefore, this is clear that the decision making strategy is a relevant course of action. 

Justification of each course of action

In the above section, all the alternative course of strategy has clearly mentioned. Based on all four alternative courses of strategies, it can be assumed that the management of Levendary Café can easily be capable of generating high monetary benefits in a short amount of time. On that basis, the current issues which have recognised in China can be resolved and the management will be capable of taking extreme measure so that this situation is not created in the future. Each alternative course of strategy is realistic and justified. The justification for each strategy is clearly described below:

i)Justification ofInnovative communication strategy:This is critical for the administration to assess and distinguish the necessities in regards to communicating network. As per the views of Geri and McNabb(2016), imaginative specialized instruments can help the administration to get appropriate direction with respect to the administrative exercises later on years. Along these lines, if there should arise an occurrence of this circumstance, if the administrative activities are changing, legitimate direction or business plan could be advised by the US home office to the China branch. In addition to that, insufficient correspondence can build a gigantic business hole in the administration which cannot be settled by the association. Additionally, assuming new and creative correspondence arrange is not actualized in the association, the present business requests of the principal partners, for example, CEO, speculators and leading body of chief cannot be assessed. On the opposite side, this course of action is a practical procedure which will assist with understanding the present emergency circumstance and gather legitimate arrangement from experienced individuals. 

ii)Justification of Implementation of cooperating business strategy:On the off chance that a legitimate collaboration methodology was actualized, a lot of administrative activities could be introduced to every pioneer and representative in the Chinese market. The arrangement of administrative errand would plainly depict to follow the current hierarchical procedure and administration structure until verbal assertion from the CEO or the governing body. As per the views of Parenteau and Cao(2016), in light of the verbal assertion, they would be fit for changing the administrative procedure and activity dependent on the guidance of Chief Executive Officer. In addition to that, because of the absence of participating business methodology, any colleague or government pioneer can change the business exercises and hierarchical structure without talking with the administration. This equivalent circumstance is perceived in the present contextual investigation which is very dangerous for Levendary Café as administrative exercises cannot be finished.

iii)Justification of Effective stakeholder management: Stakeholder management process can be perceived as the elective strategy in this case. Due to the Stakeholder management procedure, the CEO or the governing body is compelled to assess and recognise the prerequisite of its Chinese partners. This could assist with catching the interest of the Chinese partners so the administration related exercises can be finished inside a brief timeframe. In any case, ineffectual partner the board cannot be profoundly advantageous as the expert business relationship of the clients can be disrupted (Crowley, 2018). As such, this is expressed that the partner the executive procedure is a practical elective strategy that can be taken in thought by the administration to produce high advantages. In regard to the present business plan, the partners of the Chinese branch could fight with respect to the intense change in the authoritative methodology and administrative activities. Henceforth, the budgetary dangers in the Chinese branch can be handily maintained a strategic distance from.

iv)Justification of Evaluation of business situation and effective decision making: The business dynamic procedure of the association have been assessed and improved in a steady way for improving the decision making process. Without concentrating on business decision making and procedure, questionable and noteworthy risks like this cannot be fathomed by the administration. As opined by Asante(2016), this will build the budgetary dangers in a successful manner later on years. In any case, considering a legitimate business choice needs inventive and proficient assessment system. The administration could concentrate on assessing the present business circumstance with respect to the business challenge. From that point onward, the most appropriate procedure can be chosen which may settle the dangers and improve gainfulness rate. Consequently, this is certain that the dynamic technique is a pertinent strategy.

Recommendation

After having the above discussion, the following recommendation can be given for avoiding future crisis situation like this:

i) The management needs to develop a proper governance structure that clearly mentions all the managerial activities. In respect to this governance structure, the employees will be forced to conduct their activities without changing any managerial process.

ii) Effective communication techniques such as voice calling, video calling, social media communication are needed to be implemented. 

Conclusion

It can be concluded that the CEO of Levendary Café Mia Foster has implemented an effective managerial strategy and operational tactics for generating high financial benefits in the Chinese market. However, the Vice President of Chinese operation has focused on changing the current organisational structure and the managerial activities of Levendary Café without consulting with Mia Foster. This has corrupted their current management operations of Levendary Café. Vice President Louis Chen has changed the managerial and organisational structure of Levendary Café intentionally. Due to the rapid growth of this café, the Chinese government has faced risks as the local company sales were reducing. Along with that, this is extremely important for the management to evaluate and identify the needs regarding communication.