The publicly traded brand in the US is known as Levendary café. Currently, the operations of the Café are expanding to China. The previous CEO of the company is Howard Leventhal and in Feb 2011, the new CEO of Levendary café is Mia Foster. The company produce salad, soup and sandwiches in restaurants. This restaurant is the multi-unit restaurant which represents the 30 % food service industry in the 9,60,000 locations. The multi-unit restaurant is the concept that owns more than one unit of a franchise and owns more than one store or unit. Ion 2010, the revenue of the company is $ 10 billion This restaurant is categorized into three segments named Quick service restaurant, Specialty establishments and Casual dining. Levendary café is the hybrid of both quick and casual services with an average check ranging between $ 8 to $ 12. The restaurant comprises of two elements - The first element is that it provides wholesome food with greater quality. The second element is that it commits to provide the services to people in a friendly and comfortable atmosphere.
Reasons to enter into the China market
The company decides to enter into the market of China because of the slow domestic growth of the US. The GDP growth of China is 14.5 per cent in the past 10 years. However, the needs of Chinese markets were different from the Foundation Levendary café in the US. Another reason for the company to enter into the market of China is that China becomes the competitive quick-service sector very quickly. China went to RMB 1.996 trillion from 1.106 trillion in the past five years.
Difference between Levendary US vs. China
a) In the U.S., the company follows standardized operations.
b) U.S. Levendary café adopts the GAAP accounting principles.
c) The industry is highly fragmented in the U.S.
d) The operations of the company are flexible in nature with local menu adaptions.
a) In China, the company follows non – standardized operations.
b) China Levendary café adopts Local Accounting Principles.
c) In China, the industry is also a highly fragmented industry.
d) The operations of the Chinese company are also flexible in nature with Drastic menu adaptions.
A SWOT analysis of Levendary Café
Swot analysis can be discussed in the form of Strengths, Weaknesses, Opportunities and Threats –
a)Levendary Café always produces branded grocery items and organic ingredients. The company has created a name for itself. It is a brand that is considered by the customer is a healthy and good service brand.
b)The revenue of the company is $ 10 million in the 3500 cafes.
c)The employees of the company often focus on customer-oriented policies and provide good services to their customers. The café attracts a number of customers with executive professionals and women from the upper middle segment.
d)Levendary Café has trained chefs and the interior design of the restaurant is very attractive.
e)It has a flexible menu option in different 80 states. The menu contains healthy ingredients such as Quinoa and Pomegranates. Several times in a year, the company also introduced the set of new products.
a)The CEO of the company has a lack of international experience and a lack of internal exposure in the multinational restaurant. Mia Foster only works in the hotel industry of the U.S. Along with this, Mr Chenalso had no experience of working in the outside of China.
b)Another weakness of the company is the lack of strategic planning. The manager of China says that there is not any requirement of any expansion strategy due to the dynamic business in China.
c)The menus of the company are different from one place to another and also different from the parent company in the U.S.
d)The sitting area of the Restaurant is also different in one or other aspect. Some Restaurants did not have any sitting place.
a)The highly fragmented Food service industry is creating an opportunity for the company.
b)The company has the opportunity to expand the operations of the business by expanding its business in China. The demographic composition of China provides the opportunity to the company because the growth of population is increased day by day in China.
a)The major threat of the company is the slow domestic growth of the U.S. economy.
b)t very risky for the company to enter into the market of China. Reason being, there is a lack of information about Levendary café about the Chinese market.
c)Levendary café faced high competition and grows very fast. Various competitors in the food sector industry are KFC, Chipotle, Hong Kong Chain, Pizza Hut, Mcdo, Olive Garden, Mongolian Hotpot and Apple bees
d)The taste difference between the regional food, different challenges to make the menu, food and marketing terms cause threats to the company.