Various Strategic Decisions Roles and Responsibilities - Sample

Question: What are A) the roles and responsibilities AND B) The current situation and concerns/worries of the following three people? Mia Foster b) LucienLeclerc c) Louis Chen Why did the company expand from the USA to China? What are their general goals in China What plan/strategy did they use in how they entered China? The case describes several major issues that need to be decided aboutLevendaryCaf in China Decision about global standardization vs. local adaptation to the China Market Authority of who is in charge in China GAAP/Financial Reporting issues The future of Louis Chen with the company Clearly describe these problems in several detailed sentences each What were the a) Revenue and b) Profits for the companyworldwidein 2010? What about inChinaonly? Perform a basic SWOT analysis on the company's situation in China (list 3-4 for each) Mia Foster istravelingto China for a meeting with Louis Chen. What arethree different courses of action/optionsshe has for dealing with Louis Chen? Describe a new strategy that the company could follow that will deal with Louis Chen and the other issues, while still keeping the company in China and putting it into a position to grow successfully. What would you recommend that the company do to have a successful business in China?. In the mini case "Is Porsche Killing The Golden Goose" - a) what does the name "Porsche" mean to you, as far as what is the competitive advantage of the brand? b) Do you think expanding this Porsche name from sports cars intoSUVsand other vehicles helps the company or hurts it? Explain. Answer: Roles and Responsibilities Mia Foster Mia is the CEO of the company and responsible for the various strategic decisions and in general responsible for its sustained growth. Lucian Leclerc Lucian is the CCO or Chief Concept Officer and responsible for the representation of the restaurant in front of the customers. Leclerc not only managed the marketing team but also looked after the food development team. Louis Chen He is the head of the Leventhal China operations and has been given the charge of setting up China operations and also responsible for the restaurants strategy for China and execution of the same. Current Situation and Concerns Mia Foster Concerned about the comparatively lower valuations of the restaurant as compared to peer group. Also, the future growth strategy for China and managing Chen are other concerns for her. Lucian Leclerc Concerned about Chens customisation in China with plastic chairs and dumplings which may adversely impact the brand. Louis Chen Concerned about sustained growth in China and fears interference from head office in Denver could adversely impact growth. The company expanded from US to China since there was saturation in the US market and with a burgeoning upper middle class, China presented a huge opportunity for the company. The general goal of the companys operations in China was to set a base for franchising opportunities with a strong market position in that market. The growth strategy for China was dependent on Chen who was provided flexibility to enhance the presence of Levanthal in China which he did by establishing 23 restaurants in one year. In this endeavour, he deployed a high degree of flexibility depending upon the underlying location. The localisation strategy adopted by Chen could potentially hurt the global brand of the restaurant but at the same time standardisation similar to McDonalds may not be the way forward in China. Hence, a glocalisation strategy is required where there is a harmonious mix of the two. Apparently, Chen was given a lot of freedom as Howard Leventhal himself chose Chen to establish presence in China. However, Mia is the CEO of the restaurant and thus Chen owes accountability to the head office in Denver despite his successful stint. Currently, the Chinese operations report their results as per the local accounting standards which are not in conformity with GAAP. As a result, the consolidated financial statement extended to the investors of the restaurant in the US is not accurate. However, migration from non-GAAP to GAAP would entail significant costs but was necessary especially considering the growing contribution of the Chinese operations. Chen had been appointed for a period of two years to establish presence in China which he has done successfully by setting up 23 restaurants in the first year of information. But, it is very difficult to manage him as he does not consult the US office and also does not provide timely updates and information and only flaunts has success. Clearly, more professionalism is desired from Chen so as to sustain a mutually beneficial relationship. Worldwide Revenues (2010) = $ 10,797,423 Worldwide profit (2010) = $ 780,563 Sales generated from China operations (2010) = $ 3,261,598 Net loss from China operations (2010) = - $ 143,620 Strengths Localisation of menu and interiors as per the location Management of Louis Chen coupled with his knowledge of local market Widespread presence through 23 restaurants in the first year Weakness Lack of support from the US based head office Lack of professionalism in Chen which is leading to conflict Lack of communication between Chen and the head office Opportunities Growth opportunities offered by the large Chinese market. Expansion in other Asian markets such as India based on Chinese experience. Evolving in a global brand in China and South East Asia. Threats Dilution of the brand through excessive customisation which is not approved from the head office Chen may retort to arm twisting tactics so as to ensure that he has the last laugh Increasing competition from local Chinese players which is intense Three courses of options are briefly outlined below. Determine whether Chen was the right person to head the China operations. IF she could transform Chen into a professional manager and thus being a strategic asset for the company. Whether he should be provided with the current flexibility that he has been provided with minimal interference from the head office. It is imperative that Mia spends time with Chen in understanding the China market which would determine the level of customisation required. Further, Chen needs to be explained the various concerns of the head office while simultaneously assuring the requisite support from the same. The quality and standardisation issues should be discussed with Chen. Chen should be asked to submit a strategy for expansion and the same should be approved from the head office. While, the Chinese market is significant but the brand should not be diluted. Also, at the same time some flexibility needs to be provided. However, there should be a harmonious mix of the two to ensure sustained success and establishment of brand as a truly global brand. Porsches engineering and design sets it apart from its competitors and as a result form the competitive advantage of the company. This is primarily because of the RD that goes into the design and manufacturing of the car along with its superior performance that delivers a style statement. Yes, the expansion of the company from sports cars to SUV and other vehicles would hurt the image of the company and it is quite possible that the customer loyalty may be adversely affected. In the process of enhancing sales through other cars, the sports car which is the core product for the company may be adversely impacted as the brand may dilute as the company focuses on diverse customer segments.