Levendary Cafe free essay sample

After gaining the power Foster felt the challenge to make Lavendary Cafe a multi-national brand;Wall Street’s were very skeptical about this idea. Foster did not have previous experience in an international management, therefore the risk was big, especially if the restaurants were supposed to enter China market;she knew that her idea will be in the center of attention. Over the 23 years Howard had relied on CCO-Lucian Leclerc, who had ability to take control risk and also was following the food-trend;Lavendar was in the top U. S. restaurants. The slogan was introduced: â€Å"Tasty Fresh Goodness’-TFG. As the marketing is an important part of the business the CCO decided to cooperate with advertising company to convey TFG concept through advertising images and copy. At the same time the logo was very well-think, as Lavendar Cafe promoted through healthy and cheap food;logo included earth tones to communicate natural. We will write a custom essay sample on Levendary Cafe or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The look of the Cafe in each location is the same, but menu is changing in accordance to the local market preferences as well as pricing differences to meet local competition. But for the recognition purposes the outlook stays the same. Lavendary Cafe was categorized as the quick casual restaurants, therefore the entrees prices are between $8-$20. The two main characteristics of the Cafe are the salads, sandwiches and wholesome soups which are made using high-quality ingredients and a obligation to service in a friendly and comfortable environment. At the same time Lavender Cafe is recognize as the one which is willing to take a risk, especially those which help to develop and evaluate over the time and as a results in profits. The global business environment the company operates in. Consider the industry main competitions, and the biggest challenge Business environment is very competitive especially in food industry is very stable in terms of food and brand loyalty, therefore this forms a high barrier for new competition to break in to the market. ie. Lavendary cafe. Biggest challenge is to change the perception of the local consumers to switch from their staple food of ie. rice, to sandwiches, fresh soups and salads, which is of a more competitive price as wheat prices are booming due to high demand. herefore sandwiches act as a good substitute. to change the perception of new brand ie. lavendary cafe. Will be the most difficult task as there are many factors to consider, some are long term, as taste which requires high promotion especially if the market is very stable, which means high costs are expected. If entering a completely new market people have to see and with time brand is gaining customers. Oth ers are short term as income, demand/supply so, with time and great effort invested in promotional means, changes will emerge ie. hanges in taste, however, this also depends on other competitions product quality, if product quality of competitors decrease, this will encourage a substitution effect to arise, subsequently, consumers will be more willing to change their buying habits and o the market will be more penetrable. As Lavendary Cafe is very flexible their menu are different and especially fitted for the customers in given area. At the same time while brand was under Howard directions their emphasizes :†delighting the customers†. He was telling his stuff †Forget today’s profit. Have a positive impact on customers†. The plan was to gain lots of loyalty clients as the product could be very personalize, as adding extra cheese to the sandwich or making soup extra hot, Those little features are making people to come back. As McDonald was considered as the competition for Lavendary Cafe, they differ from each other in the strategy, while McDonald is creating same menu for its entire system Lavendary Cafe was more flexible and glocalization occurred. Different extra meals were offered and the North and different in the South. At the same time they wanted to â€Å"stay fresh† in the eyes of customers so every so often the choices of the menu were evolving and healthy top-product were added,, ie. quinoa or pomegranates. Also KFC is considered as a great competition, who had more than 3,000 restaurants in 450 Chinese cities and since 2010 KFC opened new store every day. They adapted to Chinese market through adding typical cuisine ie. congee rice porridge,, famous seasoning. McDondald entered Chinese market five years after KFC and developed very rapidly an by 2010, 1,100 restaurants operated in 110 cities. The organizational structure of the company. Organizational structure in the method by which an organization communicate, distributes responsibility and adapts to change. †Organizational structure is how a company utilizes its resources to achieve it goals† . The structure has to be dynamic to adapt to current market, needs and expectations. In the company the Vertical hierarchical organization structure was introduced. There is one CEO-Mia Foster. Directly under CEO there are five subjects, who are in turn, in charge of other subjects. This system seems to be not very well think and chaotic, as out of 5 subject two of them dont have direct downline, as Chief Franchise Officer and VP. Business Dev. In contrast EVP. Administrations have five other subject under to operate with. This is an example of an inefficient organization structure. The impact of culture of the chosen business activities around the world Chinese culture has high marginal propensity to save for thus therefore cheap sandwiches, salads and soups between 8-20 will attract and increase consumption of the goods. However due to chinese culture sandwiches do not appeal within this market. marginal propensity to save means the population in chinese culture prefer to save than to spend. United states of america , we have a have propensity to spend and so our taste and buying habits change also; for this reason, united kingdom’s market is every penetrable to new arising enterprises. However, in china this is different. The difference is in the income level of china and also the value of its currency; the value of chinese currency is very low and so, buying power is also very weak in comparison to other developing economies. hoices in china is also very low and there are regulatory barriers for new enterprises due to china’s economy is a closed market in terms of transfer of knowledge. for instance, china has barriers to block certain information from other country’s into china which exposes the chinese market to be negative. therefore, for these following reasons, it will be difficult to penetrate the chinese market as there are many of barriers and censoring in exposing certain products into the chinese market. or example, if lavendery cafe products change the taste of the chinese population away from the staple food of rice, china would put barriers to stop our export into china. This is because the rice market is predominant total revenue within china; if lavendaery products harm this stability, the competition will be eliminated. Within the united states of american market, it is a more developed economy and so the living standards within the united states of america is relatively high compared to China. ost part of china is rural areas and so living standards within these regions is very low; data shows families live under the poverty line, which is a family surviving under $2 per day. This is one of the main differences in contract to the united states of america; this information has to be considered by lavendery cafe, so that the location can be chosen to maximize profits and avoid potential losses to the business. American culture are big consumers of meat. for instance, fast food restaurants are very successful within the united states of america, where large portions are sold and consumed on a regular basis. or example, in McDonald’s large portions of fires and friend chicken is produced on a massive scale to supply the large demand for these consumables. Whereas, china’s main staple food is predominately, wheat, not meat. This is because of their culture. Wheat is very filling and so consumption need not to be large as it is a complex carbohydrate. in the contrary, the american market consume for pleasure as food is a luxury not a need. china on the other hand, has different understanding and perception of the value of food to be healthy. In addition, the chinese market is made up of the majority being labour intensive. For this reason, complex carbohydrates, which is rice for example, achieves what is required to satisfy and sustain hunger for long periods as chinese working hours is very long, without breaks. In contrast, in united states of america, working hours are relatively low compared to china, including good recreation hours between working shifts. Price elasticity measures the sensitivity of price changes of products. United states of america are price inelastic; changes in price of food will not cause a large change in demand for the product. or example, price of lavendery cafe salads increased by 2%, results in no changes to the demand of the salads. This maybe due to high income levels of the american population and that food price is relatively low. China in comparison, is very price elastic. Price elastic in terms of changes in food prices will cause a large change in the demand of X food product ie. the chinese market is very price sensitive. this is true in some regions for instanc e, in rural china as the income levels are relatively low, in comparison to the city ie. in Shanghai, where income levels are relatively very high and are stable in comparison. ith regards to this, lavendary should locate their business within the city where price elasticity is inelastic ie. within the cities of China, affluent familys are ale to afford to try a different western cuisine. Lavendary Cafe will have to adapt its sandwiches, soups and salads to accommodate the tastes of the chinese population to enable its sales to flow, following the examples of McDonalds and KFC. Chinese consumers are very unwilling to change their buying habits in terms of food. Therefore Lavendary Cafe has to invest a lot in marketing;high costs of promotion via mass media advertisement ie. TV and billboard promotions. The key management issues the chosen organization faces Inefficiency in communication horizontally can be a problem. There is no proper communication between admin and operating officer, this is further delayed by vertical miscommunication ie. EVP Administrations has many downlines and so communication errors can occur and cause delays within the chain of communication up the hierarchy then horizontally between departments. There is no smooth flow of the informations between departments. There is too many people in the hierarchy, therefore the informations are not being passed immediately therefore delays occurs. If there is an autocratic system, Mia Foster-CEO is the one who is making the final decision. Therefore there might be no motivation in managers, who are being below CEO. They cannot make decisions based on actual facts . Even if they would know more than CEO and their decision will be more inform decision than CEO to who infotmations are being passed from the managers, who are being below, even if the information are from first hand, CEO cannot asses them properly, as each manager is being specialised in given are, therefore their decision will be more proper and could bring lots of benefits, but in autocratic system CEO make all decisions. However Lavendary Cafe operate in the way that each franchise in each country ie. China will be tailored to the Chinese market not only to US market as they want to increase sales so adaptation of own product to the locals is essential to achieve the objectives.