The main issue in this case is not the entry strategy of Levendary Cafe into China but a communication breakdown between Louis Chen, the China CEO and the US head office due the following factors:
Her lack of local market knowledge will hinder her credibility with Chen and his response to her demands.
Levendary Cafe entered the Chinese market with on shop in a central location. This was crucial in its success and proved that Chen had great business insights on the local market. He then was able to utilize this case as both leverage to continue expanding into China we well as gaining credibility from headquarter.
Foster should proceed with caution so that she doesn’t make any drastic changes to the current way of operations in China.
She needs to emphasize to the market as well as Wall Street that Levendary Cafe takes its culinary due diligence seriously and that it has a sustainable growth strategy in China. Increasingly, American chains have thrown away cookie-cutter-style menus in favor of culinary localization, a flexible strategy that makes room for ingredients and dishes that reflect local tastes, culture and religious requirements.