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Glocalisation In A Subsidiary Context

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Glocalisation In A Subsidiary Context
GLOCALISATION IN A SUBSIDIARY CONTEXT

A case study on ‘Levendary Café – the China Challenge’

Sidsel Skovly Green Pedersen
CPR
Valdemar Gaarn Rasmussen
CPR

Pages: 5
STU: 11.363
2nd of April 2014

Introduction – written by Sidsel Skovly Green Pedersen

According to Thomas Friedmann globalization should be considered the integration of everything with everything else; more specifically the integration of markets, finance and technology in a way that makes the world smaller than it has ever been before. In 2008 Levendary Café, an American “quick causal” fast food restaurant, took on this integration as a specific organization strategy. Their home market had been exhausted and their expansion had reached a plateau, why the board decided on a new strategy: to enter the Chinese market. This paper seeks to investigate 1) why and how Levedary Café has chosen to pursue Foreign Direct Investment (FDI) in China; 2) what difficulties the company has met due to strategic challenges of local responsiveness versus global synergy and finally 3) what opportunities Levendary Café has to restructure its investments in China when dealing with subsidiary strategy. We will do this by answering the following research question:

What ‘glocalisation’ challenges have Levendary Café faced as it has entered the Chinese market, and how should it restructure its strategy in order to meet these challenges?

We will apply Hymer’s theory of foreign direct investment, Yip’s framework of global and multidomestic strategy and finally Birkinshaw and Pedersen’s framework of strategy and management in MNE subsidiaries. This will shed light on the difficulties the new CEO Mia Foster has encountered in taking over from the beloved founder and former CEO Howard Leventhal when Levendary Café was spun out from private equity ownership in 2011. More specifically we will identify and come up with a solution to the challenges Mia Foster encountered in expanding into China while trying to
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