The Levendary Café, founded by Howard Leventhal, started out as a small Denver establishment serving soup, salad, and sandwiches. Over the years, it has grown into a $10 billion business with more than 3500 cafes worldwide. With this kind of success, naturally comes competition. Some of Levendary's top competitors include Unalive, Kraft Foods, and Group DANONE.

To analyze Levendary's position in the market, a Porter's Five Forces analysis was conducted. The first force examined was competitiveness. Although Levendary has managed to establish itself as a successful business, it continues to look for new ways to remain ahead of its rivals.

The second force looked at the threat of new entrants. Barriers have been put in place that make it difficult for new businesses to break into the consumer food industry. Levendary has managed to establish a large distribution network, making it a well-known company with a solid reputation.

The third force analyzed was the bargaining power of suppliers. Levendary has the most prominent control in the food industry, which poses a challenge when it comes to managing its suppliers. The company must come up with long-lasting solutions to ensure a stable supply chain.

The fourth force looked at the bargaining power of buyers. With many companies selling similar products at comparable prices, customers have higher bargaining power. Levendary has made customer satisfaction a top priority, which has made it stand out from its competitors.

The final force examined was the threat of substitutes. There has been a rising hazard of substituting products like boiled water and pasteurized milk with Nestle's items. Levendary has coped with this challenge by highlighting the health advantages of its products.

To ensure its success, Levendary has leveraged its capabilities and resources to develop a sustainable competitive advantage. The company operates on high margins, charging premiums compared to its competitors. This has been effective in generating resources and catching up with market pressure while investing heavily in research and development. Levendary has also purchased patents and copyrights from creators, effectively overcoming challenges brought about by competitors.

Finally, a PEST analysis was conducted. This analysis looked at the political, economic, sociocultural, and technological factors that could impact Levendary's success. Understanding these external factors and modifying strategies accordingly can help ensure continued growth and success for Levendary.

Levendary Cafe's Core Competencies

Levendary Cafe stands out due to its well-organized and efficient organizational structure, which supports its primary business operations in the United States. The company utilizes a complex and compelling organization to maintain a competitive edge in the market. The Chief Concept Officer manages the team, ensuring they stay up-to-date with emerging trends. Additionally, the Marketing Department uses approaches like advertising to adapt to different markets, while the Food Department oversees product development and inspection. The Operations Department is responsible for the daily catering business. This demonstrates a clear division of labor and close cooperation, laying a solid foundation for Levendary Cafe to obtain sustainable competitive advantages. These core competencies cannot be easily imitated or replaced by other companies.

Another core competency of Levendary Cafe is its valuable corporate culture, which focuses on "delighting customers." The company encourages its employees to provide personalized services to meet customers' needs, leading to increased customer satisfaction. The company also prioritizes flexible menu formulations to meet local consumers' preferences, introducing new products that incorporate popular ingredients. This business model is rare, making it costly for other companies to replicate.

Business-Level and Corporate Level Strategies to Employ

Levendary Cafe recently faced a crisis resulting from the business model it employed in China. However, it can experience a turnaround by adjusting its corporate-level strategy and improving its business-level one. To increase its efficiency, Levendary needs to organize its reporting structures and business models, ensuring its operations remain standardized in China.

Improving its business-level strategy requires Levendary Cafe to modify product features and change its products' value to meet customer needs and preferences. The company must also understand its customers and develop a marketing strategy that supports its entire go-to-market approach. Offering after-sales services, post-purchase information, or organizing events are ways to increase customer loyalty. Another way to increase sales is by selecting a new target segment or restructuring a product's position. The company can consider launching a new version of a product that appeals to customers in the new market segment.

If closing down its operations in China and establishing a new strategy is not profitable, Levendary can still implement a leadership appraisal strategy that evaluates yearly performance. The company can specialize in providing local dishes to attract wider customer bases despite local competitors.

If the above-mentioned strategies do not bring the expected results, Levendary should consider merging with McDonald's or entering a cooperative strategy. This alliance will enhance Levendary's organizational capabilities and provide a competitive advantage in the market. Working with McDonald's will help Levendary enter new markets, especially in Chinese operations. The company will benefit from Research and Development, improving the value of its products in the market while understanding the customer's wants and needs.

Levendary Cafe requires additional skilled staff to achieve its objectives. To solve this issue, the company could consider merging with another business to obtain industry knowledge and facilitate strategic planning. An ideal partner would be McDonald's, a reputable industry leader known for its astute management and systematic processes. Levendary Cafe could learn from McDonald's and improve its own management practices.

Acquiring another business would be more cost-effective for Levendary Cafe than expanding its operations. This strategy would enable the company to reduce marketing expenses, leverage the purchasing power of the merged entity, and gain a competitive edge by acquiring new intellectual property specific to products and services. In addition, Levendary Cafe could purchase a fast-food restaurant to increase its customer base while limiting competition with other market players. Developing strategic alliances with other businesses would create a network of mutually beneficial connections that would enable the company to grow its sales operations.

To expand in international markets, Levendary Cafe should develop a well-defined international strategy that considers trade-offs between cost reduction and product localization. Such an approach would help the company decide whether to pursue a multi-domestic, global, or transactional strategy. A transnational strategy that combines regional responsiveness and low costs would help Levendary Cafe market its products and services internationally. However, to succeed in the global market, the company must develop innovative ways to control production and marketing processes.

To differentiate its products, Levendary Cafe could tailor its menu to align with the specific tastes of customers in different regions. A multi-domestic strategy would enable the company to cater to different customer preferences while maintaining a centralized management structure. By adapting its marketing, product selection, and payment methods, Levendary Cafe could appeal to its target customers worldwide.

In conclusion, Levendary Cafe could realize significant growth and business success by partnering with another company, designing an innovative business strategy, and tailoring its services to suit different customer needs across different regions. These initiatives, backed by advanced planning and reliable business networks, could propel the company to new heights of success in the industry.

References:

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Hacklin, F., Bjorkdahl, J., & Wallin, M. W. (2018). Strategies for business model innovation: How firms reel in migrating value. Long-range planning, 51(1), 82-110.

Prajogo, D. I. (2016). The strategic fit between innovation strategies and business environment in delivering business performance. International journal of production Economics, 171, 241-249.