Should GlobalBite Café’s headquarters enforce stricter brand and operational controls over its China-based subsidiary or grant autonomy to allow for continued localization in one of the world’s most competitive food markets?
Should GlobalBite Café’s headquarters enforce stricter brand and operational controls over its China-based subsidiary or grant autonomy to allow for continued localization in one of the world’s most competitive food markets?
In 2019, GlobalBite Café, a US-based fast-casual restaurant chain, is preparing for a potential initial public offering while navigating the challenges of rapid international growth. Its China-based subsidiary, once-struggling, has made a drastic turnaround by deviating from the standard menu and introducing local items like rice bowls and street-foods via partnerships. These innovations have fueled impressive revenue growth and customer adoption but have also strayed from the global brand identity.
With California headquarters focusing on global consistency to build investor confidence and the China team advocating for strategic flexibility to gain local dominance, there is tension, with upcoming negotiations determining the future of the firm’s strategy in China as well as setting precedent for future subsidiary-HQ relations at the company.
In this interactive exercise, students step into the roles of subsidiary managers, headquarters executives and a mediating global VP. Given specific role instructions as well as tactical “Twist cards,” students are tasked with negotiating a resolution that balances brand integrity with market relevance, financial performance with strategic control and local initiative with global coordination.
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