1. From an industry-based view, identify some of the competitive forces affecting the Chinese restaurant industry

3i Groups Investment in Little Sheep

Team 2

1. From an industry-based view, identify some of the competitive forces affecting the Chinese restaurant industryThe Chinese restaurant business is fragmented, difficult to standardize

Largest cost component is the chef, difficult to achieve consistency

Do-it-yourself style of dining

Clear trend of growth for Chinese restaurant industry at the level of 20% per year

2. What are the key factors that explain the success of Little Sheep? What are the main obstacles associated with its continued growth?Successful recipeStandardization which made the business capable of scaleAggressive growthBrand awarenessTrademark registration tacked 7 years (too long)Low quality of franchisesLack of control Lack of procedures

3. From a resource-based view, explain the non-financial benefits that 3i can bring to Little Sheep. So, why did 3i win the competition against other suitors such as Goldman Sachs and Morgan Stanley?Sector focused investmentsCapable and determined manager Daizong WangSpecial programs People programBusiness Development PracticeSuitable adviser for Little Sheep Nish Kankiwala

4. Compare the similarities & differences between the typical mid-size investments in the West vs. China. If you were a manager working for a Western firm, what lessons would you draw from this case?DifferencesCompetitionManagementGrowth rateLegislationWestHigherEasy to find skilled managersLowerBusiness-friendlyChinaLowerScarceHighArbitrarySimilaritiesAccess to financingOrganizing the businessManagementPrepare for final exit

5. If you were an entrepreneur at a firm in China or in emerging economies in general, what lessons would you draw from this case?To be humble and accept the professional managements opinions

To have faith in the business model

To be ready to reinvent the business model e.g. the phased overhaul of the franchise systemTHANK YOU !

THANK YOU !!!