benihana of tokyo

1. BENIHANA OF TOKYO
By – Himanshu Saigal
Aamir Ansari
Ahmed Atif Abdulla

2. Case summary
• Benihana of Tokyo has been started by Rocky in 1964. rocky came to
America with his university wrestling team that America would give
him more opportunity than his native nation japan.
• Rocky started his business in 1964 with his initial savings of 10000$
and borrowing of 20000$ a firm with chain of 15 restaurants and net
worth of 12$ million.

3. Case summary
• Initial analysis of Rocky:
 Americans enjoy eating in exotic surrounding but they are deeply
mistrustful of exotic food.
 Also people very much enjoy watching their food being prepared.
 The biggest problem in this industry in US was scarcity of skilled
labor.
 Food storage and wastage contribute significantly to the overhead of
any typical.

4. Case summary
• Site selection: as lunch was given importance the sites were being
selected where there was high traffic.
• Training: all chefs were highly trained. All were young and certified.
• Control: Papasan and rocky were at the top of the management
level. Under there was on V.P. operations, Controller, operations
manager and advertising manager used to report him.
• The company spends about 8-10% of its gross sales on creative
advertising and public relationship.

5. Constraints in Future
Expansion
• Franchisee business failure: because many owners do
not know about the restaurant business.
• Staff: biggest problem was staff, there were only two
carpenters and each unit required 30 staffs out of that 8-
10 were trained staff

6. Difference between Benihana
production and other typical
restaurant?
The “Hibachi Table” concept
Historical authenticity for the building material
Use of space for kitchen is only 22%
Presenting dynamic cooking show to the customers
High number of recommendations and word of mouth
publicity (67%)
Benihana model difficult to replicate.

7. It gives the customer a unique experience where they interact with the cook
and waiter rather than just waiter like in most restaurants. It helps to improve
customer intimacy and adds a positive experience.

8. Limited menu - Food storage/inventory and waste management
costs contribute significantly to the overheads of restaurant
business and Benihana is efficiently able to reduce these costs by
having a very limited menu of just 3 choices. It helps in
reducing inventory. By this it was able to save 30-35% of costs.
Located in High Traffic Places – Benihana chooses their sites in
high traffic places like central business districts with easy
access to residential areas because of their high focus on
lunch and dinner time business.
Simple management structure – Benihana has a very simple
management structure that includes a Manager, an assistant
manager and 2-3 front men.

9. Benihana’s Operating Statistics
Labour Cost (% of Operating
Expenses)
Food Cost ( % of Sales) Beverage Cost ( % of Sales)
Typical US Restaurant Benihana
10 -12
30-35
38-48
30-35
25-30
20

10. An operational view.
Lounge seating
Getting
drinks
ready
Handling
over menu
Serving
drinks
Taking
orders
Chef setup
(in kitchen)
Chef wheel
Preparation
at table
Food
served
Desert
served
Cheque
delivered
Payment
collected

11. Production System
• Arrival – Cocktail Lounge, batches of 8 in hibachi table
• Request - 3 Food item menu
• Capability – Chef prepares food directly with customers
within the encounter, reducing variability from waitress
and customer capability to communicate menu.
• Effort- Participate in the cooking process
• Subjective Reference – Customers suggest preferences
while chef is cooking allowing customer more control of
product.

12. Major Design Choices
• Waiting Time (Bar/ Lounge area) - Increases beverage sales
and reduces cost. Convenient waiting time, creates revenue
generation from Inventory. 8 sitting together filling up empty
seats.
• Cooking - Eliminates needs for conventional kitchen. Needs
only 22% of total space vs. 30% of typical restaurant. Hibachi
table concept reduced the need of the waiter. Due to this, the
labor cost has gone down to 10-12% of gross sale.
• Ordering Food (Reduced menu) - Avoid wasting of food,
cutting food cost to 30-35% vs. 38-48%

13. Major Design Choices
• Advertising - 10% of sales vs. 0.75 to 2%, focus on
creative and innovative advertising style
• Staff – Japanese , well trained chefs, reduced no. of
waiters, labour cost 10-12% vs. .30-35% of sales.
• Location – Heavily populated areas to attract for both
lunch & dinner.

14. Services Kind
• Core Benefit – Food
• Basic Service – Hospitality
• Expected Service – Customization
• Augmented Service – Hibachi Table Concept
• Potential Service – Food Processors

15. ありがとう