Case Study on

Success of Benihana of Tokyo

Group 4
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Evolution of Benihana of Tokyo Evolution of Benihana of Tokyo
Year Event
1935 First restaurant Japan
1958 Introduction of Hibachi table
1964 Entry in US, Manhattan
1966
East side restaurant,
Manhattan
1967
Chicago unit, Big Block
buster
1970
Benihana Palace, Third unit
in Manhattan
1972
Total 15 units in US (9
owned, 5 Franchised and 1
JV
2
Labour Cost (% of Operating
Expenses)
Food Cost ( % of Sales) Beverage Cost ( % of Sales)
Typical US Restaurant Benihana
10 -12
30-35
38-48
25-30
30-35
20
Benihanas Operating Statistics
3
Winning Strategy behind Benihanas Success
Implementation
Strategy
Effective
Training
Employee
Satisfaction /
Motivation
Effective &
Aggressive
marketing
Customer
Satisfaction
Comparatively
Lower
Expenditure
Competence
based
positioning
4
Effective implementation
strategy helped Benihana in
Penetration in US
market
Positioning: Appealing to
a different customer
need
Successful cost
reduction

Implementation Strategy
Implementation
Strategy
Ambience
Historically
authentic
Hibachi /
Tappanyaki
table concept
Economized
Menu
Choices
Collaboration
Simple
management
structure
Site Selection
Effective
Utilization of
Space
5
Three years formal apprenticeship training with
certification in Benihana form of Cooking
Three to Six months course in English language
and for American Manners
Training was continuous process


Effective Training
Chances of growth in organization
Paternal attitude - Cultural bonding with management
Good salaries and perks like bonus plan
Intangible benefits like job security and well being of employees
Pride serves as a motivating factor



Employee Satisfaction and Motivation

6
Effective and Aggressive Marketing
Investment up to 8 10 % of gross sales in advertising
Promoted as an experience vis--vis an eatery
Innovative advertising approach
More visuals in advertisement
Word of Mouth Publicity



Customer Satisfaction

Customer Satisfaction
Service and
Cost of food
Food and
Potions
Atmosphere
Food Quality liked by 98 % - use
of prime grade food
Service liked by 93 %
Overall Atmosphere liked by 93
% of people

7
Management Concerns
Franchising
No knowledge of native Japanese style
No experience of Investors w.r.t. restaurant business
Future expansion
Fund availability / concern about loosing autonomy by taking
loans
Manpower constraints
Higher cost and lead time for Japanese construction material
Limited carpenter crew
Catering need of younger generation
Limited to primary markets only
Diversification
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Analysis
Franchisee
No experience of investors
w.r.t restaurant business
No knowledge of Japanese
culture and Benihana style
of cooking
Expansion
Funds Reluctance to take
loan from financial
institutions
Scarcity of surplus trained
staff
Productivity & limitation
with 2 carpenters
Operations
No quick service option
High advertisement cost &
specifically target towards
food
Limited Variation in Menu
Not analyzed the potential
of secondary markets &
markets outside USA
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Scope for Improvement : Our recommendations
Explore potential areas for further expansions
Can go for collaborations instead of Franchisee
Take funds from financial institutions
Employ more staff, train them and utilize them for expansion
Improve Franchisee selection
Expansion
Economize advertisement cost
Use locally available material for giving shape of Japanese architecture
Use local available manpower for carpentry work or employ more
carpenters from Japan
Cost
Can go for add on business of selling traditional Japanese stuff in a
dedicated area of restaurant
Introduce variations in menu
Expand & redesign bar & Lounge Area keeping in mind young
generation
Introduce Quick service option
Introduce Flexible seating arrangements No need to wait for
minimum 8 customers
Introduce attractive schemes for Females and older generation
Operations
10
MDP ELPM course content in Introduction to Manufacturing
Management by Prof. Saji Gopinath
Operations Management By Richard Chase, Robert Jacobs,
Nicholas Aquilano and Nitin Agarwal
Images from www.google.com






References
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