1. Case submission by Group 8

2.  Introduction of Benihana of Tokyo
 Case overview
 Design choices for operational efficiencies
 Ingredients of Benihana success
 Operating ratio’s
 Process design=> Benihana success

4.  Founded in 1964, Hiroaki
Aoki (Rocky)
 Started franchising in 1969
 15 units till 1972

5.  Target high traffic area
 Rent normally 5%-7% of sales for 5000-6000
square feet of floor space
 Primarily located in business district, though
easy access to residential area

6.  Highly trained chefs
 3 yr formal apprenticeship
 3-6 months course in English language and
American manners
 Training chefs used continuously
 Paternal attitude towards all its employees
 Unique combination of Japanese paternalism
in an American setting

7.  A simple management structure
 a manager,
 assistant manager
 2-3 front men
 Reporting structure
 managers reported to the manager of operations
 Manager operations reported to VP of operations
 Individual quota figures allotted based upon
overall sales goals and budget
 Bonus plan for performance over quota
 Accounting staff and controller to monitor costs

8.  Benihana’s success – different and original in
our advertising approach
 Outstanding visuals in ads
 Theater of the stomach – wait for the chef
 A Benihana chef is an artist, not a butcher
 The advertising policy is different and it
makes them seem different to people
 “Come in and give a nice Japanese boy a break” –
Rocky Aoki

9.  Self operated restaurants vs. franchisees
 Franchisees owner were not experienced in hotel business
but only investors
 Cultural difference in owner and native Japanese staff
 Control on franchisee was difficult
 One of the biggest constraints is authenticate Japanese
staff
 Cost factor
 Fixed cost vs. demand turn up
 Is it worth to import construction items from Japan?
 Survey says that people did not come for look and feel but
food

11.  Limited Menu
 Keeps cost of food and wastages to bare minimum
 Minimize Flow time
 Keeps turnover rate high thus high utilization and throughput
 Minimize Waste
 Minimize Inventory
 Optimal site selection
 High traffic area
 Keep an optimal mix to meet the business district and residential flow
 Minimize Space
 Highly trained, skilled and motivated workforce

12.  Making Japanese cooking tangible
 People feel good about the cooking process and not
food only
 Personal Training
 Highly trained personal
 Reducing Risk
 Market research and setup at highly populated area
 Controlling quality
 Making the customer look what they are being
cooked

14.  Availability
 Convenience
 Personalization
 Price
 Quality
 Speed
 Visibility of service to the customer
 Sense of pride in sheaf to work

16. Cost Head Industrial std. Benihana
Raw Material Cost of COGS
Food Cost (% of food sales) 38 – 48% 30%
Beverages Cost (% of beverages sales) 25 – 30% 20%
Wages and Salaries
Labor Cost out of Operating Expense (including 30 – 42% 10 %
other heads of employee benefits)
Management Salaries 2 – 6% 4%
Rent out of Operating Expense 4.5 – 9% 5 – 7%
Space occupancy 30% 22%
Promotional and Advertisement Cost 0.75 – 2% 10%
Construction cost Lower Higher

18.  Customers view point
 Most people came there recommended
 Repeat business 65.7%
 Attracted to food and atmosphere
 Expectations seemed to have meet
 Frequency was less ( but aligned to the vision of
founder)
 Statistics
 Gross profit 1.3 million per year