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Benihana is primarily a steakhouse employing the
‘Hibachi’ style of cooking.
It uses authentic Japanese ingredients and décor.
Opened in 1964, it operated 15 units across the
country ( of which 5 were franchises) by 1972.
Introduce of Hibachi to:
Provide greater attention and service to the customer
while still keeping costs low.
Increase the proportion of the productive area.
• Limit the main menu to 3 entrees to reduce
wastage and cut costs.
• Insist on historical authenticity.
Franchising created many problems and with the
threat of replication not significant the practice was
Greater proportion of space required for the bar. This
was incorporated in the later restaurants.
Selected high traffic sites in business districts for
setting up a restaurant.
Brought in highly trained chefs from Japan.
Provided good incentives to the employees and
created a connect with them helping reduce the
Broke up larger goals into a series of smaller goals.
Created a structure for monitoring and control.
Invested heavily 8-10% of gross sales on marketing.
Promoted the entire Benihana experience.
Used outstanding visuals and offbeat themes.
Employed considerable amount of market research.
Exceptional quality of food.
Substantial repeat business (65.7%).
High number of recommendations and word of mouth
Benihana model difficult to replicate.
Simple model leading to greater efficiency and resource
Reliance on the skill of the chefs, is thus more people
oriented than process oriented.
Expansion plans constrained by limited resources.
Model less suitable for expansion into retail segment.
Several aspects of the Benihana experience e.g.
atmosphere, service still to catch up with food in terms
8-10% of revenue spent on ads while only 16.5% new
customers discover Benihana through ads. The
advertisement spend thus not justified.
Contrary to Rocky’s belief the clientele is evenly
spread across different income and age groups.
The potential market is thus very large.
Benihana primarily sells on the strength of its food
It reduces wastage through its simple menu.
The potential market is huge yet there are resource
constraints in scaling up.
The ad spend could be reduced or reworked to
Large scale retail of processed food products could
Could be pursued under a separate brand.