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Benihana of tokyo


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A descriptive case study on Benihana of Tokyo Case

A descriptive case study on Benihana of Tokyo Case

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  • 1. Introduction 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.
  • 2. Initial Strategy 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.
  • 3. The Learnings Franchising created many problems and with the threat of replication not significant the practice was stopped. Greater proportion of space required for the bar. This was incorporated in the later restaurants.
  • 4. Operational Strategy 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 employee turnover. Broke up larger goals into a series of smaller goals. Created a structure for monitoring and control.
  • 5. Marketing Strategy 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.
  • 6. Analysis Strengths  Exceptional quality of food.  Substantial repeat business (65.7%).  High number of recommendations and word of mouth publicity (67%).  Benihana model difficult to replicate.  Simple model leading to greater efficiency and resource utilization.
  • 7. Analysis (Contd.) Weaknesses  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 of appeal.
  • 8. Observations 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.
  • 9. Recommendations Benihana primarily sells on the strength of its food products. 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 increase efficiency. Large scale retail of processed food products could affect quality. Could be pursued under a separate brand.
  • 10. THANK YOU