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BENIHANA OF TOKYO
Service Operations Management
Group No:1
Akshit Mathur | 13P004
Robin Bansal | 13P035
Manu Mehrotra | 13...
1
Benihana ofTokyo SOM| Group 1
Executive Summary
Raised in Tokyo, Hiroaki (Rocky) Aoki managed to launch his first busine...
2
Benihana ofTokyo SOM| Group 1
Table of Contents
Executive Summary..........................................................
3
Benihana ofTokyo SOM| Group 1
What is Benihana Concept?
Benihana’s concept is based on an authentic Japanese atmosphere....
4
Benihana ofTokyo SOM| Group 1
Non-Conventional Kitchen
 Follows Hibachi Table Arrangement, thereby providing high custo...
5
Benihana ofTokyo SOM| Group 1
How does Benihana cost structure differ from that of a typical
sit-down restaurant
Typical...
6
Benihana ofTokyo SOM| Group 1
Calculate the Chef’s Annual Wages for Chicago unit
7
Benihana ofTokyo SOM| Group 1
Determining the profit after tax for Chicago unit
8
Benihana ofTokyo SOM| Group 1
Net profit before income tax = 21.5% of$1.3 million = $279,500/year
Profit after Tax (assu...
9
Benihana ofTokyo SOM| Group 1
Discuss the Service Characteristics and Concepts
Service Characteristics:
 Intangibility:...
10
Benihana ofTokyo SOM| Group 1
SERVICE PROCESS MATRIX:
Due to low Degree of Labour Intensity and low degree of customiza...
11
Benihana ofTokyo SOM| Group 1
Management Concerns
Franchising
 No knowledge of native Japanese style
 No experience o...
12
Benihana ofTokyo SOM| Group 1
Recommendation
 Expansion
 Explore secondary markets and other potential areas for furt...
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Group 1 benihana of tokyo

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Group 1 benihana of tokyo

  1. 1. BENIHANA OF TOKYO Service Operations Management Group No:1 Akshit Mathur | 13P004 Robin Bansal | 13P035 Manu Mehrotra | 13P084 Amitabh Gautam | 13P123 Siddharth Jain | 13P173 Rohit Thakur | 13P229
  2. 2. 1 Benihana ofTokyo SOM| Group 1 Executive Summary Raised in Tokyo, Hiroaki (Rocky) Aoki managed to launch his first business in the United States. Heopened a Chinese-Japanese cuisine restaurant offering a unique experience and attention to its customers. The food process was transformed to an exceptional food experience. He opened a chain of total 15 restaurants across US with some of them being corporate owned and others franchised or with joint venture with leading hotel chains. Hiroaki Aoki proved to be a pioneer in the restaurant industry. The way he succeeded was through complete overhaul of restaurant‘s environment, financial operations and service structure. By decorating his restaurant with Japanese elements and employing Japanese chefs as showmen, the perception of dining at Benihana changed. The new perspective was further supported by reducing the kitchen-room as to have more space for tables and fully adapt the Japanese philosophy as well as creating an unparalleled image for his business. He was able to cut both the labour and food cost and was able to lower wastage by following Hibachi Table arrangement. Due to the uniqueness of the Benihana restaurants, franchise as a growth strategy brought upon many problems: starting from a lack of communication between managers and the Japanese speaking personnel, to inexperienced managers in franchised businesses abroad. This led Hiroaki Aoki to reconsider his options and deciding to expand through other models (joint-venture and hotel-corporation) and in other areas of food industry (retail and quick service food sector).
  3. 3. 2 Benihana ofTokyo SOM| Group 1 Table of Contents Executive Summary..................................................................................................................1 What is Benihana Concept?.......................................................................................................3 What is the process flow on a busy night? ..................................................................................4 How does Benihana cost structure differ from that of a typical sit-down restaurant .......................5 Calculate the Chef’s Annual Wages for Chicago unit ..................................................................6 Determining the profit after tax for Chicago unit.........................................................................7 Discuss the Service Characteristics and Concepts .......................................................................9 Management Concerns............................................................................................................ 11 Analysis.................................................................................................................................11 Recommendation.................................................................................................................... 12
  4. 4. 3 Benihana ofTokyo SOM| Group 1 What is Benihana Concept? Benihana’s concept is based on an authentic Japanese atmosphere. The use of American food favourites (chicken, steak, etc.) combined with the “Hibachi” method of presentation makes this restaurant very different from others. Benihana enhances the experience of their customers by treating the chef as a showman and having a different production line to service (ibid.). The front stage is the largest part of the operations with the chef cooking and serving the dishes together with the waiter, whereas the kitchen preparation is a very small part of their process. Major facts about Benihana are:  Benihana is a restaurant chain founded in 1964, by Hiroaki (Rocky) Aoki  Consisting of 15 restaurants in US by 1972  Gross Sales of the entire chain is about $12 million  Offers a limited menu and targets Business person, Tourist visitors and White Collar  Targets high traffic area and spends heavily on advertisements and promotion  Targets rapid growth by collaborating with various hotel chains and opening quick service stations. Key focus Elements for Benihana include:  Optimum space utilization  Hibachi Table arrangement  Waste management  Historical authenticity  Location advantage Basic Features include: Limited Menu  Offers only three simple Middle American entrees: steak,chicken & shrimp  Keeps cost of food and wastage to bare minimum  Minimal inventory Minimize flow time  Keeps turnover rates high, thus high utilization and throughput  Reduces wait time for customers High Space Utilization  High proportion for productive dining space  Only 22% of the total space of a unit is back of the house
  5. 5. 4 Benihana ofTokyo SOM| Group 1 Non-Conventional Kitchen  Follows Hibachi Table Arrangement, thereby providing high customer attention  Reduced Labor Cost and the additional cost of kitchen space Infrastructure  Infrastructure is specially imported from Japan,thereby giving Historical Authenticity  Good atmosphere and authentic ambience  We have simulated the environment for all the clients involved in the simulation software to understand the process and its performance. What is the process flow on a busy night? Process flow includes the following steps:  Customer enters the restaurant area  He then enters the Bar and orders for drink if required  Then the customer moves to the dining area and gets seated  Waitress takes the order and presents some salads and soup  Chef arrives after that and starts cooking as per the order  Customer enjoys the food  Customer pays for the food and then leaves
  6. 6. 5 Benihana ofTokyo SOM| Group 1 How does Benihana cost structure differ from that of a typical sit-down restaurant Typical Restaurant: Benihana: Comparison of Cost Structureof a Typical Restaurant and Benihana:
  7. 7. 6 Benihana ofTokyo SOM| Group 1 Calculate the Chef’s Annual Wages for Chicago unit
  8. 8. 7 Benihana ofTokyo SOM| Group 1 Determining the profit after tax for Chicago unit
  9. 9. 8 Benihana ofTokyo SOM| Group 1 Net profit before income tax = 21.5% of$1.3 million = $279,500/year Profit after Tax (assuming tax rate of33% in US) = $187,265/year
  10. 10. 9 Benihana ofTokyo SOM| Group 1 Discuss the Service Characteristics and Concepts Service Characteristics:  Intangibility: Authentically detailed Japanese Country Inn Décor  Simultaneous Production and Consumption: Food was prepared in front of the customers by Japanese chefs  Proximity to the customer: Customer involvement in the service production process  Perishability: As the Chefs prepare food in front of the customers, hence if the restaurant does not have enough customers, it leads to perishability of the chef’s time Service Package:  Supporting facility:  Teppanyaki table arrangement  Large Bar  Facilitating goods:  Authentically detailed Japanese Country Inn Décor  Information:  Limited Variation in Menu  Extensive Marketing  Explicit or Implicit Service:  Customer participation  Reduced waiting time
  11. 11. 10 Benihana ofTokyo SOM| Group 1 SERVICE PROCESS MATRIX: Due to low Degree of Labour Intensity and low degree of customization, Benihana come into the “Service Factory” Category Success Parameters: Order Qualifiers:  Speed: Fast table turnover  Quality  Skilled and Motivated Workforce  Lost Cost Operations  Low food wastage and storage costs  Low labor costs  High space utilization Order Winners:  Creative Advertising  High expenditure on Advertising and Public Relations  High quality and customer service  Authentic Japanese atmosphere
  12. 12. 11 Benihana ofTokyo SOM| Group 1 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 ofyounger generation Operations limited to primary markets only Analysis  Franchisee  No knowledge of Japanese culture and Benihana style of cooking  No experience of investors w.r.t restaurant business  Low control over the business operations  Expansion  Reluctance to take loans from financial institutions  Limited carpenter crew  Scarcity of surplus trained staff  Operations  High advertisement and PR cost  Limited variation in menu  No presence in secondary markets and markets outside USA
  13. 13. 12 Benihana ofTokyo SOM| Group 1 Recommendation  Expansion  Explore secondary markets and other potential areas for further expansion  Collaborate with more hotel chains to expand overseas  Go public to secure funds  Employ more staff for further expansion  Operations  Introduce quick service option  Introduce variations in menu  Introduce attractive schemes for female and older people  Cost  Optimize the advertising and PR cost  Use local material for infrastructure  Use local manpower for carpentry work in order to rapidly expand the operations and lower cost

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