This case study analyzes Benihana of Tokyo, a Japanese restaurant chain known for its hibachi-style cooking experience. Some key points: - Benihana introduced Americans to hibachi cooking and transformed how they viewed Japanese food. It focused on high quality ingredients, freshness, and interactive cooking shows. - While food was not entirely traditional Japanese cuisine, the experience centered around entertainment from the chef's cooking skills and customer interaction. - Benihana had more efficient space and labor costs compared to typical restaurants but invested heavily in chef training to ensure quality and authenticity. - As it grew popularity, issues like long wait times and high costs from importing all materials from Japan challenged

1. Case Study Analysis
Benihana of
Tokyo
Annisa Nurul Muktiono Putri
Bimo Aryo Wibowo
Luqman Pradityo
Manda Senna Setrana
Mega Mustika

2. Background
❖ Rocky went to USA and do a research about
Japanese food, turns out Japanese food was not
really popular because it was not as good as Chinese
food.
❖ People think that sukiyaki was like a hot brown water.
❖ Rocky changed the way Americans think about
Japanese food by introducing Hibachi cooking (1st
introduced by Papasan in 1958 in Japan).

3. Product Design
❖ Benihana offers the new experience of dining with
Hibachi style of cooking.
❖ What are they really selling?
1. High quality food
2. Food’s freshness
3. The cooking process’

4. Benihana Concept
❖ FOOD: The food in Benihana is not really traditional
Japanese, but more of a steak cooked through a Hibachi
Cooking, where you sit in front of the cook preparing in
open fire and steel griddle plate (Teppan)
❖ Entertainment: chef’s dexterity and hand movements
while preparing the food are for entertaining the
customers

5. Benihana Concept
❖ Prices: $6 at lunch to $10 At dinner
❖ Space Utilisation: cuts 8% of average back space (22%
as opposed to 30%) for a 5000 square feet operation. It
is approximately 3900 front space and 1100 square feet
for back space

6. How does it Differ
❖ Food: 30-35% as compared to 38-48% of food in other restaurants,
minimum number of menu.
❖ Beverage: 20% than other typical service restaurants (25%-30%),
because people spend lot of time in Lounge to wait while drinking, this
way Benihana could sell a large amount of beverage and gain profit
from Sales.
❖ Labor: 10%-12% of the whole cost structure compared to 30% in
unconventional kitchen.
❖ Advertising: 10% opposed to 0,75%-2% in other typical service
restaurants, outlets of advertising are special media.
❖ Rent: 5-7% opposed to 4,5-9% in typical service restaurants

7. Process Flow on Busy Night
❖ 3.1 Customers Arrive
❖ 3.2 Customer Seated & order Taken
Customer Arrive Wait at Lounge
Wait at Lounge
Seat and Order
Taken

8. Process Flow on Busy Night
3.3 Food preparation
Seat and Order
Taken
Preparation
Pick
Soup/s
alad

9. Process Flow at Busy Night
❖ 3.4 Coking/Eating
❖ 3.5 Dessert
Cooking Eating
Eat Dessert Pay Leave

10. Chef Wage’s Calculation
❖ Gross revenue = $ 1,3 Million
❖ Estimated expense for labor: 10% from gross revenue
= 10/100 x $ 1,300,000 = $ 130,000
❖ Assumption: chef : waitress : others = 5 : 4 : 3; based on
the comparison on managerial wages level (15,000 :
12,000 : 9,000)

11. Labor Wage’s Calculation
(Facts)
❖ Minimum wages regulations in 1972 was US$ 1.60 per
hour for a non-farm job. (source:
http://www.dol.gov/whd/minwage/chart.htm. retrieved: 8
September 2014; 13:00)
❖ If we assume that waitress, dishwasher, bus staff,
people at bar will get approximately $ 1,6/hour.
❖ If they work for approximately 8 hours a day, they will get
monthly wage for: 8 x $ 1,6 x 30 = $ 384/month. They
will get yearly wage for: $ 384 x 12 = $ 4,600/year.

12. Labor Wage’s Calculation
❖ This can be compared with our calculation that
❖ Waiters: 4/12 x US$ 130,000 = US$ 43,333/year.
Each waiters will get: US$ 43,333 / 8 = US$
5,416/year.
❖ Others (dishwasher, bus staff, people at bar): 3/12 x
US$ 130,000 = US$ 32,500/year. Each one will get
US$ 32,500 / 8 = US$ 4,062/year.

13. Profit After Tax
❖ 1.300.000/Year
❖ Food 30%=390.000
❖ Labor 10%=130.000
❖ Adv 10%=130.000
❖ Management 4%=52000
❖ Rent 5%=65000
❖ ______________________ -
❖ 767500
❖ 1300000-767500=533000 >Gross Profit before Tax
❖ For 0,5% Tax=$530335 Profit After Tax
❖ For 1,5% Tax=$525005 Profit After Tax

14. Cocktail/Lounge Wait Time on busy
night
❖ Average time spent in Benihana: 1 - 1,5 hours
❖ Average time spent to enjoy the food: 45 minutes (from
seated to leave the restaurant)
❖ Non-busy nights: 60 mins - 45 mins = 15 mins
❖ Busy nights: 90 mins - 45 mins = 45 mins
Its utilisation is still low because customers wait too
long before they can enjoy the food

15. Customer Arrive
Is the
Restau
rant
full?
Yes
No
Wait at
Lounge
/Bar
Seat and Take
Order
Preparation
(Bring Salad,
soup,Beverag
es)
Cook and Eat Dessert Pay
Leave

16. SWOT Analysis
❖ Strengths
1. Hibachi cooking
2. Authentic decoration
3. Efficient cost structure
4. Highly trained chef
5. High standard of operation control
❖ Weaknesses
1. High cost of establishing new units
2. Policy of Japanese authenticity
3. Franchising failure

17. SWOT Analysis
❖ Opportunities
1. Grow the market by doing expansion (ex: franchising,
investment, joint venture, etc.
2. New market potential: younger generation
3. Small unit / quick service operation
❖ Threats
1. New competitors
2. Unexperienced investors
3. Difficulties in recruiting Japanese staff and personnel

18. Issue
❖ High Cost; insistency on using materials from Japanese
House, Use all native Japanese staff in the store.
❖ Long queuing time

19. Theory
❖ Effectiveness : Doing the right thing to create most value
for the company
❖ Efficiency: Doing at the lowest possible Cost

20. Solutions
❖ Raw materials does not need to be come from Japan. It is a good thing to have a Japanese
decoration in the restaurant, but Benihana does not need to import the ornament from
original Japanese house because it is costly.
❖ Minimising the amount of time customers need to wait in line
❖ Reducing flow time of the process:
1. Hire more chef
2. Make one chef one table system
3. Add more table
4. Rearrange lounge area in busy night
5. Reallocate advertising budget for other things, like hiring more chef and add more table.

21. New Floor Plan
Before After

22. What Makes Operating Cost
High?
❖ They invest more money to educate their chef.
❖ In order to be a chef, each one must pass:
1. 2 years apprenticeship in Japan.
2. 3-6 months course in Japan for English language and Americans
manners, as well as the Benihana form of cooking, which was mostly
showmanship.