BENIHANA OF TOKYO

Ma Hai Duong

Background

• Benihana is primarily a steakhouse employing

the ‘Hibachi’ style of cooking

• Founded in 1964,Hiroaki Aoki (Rocky)

• Started franchising in 1969

• 15 units from 1972

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.

Site selection

• Benihana had one basic criterion for site

selection: High traffic.

• Rent normally 5%-7% of sale for 5,000-6,000

square feet of floor space.

• Most units were located in a predominantly

business district, though some had access to

residential areas.

Training

• All chefs were highly trained: they had completed a

three-year formal apprenticeship.

• They were given a three to six month course in Japan in

the English language and American manners.

• Training chefs within the United States was also a

continuous process.

• Paternal attitude Benihana took toward all its employees.

• The unique combination of Japanese Paternalism in an

American setting had to be appreciated.

Organization and control

• Each restaurant carried a simple management structure: a

manager, an assistant manager and two or three front men.

• Reporting structure:

• Individual quota figures allotted base upon overall sales

goals and budget.

ManagerManager of operations

Vice president of operations

Advertising policy

• Different and original in advertising approach.

• Outstanding visual in ads.

• The advertising policy is different and it makes

them seem different to people.

• The company invested 8-10% of its gross sales

on reaching the public.

Future expansion

• Self operated restaurant and franchisees:

Franchisees owner were not experienced in

restaurant business but only investors.

Culture difference in owner and native Japanese

staff.

Control on franchisees was difficult.

• One of biggest constraints is staff.

• Finally, there is the cost factor.

Different between Benihana production

and other typical restaurants

• The “Hibachi table” concept

• Historical authenticity for the building material

• Use space for kitchen is only 22%

• Presenting dynamic cooking show to the

customers

• High number of recommendations and word of

mouth publicity (67%)

• Benihana model business difficult to replicate.

Benihana business model

• Limited menu => keeps cost of food and wastages to

bare minimum.

• Minimize flow time => keep turnover rate high thus

utilization and throughput

• Minimize Waste

• Minimize Inventory

• Optimal site selection =>High traffic area and keep

an optimal mix to meet the business district and

residential flow

• Minimize Space

• Highly trained, skilled and motivated workforce

Design choices

• 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

Conclusion

• 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.