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Case Study on

Success of Benihana of Tokyo

Group 4 1

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Evolution of Benihana of TokyoEvolution of Benihana of Tokyo

Year Event

1935 First restaurant Japan

1958 Introduction of Hibachi table

1964 Entry in US, Manhattan

1966

East side restaurant,

Manhattan

1967

Chicago unit, Big Block

buster

1970Benihana Palace, Third unitin Manhattan

1972

Total 15 units in US (9

owned, 5 Franchised and 1

JV

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Labour Cost (% of Operating

Expenses)

Food Cost ( % of Sales) Beverage Cost ( % of Sales)

Typical US Restaurant Benihana

10 -12

30-35

38-48

25-30

30-35

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Benihanas Operating Statistics

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Winning Strategy behind BenihanasSuccess

Implementation

Strategy

EffectiveTraining

EmployeeSatisfaction /

Motivation

Effective &

Aggressivemarketing

Customer

Satisfaction

ComparativelyLower

Expenditure

Competencebased

positioning

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Effective implementation

strategy helped Benihana in

Penetration in US

market

Positioning: Appealing to

a different customer

need

Successful cost

reduction

Implementation Strategy

ImplementationStrategy

Ambience Historicallyauthentic

Hibachi /Tappanyaki

table concept

EconomizedMenu

Choices

CollaborationSimple

managementstructure

Site Selection

EffectiveUtilization of

Space

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Three years formal apprenticeship training with

certification in Benihana form of Cooking

Three to Six months course in English language

and for American Manners

Training was continuous process

Effective Training

Chances of growth in organization

Paternal attitude - Cultural bonding with management Good salaries and perks like bonus plan

Intangible benefits like job security and well being of employees

Pride serves as a motivating factor

Employee Satisfaction and Motivation

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Effective and Aggressive Marketing

Investment up to 810 % of gross sales in advertising

Promoted as an experience vis--vis an eatery

Innovative advertising approach

More visuals in advertisement

Word of Mouth Publicity

Customer Satisfaction

Customer Satisfaction

Service andCost of food

Food andPotions

Atmosphere

Food Quality liked by 98 % - use

of prime grade food Service liked by 93 %

Overall Atmosphere liked by 93

% of people

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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 of younger generation

Limited to primary markets only

Diversification

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Analysis

Franchisee

No experience of investorsw.r.t restaurant business

No knowledge of Japaneseculture and Benihana style

of cooking

Expansion

Funds Reluctance to take

loan from financialinstitutions

Scarcity of surplus trainedstaff

Productivity & limitationwith 2 carpenters

Operations

No quick service option

High advertisement cost &specifically target towards

food

Limited Variation in Menu

Not analyzed the potentialof secondary markets &

markets outside USA

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Scope for Improvement : Our recommendations

Explore potential areas for further expansions Can go for collaborations instead of Franchisee

Take funds from financial institutions

Employ more staff, train them and utilize them for expansion

Improve Franchisee selection

Expansion

Economize advertisement cost Use locally available material for giving shape of Japanese architecture

Use local available manpower for carpentry work or employ morecarpenters from Japan

Cost

Can go for add on business of selling traditional Japanese stuff in a

dedicated area of restaurant

Introduce variations in menu

Expand & redesign bar & Lounge Area keeping in mind younggeneration

Introduce Quick service option

Introduce Flexible seating arrangements No need to wait forminimum 8 customers

Introduce attractive schemes for Females and older generation

Operations

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MDP ELPM course content in Introduction to Manufacturing

Management by Prof. Saji Gopinath Operations Management By Richard Chase, Robert Jacobs,

Nicholas Aquilano and Nitin Agarwal

Images from www.google.com

References

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