Benihana of Tokyo
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Transcript of Benihana of Tokyo
Benihana of TokyoCase submission by Group 8
Agenda
Introduction of Benihana of Tokyo Case overview Design choices for operational efficiencies Ingredients of Benihana success Operating ratio’s Process design=> Benihana success
Case overview
Benihana of Tokyo
Founded in 1964, Hiroaki Aoki (Rocky)
Started franchising in 1969 15 units till 1972
Site selection
Target high traffic area Rent normally 5%-7% of sales for 5000-6000
square feet of floor space Primarily located in business district, though
easy access to residential area
Training
Highly trained chefs 3 yr formal apprenticeship 3-6 months course in English language and
American manners Training chefs used continuously
Paternal attitude towards all its employees Unique combination of Japanese paternalism
in an American setting
Organization and control
A simple management structure a manager, assistant manager 2-3 front men
Reporting structure managers reported to the manager of operations Manager operations reported to VP of operations
Individual quota figures allotted based upon overall sales goals and budget Bonus plan for performance over quota Accounting staff and controller to monitor costs
Advertising Policy
Benihana’s success – different and original in our advertising approach
Outstanding visuals in ads Theater of the stomach – wait for the chef A Benihana chef is an artist, not a butcher
The advertising policy is different and it makes them seem different to people “Come in and give a nice Japanese boy a break” –
Rocky Aoki
Future Expansion/ Problems
Self operated restaurants vs. franchisees Franchisees owner were not experienced in hotel business but
only investors Cultural difference in owner and native Japanese staff Control on franchisee was difficult
One of the biggest constraints is authenticate Japanese staff
Cost factor Fixed cost vs. demand turn up
Is it worth to import construction items from Japan? Survey says that people did not come for look and feel but food
Design choices & Business model
Benihana Business Model
Limited Menu Keeps cost of food and wastages to bare minimum
Minimize Flow time Keeps turnover rate high thus high utilization and throughput
Minimize Waste Minimize Inventory Optimal site selection
High traffic area 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
Ingredients for success
Success Parameters
Availability Convenience Personalization Price Quality Speed Visibility of service to the customer Sense of pride in sheaf to work
Cost Structure
Cost structure
Cost Head Industrial std. Benihana
Raw Material Cost of COGS
Food Cost (% of food sales) 38 – 48% 30%
Beverages Cost (% of beverages sales) 25 – 30% 20%
Wages and Salaries
Labor Cost out of Operating Expense (including other heads of employee benefits)
30 – 42% 10 %
Management Salaries 2 – 6% 4%
Rent out of Operating Expense 4.5 – 9% 5 – 7%
Space occupancy 30% 22%
Promotional and Advertisement Cost 0.75 – 2% 10%
Construction cost Lower Higher
Contribution of design to Benihana’s success
Design Parameters => Benihana Success
Customers view point Most people came there recommended Repeat business 65.7% Attracted to food and atmosphere Expectations seemed to have meet Frequency was less ( but aligned to the vision of
founder) Statistics
Gross profit 1.3 million per year
THANK YOU