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Benihana - Summary

In: Business and Management

Submitted By bluemuffinette
Words 696
Pages 3
Hiroaki Aoki (Rocky) came to US in 1959 as part of a wrestling team he realized that there were more opportunities for him in America than in Japan, especially in the restaurant business where he felt that he will never go hungry. After 3 years of systematic analysis of US restaurant market, he discovered that although American enjoyed eating in exotic surrounding, they were deeply mistrustful towards exotic foods. Additionally, Americans enjoyed watching their food being prepared. Hence, he gave them Benihana, with a Habachi table that allows preparation of exotic fresh food in front of the customers,delivers it with skillful art and allows customer to participate in the cooking process.

To addressed the shortage of skilled labor and keep cost low, Rocky introduced the Hibachi table arrangement, which cuts labour costs while still providing exceptional level of attentive service. Moreover, this arrangement also helped in increasing productive dining space from the usual 70% to 78%. In addition to this, food storage and wastage were reduced by having only three simple “Middle American” entrees on the menu, steak, chicken and shrimp. This move cut food costs up to 35% of food sales, compared with industry average of 38-48%. The bar space was also increased in new sites which brought about increased in beverages sales, which was further enhanced by the low beverage cost of 20% compared to the average industry cost of 25-30%.

Because lunchtime business accounted for 30-40% of total dollar volume, restaurants sites selected were high-traffic, which were located predominantly in the business district, as Benihana's main clientele are office worker and professionals. To make the restaurant as authentic as possible, Japanese craftsmen and every item used in construction is shipped from Japan. Also, with the Habachi tables design, the chef prepares food directly in front of the customers therefore reducing variability from waitress and customer can easily communicate the menu. Thus enabling the average turnover at the teppanyaki table to be about an hour.

All native Japanese chefs are brought into the US are all trained and certified at Banihana college in Tokyo. There, they are given 3-6 months course in English and also American manners and showmanship cooking. After arriving in the US, training is continuous to perfect their art, and competition for becoming the chief chef is a further encouragement. With these highly skilled chefs, Benihana is able to provide an interactive dinning experience for the customer. In order to retain these chefs, Benihana provides them with job security, like in most japanese companies and ensures that all their employees are well taken care off. Hence, the success of Benihana is a unique combination of Japanese patternalism in an American setting, which made it difficult to replicate.

Rocky believed strongly in advertising and the company invested 8-10% of its gross sales in creative advertising and public relation. The advertisments are usually visual ads with which are outstanding and original. However, despite the huge expenses in advertising, customers tend get to know Benihana though word of mouth advertisings. Apart from this each restaurant had a simply management structure which allowed all the managers to report to the operation manager, Allen Saito who in turn reported to Bill Susha (Vice President) which made it easier for the top management to control the company.

Expanding in future, is a problem that is facing Benihana. Franchises had failed because many of the franchisees were businessmen only looking for investment opportunities and did not understand the restaurant business well. These franchisees could not and would not honour the Japanese stuffs that were provided to them. Benihana realised that it was more profitable to own and operate the restaurants themsleves. According to Bill Susha (Vice President) the company could limit to opening only 5 units a year because that was as fast as the two crews of Japanese carpenter could work. Furthermore they had the constraints of the staff and the cost factor which confined them to open there units in major cities. There were other issues which had to be addressed for example importing every item from Japan used in construction of a unit and using Japanese carpenters.

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