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Benihana

In: Business and Management

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EXECUTIVE MBA 2014/2015

PRODUCTION AND OPERATIONS MANAGEMENT

CASE REPORT

Porto, 24st October 2014

PROFESSOR

GROUP 6

INTRODUCTION – BENIHANA CONCEPT Benihana is a Japanese restaurant chain, where the food is prepared at the client table, by native chefs, in an environment decorated according to Japanese culture, with pieces imported directly from Japan. The concept, based in cooking at the client table, named Teppanyaki table, allows the reduction of the area consumed by the kitchen, as well as the staff costs, while increases the service level provided directly by the chef to the customers. This process is also important to improve the confidence of the clients in exotic food as well as adding a theatrical dimension to mealtime experience. The success of Benihana depends also on the quality of the prepared dishes. The ingredients are carefully selected, namely the quality of the meat. The concept is also supported by the publicity, which follows an uncommon strategy in the sector. The expenses in publicity are in Benihana, higher than average in the restaurant industry.

KEY INGREDIENTS IN BENIHANA´S SUCCESS – ORDER WINNERS

The following key ingredients of Benihana success are part of the Benihana success: • Careful selection of restaurant locations, mainly commercial and business areas with strong circulation of pedestrian traffic. Training and specialization. Chefs intervention on the product. Exotic image. Price. High Quality. Courtesy. Service speed.

• • • • • • •

LABOR COSTS

Since the only specialized member is the “Chef” and the kitchen area was reduced to the minimum there is no need for numerous staff. Each service team is composed of one Chef and a servant who serves two tables at a time.

GROUP 6

2

FOOD COSTS

The food cost in Benihana is reduced, as the menu is limited to 3 or 4 dishes. This means they have reduced storage cost of food and reduced waste.

BEVERAGE COSTS

The main focus of Benihana is the food service. Furthermore the normal rotation period is 45 minutes, which does not allow for much time for drinks consumption. Overall the impact of the Bar and lounge area are getting bigger as new restaurants are opened, and the weight of beverages in the turnover is increasing.

RENTAL COSTS

Benihana’s streamlined production process, in which a chef and one maid are sufficient to serve two tables, requires less space for nonproductive areas (22%), which compares to the industry average of 30%.

PUBLICITY / ADVERTISING

Benihana’s senior management considers publicity essential for success. Market research and creative advertising are widely used to build the brand. Consequently the company allocates a higher amount of their turnover to marketing than the average restaurant.

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3

BENIHANA PROCESS ANALYSIS

CORPORATE OBJECTIVES Growth

CULTURE / VALUES

MARKETING STRATEGY Location (High traffic) Innovative

Japanese familiar / Culture environment Paternalist

ORDER WINNERS AND QUALIFIERS Image -­‐ Restaurant concept -­‐ PR/Publicity Quality -­‐ Food -­‐ Service -­‐ Preparation -­‐ Courtesy Innovation

COMPETITIVE CAPABILITIES Image

TRANSFORMA-­‐ TION PROCESS

INFRASTRUCT-­‐ URE SUPPORT

Standardization Flat Structure

-­‐ Domestic

Quality -­‐ Food -­‐ Service Innovation -­‐ Cost structure -­‐ Concept Speed/Time

Locations

Compensation & Incentives

-­‐ International

Leader

Market Speed/Time Segments -­‐ Professionals /Executives -­‐ Medium Price Standardization Cost

Artisanal Quality cooking by a Systems specialized chef -­‐ Meat Specs -­‐ Training Low area needed for the "Kitchen Control systems -­‐ Cost control

Cost

Limited Mix Image

Dependability Show provided by the Chef

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CONCLUSION

In result of the successful track record, the executives at Benihana aim to grow. This purpose seems difficult to be achieved following the existing strategy. The long training process combined with the demanding construction process of the restaurants is limiting the number of new openings. The previous experience has created skepticism in following the franchise option. The company is facing different scenarios for growth (new openings, pre-­‐cooked Benihana food, model agency and even an IPO), but doesn’t seem to have a clear strategy for the immediate future. We would also want to emphasize that the long training process, and the very standardized practice, which are the center of the company success, are both limiting the speed in which the company is able to adapt to changes in the market and in clients preferences.

GROUP 6

5

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