Beninana

Questions:

1. What is the Benihana concept?

Benihana's concept is based on the following factors:

- Efficiency: Cost control

- Achieve high levels of customer service with less skilled labor

- Limited menu reduces food and waste costs

- Fast table turnover due to limited menu and cooking time, food and info transfer inefficiencies reduced

by eliminating servers

- Large bars increase beverage (high-margin) % of sales

- 78% floor space is dining or bar (vs. 70% elsewhere)

- Simple management structure (4 execs + controller in corporate), good incentive plan, high level of

control

- High quality and customer service: Cooking at the table is entertaining, attentive and reassures

Americans that exotic foods are OK. Chefs are highly trained showmen. Only USDA prime beef used.

- Advertising & PR: Spend unprecedented 8% of sales on programs with "impact philosophy" – visible,

visual, creative, offbeat ads to attract first-time customers, to be retained by the quality of their

experience.

- Authentic Japanese atmosphere: Chefs, décor, etc. all from Japan.

Benihana produces food at the point of of service (from earlier prep in back), eliminating the need for

skilled cooks and servers (only kyacktail waitresses).

- Affords an engaging, interactive dining experience; reduces waiting for servers

- Service of food by chef enables Benihana to provide uncommonly attentive service at low cost –

element of instant gratification

- Limited menu reduces food costs and waste, but limits customers' options

2. Is Benihana a successful operation? How successful?

Benihana is successful operation because of the close relationships developed over the years with our

customers, investors and employees. The Benihana concept began as a family business on the streets of

New York in 1964, and has grown to every corner of the world by adopting and living by a strong code

of conduct and ethics.

3. Prepare an operating statement for the Chicago restaurant based on the operating information in the

case.

4. What are the key ingredients in Benihana's successful recipe? How does Benihana achieve these

numbers?

The key ingredients in Benihana's successful recipe include:

- Concept of preparing and serving food at the table and combined with Japanese concept/culture is

unique

- Management owned due to uniqueness after franchising and joint ventures failed

- Exotic ambiance/ "Different" environment

- High quality food and limited to three simple middle American entrees which contributes to minimal

wastage

- Quick service (average of 45 min.)

- Caters to business and pleasure customers

- Locality, central location (business districts)

- Highly trained

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- Consistent level of standards

- Contract arrangements as well as good incentives resulted in low staff turnover

- Correct (moderate) pricing

- Target audience (middle income)

- Optimised space utilisation

5. Examine the service delivery system of Benihana of Tokyo.