Case Analysis on Benihana of Tokyo

Benihana’s Concept

The Concept of Benihana tries to bring authentic Japanese style cooking and ambience in American
restaurants. They are using the Hibachi method which differentiates it from other restaurants. They
leverage showmanship provided by the chefs.

Features of Benihana Include:

1. Waste Management: They are using limited menu to reduce waste

● Three simple entrees are offered by them (chicken, steak & shrimp)
● Due to this they are able to reduce cost of food and wastage to minimum and this
also allows them to reduce inventory cost and maintain minimum inventory.
2. High Utilization of Space:
● They use Hibachi style arrangement, due to which they are able to reduce space of
backspace by 8% and limit it to 22%
● They have reduced flow time which resulted in they having higher throughput
3. Location Advantage
● Target high traffic areas
● The material for building restaurant is imported from Japan to give them authenticity
4. Operational Efficiency
● Labour Cost are 10-12% of Operating Expenses as opposed to 30-35% of other
restaurants
● Food Cost are 30-35% of sales as compared to general 38-48%
● Beverage cost is 20% of beverage sales as compared to 30-35% of other US
restaurants

Process Flow

1. Customer enters the restaurant

2. Enters the Bar and lounge area and gets a drink
3. Then he goes to dining area where he is gives the order
4. DRINKS/Soups are served to the customer
5. Chef comes with cart and shows the live cooking
6. Customer pays and he leaves

Management Concerns

● Franchise:
1. Limited knowledge of culture of Japan and style of cooking
2. Franchise having no experience in restaurant business
3. Reduced control over business operations
● Expansion:
1. Limited staff availability who are trained in Benihana style
2. Raw material and carpenters sourced from Japan
● Operations:
1. High Advertisement cost
2. No presence in markets outside USA and only available in primary market in USA of
middle-income class group
3. Higher staff training cost