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Introduction

Benihana is primarily a steakhouse employing

the Hibachi style of cooking.


It uses authentic Japanese ingredients and
dcor.
Opened in 1964, it operated 15 units across
the country ( of which 5 were franchises) by
1972.

Initial Strategy
Introduce of Hibachi to:
Provide greater attention and service to the
customer while still keeping costs low.
Increase the proportion of the productive area.
Limit the main menu to 3 entrees to reduce

wastage and cut costs.


Insist on historical authenticity.

The Learnings
Franchising created many problems and with

the threat of replication not significant the


practice was stopped.
Greater proportion of space required for the
bar. This was incorporated in the later
restaurants.

Operational Strategy
Selected high traffic sites in business districts

for setting up a restaurant.


Brought in highly trained chefs from Japan.
Provided good incentives to the employees
and created a connect with them helping
reduce the employee turnover.
Broke up larger goals into a series of smaller
goals.
Created a structure for monitoring and
control.

Marketing Strategy
Invested heavily 8-10% of gross sales on

marketing.
Promoted the entire Benihana experience.
Used outstanding visuals and offbeat themes.
Employed considerable amount of market
research.

Analysis
Strengths
Exceptional quality of food.
Substantial repeat business (65.7%).
High number of recommendations and word of

mouth publicity (67%).


Benihana model difficult to replicate.
Simple model leading to greater efficiency and
resource utilization.

Analysis (Contd.)
Weaknesses
Reliance on the skill of the chefs, is thus more

people oriented than process oriented.


Expansion plans constrained by limited
resources.
Model less suitable for expansion into retail
segment.
Several aspects of the Benihana experience e.g.
atmosphere, service still to catch up with food
in terms of appeal.

Observations
8-10% of revenue spent on ads while only

16.5% new customers discover Benihana


through ads. The advertisement spend thus
not justified.
Contrary to Rockys belief the clientele is
evenly spread across different income and
age groups.
The potential market is thus very large.

Recommendations
Benihana primarily sells on the strength of its

food products.
It reduces wastage through its simple menu.
The potential market is huge yet there are
resource constraints in scaling up.
The ad spend could be reduced or reworked
to increase efficiency.
Large scale retail of processed food products
could affect quality.
Could be pursued under a separate brand.

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