Benihana of Tokyo Case Study

Submitted by - Group 3
Aravind Joni (27NMP08)
Anjali Khanna (27NMP46 )
Lata Singh (27NMP53 )
Parvathi VS (27NMP61)
Y Manoj Kumar (27NMP76 )
What is Benihana Concept?

HIBACHI Cooking Style

Bringing the operations close to the customer. Both front door
and back door.
EATER-TAINMENT
Historical Authenticity
Limited menu to reduce waste and cost.
Skilled chefs
Increased bar lounge area to increase the revenue from
beverages.
22% space used as back office space as compared to 30% for
normal restaurant
Unique Experience
            
What is the process flow on a busy night?

Customer enters restaurant

Waitress enters and takes order
Soups, Salads & Beverages are provided
Chef arrives and starts cooking the ordered items on
HIBACHI table
Customer enjoys the Cooking visuals and
customizations to the food.
Customer enjoys the food
Customer pays and leaves
How does Benihana cost structure differ from that
of a typical sit-down restaurant?    
Optimum space utilization :The restaurants have about 8%
more than average productive dinning space
Non-Conventional Kitchen:They eliminated the
conventional kitchen with the hibachi table arrangement
thereby reducing the labour cost and the additional cost of
kitchen space.
Limited menu :By reducing the menu to only three simple
Middle American entrees: steak, chicken and shrimp they cut
the food costs to between 30% and 35% and this also lead to
reduce wastage.
Infrastructure : The infrastructure was built by the materials
gathered From old houses disassembled carefully in Japan
and was built by the two crews of Japanese carpenters
Hibachi Table arrangement :This unique feature not
only adds to the showmanship of the restaurant's culinary
offerings, but also reduces labor cost and takes away any
apprehensions regarding exotic fare.
Location advantage :The restaurants are located in
heavily populated areas so as to attract clientele for lunch
and dinner.
Authentic ambience: Every entity inside the restaurant
was made authentic. Even building materials were
shipped from Japan directly. This helped in attracting
customers
Better Layout: This increased the productive area by
about 8% effectively compared to competitors.
Calculate the chef’s annual wages for Chicago unit?  

Labor cost(waitress +chef+2-3 people in bar + Bus

staff +dishwasher) = 10% annual revenue
Annual revenue 1.3 Million $
Labor cost = 0.13 Million
Number of chef = 6
Total number of labors= 25
Assuming salaries of all labors are same,
Average annual salary of a chef = 6/25*.13 M =3120 $
Calculate Profit after tax for Chicago
Sales Revenue 100%  
Food Revenue 70%  
Beverage Revenue 30%  
     
Cost of sales    
Food 21% =30% of 70
Beverage 9% =30% of 30
Total cost of sales 30%  
     
Gross Profit 70% 100-30
***Assuming sales to be 100% 7
Operating costs  
Miscellaneous expenses 1.5%
Labour 10%
Employee benefits 4%
Employee meals 1.5%
Advertising 10%
Management 4%
Laundry, linen, uniforms 1.75%
Replacements 0.75%
Supplies 1.25%
Menu 0.375%
Music 0.75%
Utilities 1.5%
Administrative expenses 1.375%
Repairs 1.5%
Rent 5%
Taxes 1%
Insurance 0.875%
Interest 0.65%
Depreciation 3%
Total 50.775% =51 %
Net Profit before tax 19% 8
Calculate Profit after tax for Chicago

Sales of Chicago is equal to $1.3million.

According to the above figure, net profit before tax = 19%
of $1.3million = $247000
Assuming Tax rate 35%:
PAT = 0.65* 247000 = $ 160,550

9
Discuss the Services characteristics and concepts in
context of the case.
SERVICE CHARACTERSTICS :
1. INSEPARABILITY: (Closure Proximity)
The service providers physical connection to the service being provided. The
customers involvement in the service production process.
The Teppanyaki Table
The average turnover at the teppanyaki table was an hour which was normally
45 minutes earlier. Above every table was an exhaust hood to remove cooking
steam and odors and much of the heat from the griddle. Each table
accommodated eight diners with service being provided by a chef and a
waitress; each such team handled two regular tables.
After a group of eight had been seated, the waitress would take the order and
bring whatever soup salad and beverages were requested after which the chef
would appear wheeling his cart with the food items to the table.
2. INTANGIBILITY :
Services are performances, deeds and efforts which cannot be felt, sensed or
touched.

How do you get customers to take notice of your service when they cannot
touch it.
The food was cooked in front of the customer by Japanese chefs, and the décor
was that of an authentically detailed Japanese country inn.

3. SIMULTAINEITY: Services produced and consumed at same time

e.g. Customized offerings of the chefs which are immediately consumed by the
customer.
4. PERISHABILITY:

Services cannot be saved , their unused capacity cannot be

reserved and they cannot be inventoried.

Motivating Non-peak consumptions

The hours of operations for the 15 units varied according

to local requirements. All were open for lunch and dinner,
though not necessarily every day for each. Lunch business
was important ; overall it accounted for about 30% to 40%
of the dollar volume despite a significantly lower check
average. Essentially the same menu items were served for
both meals , the lower menu price average at lunch
reflected smaller portions and fewer combinations.
Service concepts : focuses on results

Competitive priority
CUSTOMER VALUE : Customized food
Entertainment along with food
Wait time reduced as menu was minimal and each
table has one chef.
Authentic food
Transparency in service delivery