A descriptive case study on Benihana of Tokyo Case

2. Introduction
Benihana is primarily a steakhouse employing the
‘Hibachi’ style of cooking.
It uses authentic Japanese ingredients and décor.
Opened in 1964, it operated 15 units across the
country ( of which 5 were franchises) by 1972.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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 Rocky’s belief the clientele is evenly
spread across different income and age groups.
The potential market is thus very large.

10. 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.

11. THANK YOU