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Benihana of Tokyo Case Solution

Solution Id Length Case Author Case Publisher
1235 1114 Words (5 Pages) W. Earl Sasser, John R. Klug Harvard Business School : 673057
This solution includes: A Word File A Word File

Benihana is a Japanese themed restaurant based on highly efficient operations. It also consists of a differentiating strategy that puts it ahead of its competition in both costs as well as differentiation aspects. Its differentiation strategy consists of entertaining the customers with live cooking by the chefs. The restaurant has standardized operations with few variants offered to reduce the costs. Benihana’s advertising costs are greater than those of typical restaurants. All other costs are lower compared to the other restaurants. Benihana’s operations strategy is an amalgamation of standardization and batch processing. This strategy has made it successful enough to generate revenues for further expansion.

Following questions are answered in this case study solution

  1. Prepare a detailed process flow diagram of a Benihana restaurant on a typical busy night.

  2. Describe the process flow diagram in detail and contrast it with that of a typical sit-down restaurant.

  3. Compare and contrast Benihana’s cost structure with a typical sit-down restaurant.

  4. What is the Benihana concept?

  5. Is Benihana a successful operation? How successful?

  6. How does Benihana’s strategy differ from that of a typical sit-down restaurant? How are the production processes different?

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

Case Analysis for Benihana of Tokyo

Describe the process flow diagram in detail and contrast it with that of a typical sit-down restaurant.

Benihana is much like a typical restaurant. The customers enter the restaurant because they want to order food; they order the food that they prefer, and eat it after it gets on their table. The ending is satisfied customers exiting the restaurant which is like any other restaurant. However, the main difference between a typical restaurant and Benihana is the part between the start and the end of the process flow diagram. The people first order drinks while waiting for the availability of the table. If the table is available, the customers are seated immediately and are asked for their order. These tables are in the dining room which is separate since the chef comes in and prepares the food in front of the customers. The furniture is different since the food is to be prepared in front of the customers. There is no communication with the chef who cooks the food directly. The customers just watch the food being prepared. The step in which the customers receive the food and eat it is typical of any ordinary restaurant. The major difference, therefore, is in the chef preparing the food in front of the customers instead of the people waiting for the food while the chef prepared it in the kitchen.

Compare and contrast Benihana’s cost structure with a typical sit-down restaurant.

The overall costs for Benihana were lower than that of the other restaurants in the industry. This was because Benihana did not offer many varieties to its customers. The raw material cost was 30% as compared to the industry standard of 38-40%. This gave Benihana a cost advantage over other restaurants that offered variety. Benihana instead, differentiated itself from the competition by its food preparation specialty. Also, the beverage's costs were lower than typical sit-down restaurants. 20% of the sales were the cost of beverages while the industry average was 25-30%. The labor cost was 10%, and that of a typical restaurant was 30-42%. The operating expenses of renting were 5-7% since the space occupancy was low. The reason was fewer space required in the kitchen since the food was prepared in the dining area. The typical restaurant average was 4.5-9%. One factor which was higher in cost than the others was advertising. Benihana spent 10% on advertising as compared to 0.75-2% in other restaurants. One other factor which was higher was the construction costs which were due to the customized setting because of the differentiated services.

What is the Benihana concept?

The concept of the restaurant is a casual experience in dining. The other essence of the experience is the Japanese atmosphere. The furniture, paintings, and food are Japanese which is a part of the restaurant’s concept. The services are personalized since the cooking is done in front of the customers by a personalized chef. The operational perspective is that the restaurant works on the maximization of the production model in batches. Also, the perspective is that the cost is lowered, and efficiencies are maximized to get increased revenue. The flow diagram can be regarded as processes; the standardization of the menu with shrimp, steak, and chicken, and only three forms of the main dish.

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