Benihana Case Essay Example

into agreement producing Benihaha food products under retail sales. The firm is also expanding its customer group by appealing to the younger generation. Quick service seemed to be a good test out idea. Value stream Benihana of Tokyo has many unique qualities that make it extremely profitable and very efficient. The processes used in running the business are like that of no other restaurants. They ensure that quality control is to the maximum level possible and that the profit and value of the company is never diminished and always profitable.

The intricacies of the business operations are what make the value in the company evident and vital to the ability of the company to have capacity utilization. Without the specific steps of the Benihana process, Benihana of Tokyo would be unable to be such a popular and successful business as it has been in the past and will continue to be in the future. The method adapted to Benihana by the founder, Hiroaki (Rocky) Aoki, which was adopted from his father’s chain of restaurants sets the tone for the Benihana known today.

These steps are what led to the opening of several Benihana restaurants throughout the world and to the expansion that the restaurant has had within different sectors of the food industry. The value of the company began with the creation of the original Benihana of Tokyo restaurant in Japan, by Yunosuke Aoki, in 1935. This Japanese restaurant chain would be vital in the creation of the chain that is ever so popular in the United States, as well as the rest of the world. The original Benihana was the restaurant that

laid the groundwork for Rocky to build an empire of Japanese restaurants.

The way the business was operated by Rocky’s father is what inspired Rocky to run his business differently than any other restaurateur had previously done in any other conventional restaurant of the time. The concepts that the elder Aoki had brought to his restaurant inspired his son to not only borrow the concepts for his own use in the creation of his own Benihana, but also expand on these concepts and create his own concepts that would be added to the Americanized version of his father’s restaurant, which in turn created extreme value for the business.

The adaptation and adoption of these concepts is what turned Benihana of Tokyo into such a “rock star” in the restaurant business and food industry. It also led to the imitation of the company, but unfortunately for them and fortunately for Aoki, the imitators were never able to truly grasp the true concepts implemented in the Benihana operation and service to its’ customers. In 1958, due to increased cost and competition, Aoki integrated the Hibachi table concept into the dining operation and experience.

By doing so, the cost of operations decreased because there was now a lack of necessity for an extra workforce in the restaurant to run between the kitchen and dining hall. On top of decreasing costs (labor was 10-12% of gross sales), the hibachi tables added value to the restaurant as well as the Benihana customer experience. The newly earned value was due to the fact that now, more attention was provided and given to the customer by the specialized chefs.

As there were no longer any servers, in the traditional ense of a restaurant, there was no longer a gap between customer and chef with the traditional kitchen layout. The chef was now directly in front of the customer to provide entertainment and a wonderful dining experience. This gave the customer an extra sense of appreciation from the restaurant as well as satisfying the customers’ want for an excellent dining experience. A customer that has a wonderful dining experience is a customer that is happy, and a happy customer is ideally a repeat customer, which is value added to the business.

The altered dining room not only allows for great entertainment, but also allows for maximum use of the space. Because there is no traditional kitchen, less space is occupied by large cooking machinery, such as ovens and stoves. The customers are seated at the hibachi table, which allows for the maximum number of tables to be introduced. In this case, the more hibachi tables there are, the more seating is available for the customers to sit, which means there are more orders being placed and more food being bought and sold.

By cutting the back of the house area by 8%, the dining room increased by 8%. This additional room for customers only adds value because it increases the revenue that the restaurant makes by being able to sit more people at any one given time, than they would if the kitchen was built in the traditional manner of a restaurant. Benihana also cut down portion sizes in order to get a faster customer turnover, because the faster the customer eats, the

faster they leave and the faster they allow another customer to take their place.

The better the customer turnover, the more sales and revenue are generated. In utilizing the restaurant space as much as possible for positive return, Aoki had come to the decision to make the bar larger in each of his next two restaurants. By doing this more people could sit at the bar for a drink before lunch or dinner. An increased number of bar customers led to an increased number of revenue at the bar, which increased the profit made overall. As well as increasing profit, more people could now wait for a table while another group finished their meals.

This was quite important because more customers could be seated while waiting. Because customer turnover was at most one hour, and there were several tables seated throughout the day at different periodic times, the wait time for a bar customer was very little. By the time the customer would finish with one drink, they could usually be seated and ready to eat. Therefore there was a constant flow and cycle of customers and movement from bar to table to exit. Waste is also an issue in the restaurant business.

By implementing a limited menu of steak, chicken, and shrimp, Benihana is able to cut costs by 3-13%, which allows for a limited number of supplies necessary at any given time. This allows the restaurant to order fresh food on a routine basis and provide customers with the freshest food available, which adds value to the business. The value added by the cut of loss is also very important

to running a profitable business, in any industry, but especially in the restaurant business, where regular loss of product can lead to the loss of thousands of dollars in a year, which can be quite significant to owners/investors.

Rocky felt that in order to keep with the tradition his father had set in the original Benihana of Tokyo restaurants, that the decor had to be as authentic as possible, and in order to be as authentic as possible, the decor had to be authentically from Japan and imported to the restaurant and built and put together by a crew of Japanese carpenters used by the elder Aoki in the creation of his Benihana years earlier.

The authenticity of the restaurant is extremely important in the creation of an excellent ambience for a customer that is entertained by the exoticness of another culture, which are the American customers and the Japanese heritage. Although this is an extra expense that may be seen as unnecessary by many, authenticity is something that makes for an excellent experience, and the extra expense may be well worth it because the experience given to the customer can ultimately create a repeat customer. In Aoki’s case, the extra expense was certainly worth it because it helped in creating such a successful business.

Benihana also implemented different marketing tactics and increased value with an increased budget, as compared to other restaurants, for advertisements. By investing nearly 10% of its gross sales on promotion, Benihana succeeded in attracting different customers from different aspects of life. Although they were initially situated in a commercial area with plenty of foot traffic, and predominantly

in business areas, the reach of the advertisements did make it to many other customers because they did not advertise in usual places restaurants would.

They also never used the word restaurant and based their attraction on the idea of the experience to be had while at Benihana. Along with the many value-added decisions made by Aoki, there are many others that may not have necessarily created value, but were necessary to bridge a gap between some of the other steps. For example, there were 30 plus oriental employees, which although adds to the experience, also adds to cost.

Because they were oriental, they were also specially trained to deal with mostly American customers, who are different from the Japanese customers. These specialized employees were treated very well and paid well. No added value, yet they are necessary for Benihana to work efficiently. Many of the servers also served as managers in training because they were trained for use as managers in the future, however because of the little employee turnover, the specialized training given to the employees was sometimes not necessarily actualized for many years.

In such case, employees must have continuing education, paid for by the restaurant, which although is not a loss is not necessarily value-added because to realize the value, several years must pass. Benihana also went into many different aspects of the business, which had not created any value as of yet but can create value in the future, such as the idea of mixing Japanese and Chinese cuisine and also having a line of frozen processed foods for mass sales.

These ideas can help to

create an even larger empire of restaurants and create the value necessary to reach out to many other audiences. By also making attempts at spreading the business to other regions including suburbs and different countries, Benihana is making themselves more public than ever before. This allows them to reach a new customer base while still catering particularly to their original customers.