Benihana Case Analysis 614g4x

Operations Management Case Study: Benihana

Benihana’s effective operating system ed the hibachi-style dining concept; their model enabled the restaurant chain to focus its cost structure to exploit their competitive advantage over many typical American restaurants. Rocky Aoki designed a lean and effective operating system that allowed customers to “come in, be seated, have dinner, and be on his or her way out in 45 minutes” (Sasser, pp.3). To allow that to happen, Benihana was particular with their food selection, buying only steak, chicken, and shrimp as available entree options. The limited food offerings reduced the amount of inventory, making it easier to manage. As a result, there was a decreased amount of food wastage. After the food was procured, it was pre-prepped in the kitchen to expedite food preparation and reduce customer wait time. The workers in the kitchen purposely left a tiny amount of fat to allow the chef to display showmanship by removing and discarding the fat in front of the customer. In addition to the food selections, another important part of the ‘Benihana Concept’ was the hibachi table seating. The layout for hibachi seating featured the chef cooking directly in front of customers, thereby reducing the necessity of a large kitchen in the back of the restaurant. The hibachi dining style also increased attention to customers’ needs by providing direct interaction with the chef. The hibachi table arrangement also gave chefs the ability to remove American skepticism on the preparation of exotic foods by preparing the food in front of the customers, fostering customer comfort. The Benihana model cannot be described in its entirety without discussing the emphasis Rocky Aoki placed on the bar and lounge area. The bar/lounge operations worked simultaneously to the traditional Benihana model, where the emphasis was placed on food and customer experience. The lounge area was a place where people could be entertained and relax. Rocky Aoki’s innovative, trend-setting restaurant concept was highly successful due to many factors, including its optimal operational decisions. One principal reason for the prosperity of Benihana was its superior cost structure compared to traditional restaurants inefficient cost structure. In addition, Benihana had a bar or lounge in many of its properties, which on average ed for 30 percent of total sales (Sasser, pp.2). While Benihana did employ many tactics that were atypical of most American

restaurants, they did have a bar/lounge for the purpose of bolstering revenues and profit. This strategy aligned with the operations of many American businesses and consequently demonstrates that even though Benihana was cutting-edge in many facets, they also employed techniques utilized by many other restaurants. By employing a hibachi-style restaurant in which a majority of food production is done in front of customers, the need for a traditional kitchen, and thus extra square footage, is reduced. Maximizing room to seat diners while minimizing back-house square footage increased sales per-square-foot and profit margins. Also, by restricting menu offerings, the amount of wasted food was reduced which lead to decreased food costs whereas typical restaurants have the expenditure of discarded food. Steak, chicken, and shrimp were the main items on the menu. Contrarily, many American businesses offered numerous other items to its customers. Benihana’s limited selection substantially reduced their inventory costs; this was a competitive advantage over other restaurants that had to carry more inventories to their complicated menus. To demonstrate this point, Mr. Aoki stated he was able to reduce food costs by 3035% by following the approach of wasted food reduction (Sasser, pp.2). Finally, other competitive advantages for Benihana included: imported authentic restaurant design details (which created a unique dining atmosphere), extensive chef and employee training from Japanese employees (which correlated to superior service), commitment to employee well-being (which reduced turnover as well as hiring and training costs), and creative advertising in non-traditional mediums (to reach a wide spectrum of untapped customers). Mr. Aoki’s relentless pursuit of offering his customers a unique, authentic Japanese dining cuisine experience was Benihana’s competitive advantage. However, one could also argue that Mr. Aoki’s meticulous standard also hinders the restaurant’s future growth. We recommend Mr. Aoki to focus more of its operational resources to some of the restaurant’s bottlenecks: chefs brought from Japan, carpenter team capacity, authentic design and unique employee trainings.