Description
development of a chain of "theme" restaurants. The student is asked to evaluate the current operating strategy and suggest a long-term expansion strategy
“Compromise between quality and affordability is not always required”
BENIHANA
Excellence in Service Operations
• A steak house with a difference – food is prepared in front of the customers. • Ambience is of authentically detailed Japanese country inn. • Started in 1935 in Tokyo, Japan. • By Yunosuke Aoki. • Named after wild red flower which grew at its entrance.
BENIHANA in US
• Started by Hiroki Aoki ( rocky ) in 1964. • Rocky Aoki enrolled himself in School of Restaurant Management and did an extensive research on US restaurant market. • From the research he concluded that :
– Americans enjoyed eating in exotic surroundings – Enjoyed watching their food being prepared.
BENIHANA in US
• When the first Benihana opened in 1964, Japanese cuisine was unknown to the United States and the idea of having a chef prepare a meal at your table was completely unheard of. • First Benihana opens in New York. • Introduced hibachi table concept in response to rising cost and increased competition.
Customer Experience BENIHANA
• Did you like Benihana? • What did you (not) like in Benihana?
• What did Benihana sell you?
– Product or Service? – Compared to other restaurants?
– Food, entertainment, environment, variety?
What does Benihana sell?
• Food
– 46.7% go for food – 77.9% say food is excellent
– Emphasis on showmanship – Opportunity to see food being cooked by skilled Japanese chef • Preparation second-most highlighted aspect – 63.2% said the atmosphere was excellent – Hibachi cooking method
• Entertainment
• High % of Repeat Customers & Word of Mouth
Benihana Philosophy
“My philosophy of the restaurant business is simply to make people happy. We do it many ways at Benihana” -Rocky Aoki “For a restaurant to succeed it must be distinctive enough to bring customers through the doors for the first time and good enough to keep them coming back. Benihana redefined success when it introduced its totally new concept of "eatertainment" dining to the New York restaurant scene.” www.benihana.com “With wisecracking, fast-chopping chefs, the restaurants provide part theater, part fine dining experience.” Hoover’s Online 2003
COMPETITIVE PRIORITIES
• Cost
– low cost operations
• Quality • Time
– Consistent quality
– Fast delivery
BENIHANA’s LAYOUT
Benihana Floor Plan
Customer Flow
Customers Arrive (in batches 1, 2, …N) 1 2 Drink 3 Table Sit, order, 1st course, 2nd course, …dessert, pay Sit, order, 1st course, 2nd course, …dessert, pay Sit, order, 1st course, 2nd course, …dessert, pay
Batch Size=8
14
Sit, order, 1st course, 2nd course, …dessert, pay
Bar
Dining Hall
Customers Leave (in batches close to 8)
Material Flow
1 Customers Arrive (in batches 1, 2, …N) 2
Table 1
Table 2
Table 3
Bar
Drinks
14
Table 14
Dining Hall
Suppliers
Materials Preparation
Pre-Packed Batches for Trolleys
Back Kitchen
Process Flow
TABLE PRESENATION
BENIHANA Concept
BUSINESS MODEL
• Food Service Process
? Batching of customers ? Discourages conversations on table – faster turnaround ? Watching your food cook may increase appetite ? Unfamiliar food served in familiar environments ? Waiter/waitress doesn’t travel between table and kitchen - reduces time
BENIHANA CONCEPT
• Food Production Process
? Drinks before meal leads to higher revenue ? Food prepared before customers ? Limited menu - limits the preparatory work forces people to order quickly ? Order cannot be changed after chef comes limits raw material usage/wastage
? Chef works quickly to impress customers paces the meal (chefs are also encouraged to push customers out)
COST ANALYSIS
Benihana
• Labor Costs • Food Costs • Bevge. Costs • Rent 10-12% 30-35% 20% 5-7%
Other
30-35% 38-48% 25-30% 5-9%
• Promotion Exp.
• Construction
8-10%
higher
0.75-2.0%
lower
OPERATIONS
• Labor Cost Ratio: Why is it lower?
– More productive chefs – bring the food, cut it, cook it, and serve it! They even clean up! – No advance prep of food – no time wasted for chef – Restaurant requires fewer waitresses/bus boys
• Food Costs Ratio: Why is it lower?
– Limited menu - Standardization – Easier forecasting because of limited choices leads to lower inventory and less wastage – Higher volume of fewer variety of materials ? volume discounts in procurement
OPERATIONS
• Beverage Cost Ratio: Why is it lower?
– Simple drinks with cheap ingredients (rum, vodka, etc. Not scotch and bourbon) – Exotic drinks (in name only?) with watered alcohol
• Rent Ratio: Why is it lower?
– Benihana allocates more floor space (78%) to direct customer service activities which generate sales – Communal dining fills all seats; a couple can’t occupy a big booth
OPERATIONS
• Advertisement: Why is it higher?
– Marketing Issue: Have to overcome general perception about Japanese food (in the 70’s – stinky, fishy, oily) – Is it fair to compare Benihana’s advertisement costs to other restaurants?
• Rocky sells more than food • Ads don’t even contain the “R” word • Benihana is trying to sell entertainment. For the entertainment industry the advertising cost ratio is much higher!
OPERATIONS
• Customer selection: – Which customer segment? – “Right now we cater to a middle-income audience, not the younger generation. That makes a difference. We charge more, serve better quality, have a better atmosphere, and more service”
– Rocky, speaking on diversification, tells how he targets a customer base that suits Benihana’s strengths.
ADVERTISING POLICY
• Substantial investment in creative advertising public relation and market research. • Adds characterized by a bold headline statement and illustration. • Promoted themselves as a place to get wholesome, familiar food with unusual unique and delicious preparation served in a fun atmosphere. • Adds for full pages in national publications.
EXPANSION PLANS
• Opening only 5 units a year.
• Confining to major cities. • Tie up with Hotels. • Planning to go public. • Franchising.
LEARNINGS
• New, Authentic and Quality product.
• Customer satisfaction.
• Extensive market research.
• Maintaining low cost processes offers competitive advantage .
• Space utilization is another important aspect for an efficient business process. • Management control is very important for success .
PRESENT SCENARIO
• 56 owned & 22 franchised restaurants.
• Now operations are divided into 8 geographic regions.
NEW CONCEPTS
• Haru – Offers distinctive Japanese Fusion in a high energy, urban atmosphere. • RA Sushi – Offer sushi and pacific-rim dishes in a fun-filled, high energy environment. • Doraku – Offers sushi as well as Japanese entry items.
BENIHANA in US
doc_456817688.pptx
development of a chain of "theme" restaurants. The student is asked to evaluate the current operating strategy and suggest a long-term expansion strategy
“Compromise between quality and affordability is not always required”
BENIHANA
Excellence in Service Operations
• A steak house with a difference – food is prepared in front of the customers. • Ambience is of authentically detailed Japanese country inn. • Started in 1935 in Tokyo, Japan. • By Yunosuke Aoki. • Named after wild red flower which grew at its entrance.
BENIHANA in US
• Started by Hiroki Aoki ( rocky ) in 1964. • Rocky Aoki enrolled himself in School of Restaurant Management and did an extensive research on US restaurant market. • From the research he concluded that :
– Americans enjoyed eating in exotic surroundings – Enjoyed watching their food being prepared.
BENIHANA in US
• When the first Benihana opened in 1964, Japanese cuisine was unknown to the United States and the idea of having a chef prepare a meal at your table was completely unheard of. • First Benihana opens in New York. • Introduced hibachi table concept in response to rising cost and increased competition.
Customer Experience BENIHANA
• Did you like Benihana? • What did you (not) like in Benihana?
• What did Benihana sell you?
– Product or Service? – Compared to other restaurants?
– Food, entertainment, environment, variety?
What does Benihana sell?
• Food
– 46.7% go for food – 77.9% say food is excellent
– Emphasis on showmanship – Opportunity to see food being cooked by skilled Japanese chef • Preparation second-most highlighted aspect – 63.2% said the atmosphere was excellent – Hibachi cooking method
• Entertainment
• High % of Repeat Customers & Word of Mouth
Benihana Philosophy
“My philosophy of the restaurant business is simply to make people happy. We do it many ways at Benihana” -Rocky Aoki “For a restaurant to succeed it must be distinctive enough to bring customers through the doors for the first time and good enough to keep them coming back. Benihana redefined success when it introduced its totally new concept of "eatertainment" dining to the New York restaurant scene.” www.benihana.com “With wisecracking, fast-chopping chefs, the restaurants provide part theater, part fine dining experience.” Hoover’s Online 2003
COMPETITIVE PRIORITIES
• Cost
– low cost operations
• Quality • Time
– Consistent quality
– Fast delivery
BENIHANA’s LAYOUT
Benihana Floor Plan
Customer Flow
Customers Arrive (in batches 1, 2, …N) 1 2 Drink 3 Table Sit, order, 1st course, 2nd course, …dessert, pay Sit, order, 1st course, 2nd course, …dessert, pay Sit, order, 1st course, 2nd course, …dessert, pay
Batch Size=8
14
Sit, order, 1st course, 2nd course, …dessert, pay
Bar
Dining Hall
Customers Leave (in batches close to 8)
Material Flow
1 Customers Arrive (in batches 1, 2, …N) 2
Table 1
Table 2
Table 3
Bar
Drinks
14
Table 14
Dining Hall
Suppliers
Materials Preparation
Pre-Packed Batches for Trolleys
Back Kitchen
Process Flow
TABLE PRESENATION
BENIHANA Concept
BUSINESS MODEL
• Food Service Process
? Batching of customers ? Discourages conversations on table – faster turnaround ? Watching your food cook may increase appetite ? Unfamiliar food served in familiar environments ? Waiter/waitress doesn’t travel between table and kitchen - reduces time
BENIHANA CONCEPT
• Food Production Process
? Drinks before meal leads to higher revenue ? Food prepared before customers ? Limited menu - limits the preparatory work forces people to order quickly ? Order cannot be changed after chef comes limits raw material usage/wastage
? Chef works quickly to impress customers paces the meal (chefs are also encouraged to push customers out)
COST ANALYSIS
Benihana
• Labor Costs • Food Costs • Bevge. Costs • Rent 10-12% 30-35% 20% 5-7%
Other
30-35% 38-48% 25-30% 5-9%
• Promotion Exp.
• Construction
8-10%
higher
0.75-2.0%
lower
OPERATIONS
• Labor Cost Ratio: Why is it lower?
– More productive chefs – bring the food, cut it, cook it, and serve it! They even clean up! – No advance prep of food – no time wasted for chef – Restaurant requires fewer waitresses/bus boys
• Food Costs Ratio: Why is it lower?
– Limited menu - Standardization – Easier forecasting because of limited choices leads to lower inventory and less wastage – Higher volume of fewer variety of materials ? volume discounts in procurement
OPERATIONS
• Beverage Cost Ratio: Why is it lower?
– Simple drinks with cheap ingredients (rum, vodka, etc. Not scotch and bourbon) – Exotic drinks (in name only?) with watered alcohol
• Rent Ratio: Why is it lower?
– Benihana allocates more floor space (78%) to direct customer service activities which generate sales – Communal dining fills all seats; a couple can’t occupy a big booth
OPERATIONS
• Advertisement: Why is it higher?
– Marketing Issue: Have to overcome general perception about Japanese food (in the 70’s – stinky, fishy, oily) – Is it fair to compare Benihana’s advertisement costs to other restaurants?
• Rocky sells more than food • Ads don’t even contain the “R” word • Benihana is trying to sell entertainment. For the entertainment industry the advertising cost ratio is much higher!
OPERATIONS
• Customer selection: – Which customer segment? – “Right now we cater to a middle-income audience, not the younger generation. That makes a difference. We charge more, serve better quality, have a better atmosphere, and more service”
– Rocky, speaking on diversification, tells how he targets a customer base that suits Benihana’s strengths.
ADVERTISING POLICY
• Substantial investment in creative advertising public relation and market research. • Adds characterized by a bold headline statement and illustration. • Promoted themselves as a place to get wholesome, familiar food with unusual unique and delicious preparation served in a fun atmosphere. • Adds for full pages in national publications.
EXPANSION PLANS
• Opening only 5 units a year.
• Confining to major cities. • Tie up with Hotels. • Planning to go public. • Franchising.
LEARNINGS
• New, Authentic and Quality product.
• Customer satisfaction.
• Extensive market research.
• Maintaining low cost processes offers competitive advantage .
• Space utilization is another important aspect for an efficient business process. • Management control is very important for success .
PRESENT SCENARIO
• 56 owned & 22 franchised restaurants.
• Now operations are divided into 8 geographic regions.
NEW CONCEPTS
• Haru – Offers distinctive Japanese Fusion in a high energy, urban atmosphere. • RA Sushi – Offer sushi and pacific-rim dishes in a fun-filled, high energy environment. • Doraku – Offers sushi as well as Japanese entry items.
BENIHANA in US
doc_456817688.pptx