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Problem Analysis

Statement of the Problem


What strategic measures should Benihana of Tokyo take in order to sustain future
growth?
There are three (3) underlying management issues and challenges that we can
identify in answering our main problem, these are the expansion constraints, franchising
issues, which happened to be one of the ways of expansion and lastly a threat in the
business operations model relative to the current customer and market behavior.
For franchising, investors have no knowledge of the Japanese culture and the
Benihana style of cooking thus eliminating the companys core value of authenticity on
each of these opened branches. In addition, most of the franchisees have minimal
experience on operating a restaurant business, which proved to be detrimental to the
franchises growth. This led Aoki to discontinue the program after years of implementing
it. Expansion was also an issue due to companys unwillingness to take the risk of
borrowing from financial institution, the scarcity of trained staff and limited productivity of
2 carpenters. In operations, there was an ongoing concern on the restaurants limited
menu variation as well as slow service option. Aside from this, cost for advertisement
and PR is eating a substantial amount of companys overall expense plus presence in
secondary market and markets outside US is non-existent.
Recommended Courses of Action:
After a thorough analysis of the problem, the group was able to identify
recommendations for each of the underlying management issues.
Expansion Constraints

The company should take funds from financial institutions in order to


further fuel growth. They must go public but Aoki should limit public stock
offerings to less than 50% so he would still has control of the company,
after all, the company has funds.
Instead of going into Franchising, the company might as well develop joint
ventures with International Hotel companies. Through this, they would be
able to reach out international market.
Developing different product value proposition would also cater to
different target markets. For younger generations that would opt for faster
service, the company might want to establish a new restaurant operations
model such as Benihana Fastfood theme where customers can dine-in,
opt to take out or order thru drive-thru. Through this, the company can still
preserve their original restaurant concept, which is with the
Hibachi/Tappanyaki table concept.

Operations

The company might want to create new menu variations like sushi, udon
and gyoza.
Allowing local chefs and staffs to hasten hiring process, thus reducing
recruitment cost.
All-you-can-eat concept can also be introduced in order to widen target
market.