Benihana of Tokyo

Case analysis
Q1) Assume that the dinning process takes 60 minutes; can we calculate the cycle time of a
dinner?
Answer: If the dining process takes 60 minutes, the dining room of 112 seats would fill is already
full which is an assumption, so the cycle time for a batch of eight customers would free the table
by every 4.2 minutes.
Q2) how many minutes do customer have to wait in the cocktail lounge on a busy night?
Answer: On a busy night a customer that have to wait for about 30 minutes in the cocktail
lounge, as the dining process would take about 30 minutes on a busy night.
Q3) Are the financial statements of Benihana attractive? Assume the Chicago unit cost $300,000
to renovate as a Benihana unit. What are the returns on this investment?
Answer: The financials of Benihana are very attractive; Chicago unit is the largest money maker
with margins of 41%. An investment of $300,000 would be paid back in 6.8 months.
Sales

1.3

-cogs

0.39

Gross profit

0.91

Less operating expense

Labor

0.13

Advertisement 0.13
Management

0.052

Rent

0.065
0.377

Net profit

0.533

Margin

0.41 (0.533/1.3=0.41)

Payback

6.8 months

Q4) Can the Benihana concept be copied? What are the barriers to entry?
Answer: In 1970 several groups had attempted to imitate Benihana concept but all were failed to
do that as one of the major barrier was retaining the staff as in Benihana staff and chef are
considered to be key to success and there is a Japanese paternalism in Benihana versus the rigid
hierarchy based structure in other restaurants.
Question5) What are the real risks for benihana?
A.

Diversifying too quickly

B.

Losing control over cost

C.

Lack of management talent at top for growth

D.

Rocky! Dillettante

E.

Danger they will become training center of chefs for imitators

Answer:
1) Firstly the lost over the cost was making an issue in the company. It is not compulsory to
use the artifacts, materials and chefs from Japan. These are available in America so can
be purchased from there.
2) The chefs who come from Japan are trained in benihana. So after training they can work
for imitators or other hotels that can be dangerous.
3) There is a lot of diversification in the company like making strategy of attracting younger
people, combining Chinese-Japanese etc.
4) Rocky was also investing in other businesses like broadway shows etc due to which he
was not properly focusing on the restaurants.