Benihana of Tokyo 1. What is the Benihana concept? Benihana of Tokyo illustrates the entrepreneurial venture of restaurateur Aoki Hiroaki.

Hiroakis aim was to introduce hibachi cooking in America. Prior to this, Americans did not hold Japanese cuisine in positive light as their former experiences with sukiyaki soup and raw fish was rather forgettable and not at all suited for the American taste buds. Thus Hiroaki went an additional mile to setup a fine dining restaurant that embodied the American spirit of fun and joy. He believed that while Americans were conservatives and not prone to random experiments with their food, they also enjoyed eating in exotic locales. This gave him the idea to tweak the quintessential American cuisine and serve a sumptuous and wholesome meal prepared in the traditional Japanese style. Hiroakis vision was to engineer an unforgettable dining experience for American citizens and encourage them to celebrate joyous occasions in the restaurants premises. The whole idea was that Benihana should have top of mind recall when potential customers thought of a place to relax and enjoy a hearty meal with their families. In order to make this American dream a reality, Hiroaki left no stones unturned and even adopted the nickname Rocky so that it would strike a familiar chord with the Americans. As a service oriented business, it is imperative to analyze Benihanas offering in the light of the service attributes: intangibility, variability, inseparability and perishability. Intangibility: Being a fine dining restaurant, Benihana strives to create memorable experiences for its guests. As a service industry, the output is intangible and hence the restaurant has to focus on producing the desired sensory stimulus within the customers. Firstly, Benihana focuses on making the intangible tangible by creating an authentic Japanese ambience. The core of the service was the dining area that comprising of the traditional teppanyaki table, surrounded by places to seat eight guests in two groups. A personal chef and waitress waited on these eight customers. This hibachi table arrangement and the lounge cum bars not only helped in cutting costs, it also generated the desired mechanics in terms of sights, sounds and tastes.

Another area where Benihana tried to achieve a competitive advantage was by focusing on the humanics aspect. Although, labor was one of the major cost centers for the restaurant, it fully acknowledged the role played by employees in engineering lasting experiences for customers through their interaction. Thus it imported chefs from Japan, who had to undergo a rigorous three week preparatory training and then learn Basic English skills in America. The training process was continuous and Benihana ensured that employee turnover was minimal was establishing employee friendly policies and procedures. The restaurants also roped in legendary American celebrities like the Beatles and Muhammad Ali in order to augment their publicity and create unforgettable memories by staging performances. In fact, the chefs too exude passion to satisfy the gourmands appetite and simultaneously juggle knives and forks skillfully to create an art that will mesmerize the customer. While the core offering remains providing guests lipsmacking dishes in a pleasing and hospitable ambience, Benihana has chosen to innovate the same by serving its guests in the traditional hibachi table. The founder is a visionary who never quits dreaming and is constantly in the search of taking the enterprise to newer heights.

Inseparability: In a restaurant business, customers are an integral part of the consumption process. The service engineering was conductive to create an epicurean experience for customers who had an exclusive chef and waitress serving every two tables and giving them their undivided attention and regaling them with stories and banter. Also, the teppanyaki table was equipped with an exhaust hood that would remove all unwanted smells and thereby not inconveniencing the guests. The employees also received intensive soft and hard skills training that would enable them to create customer satisfaction. Also, the restaurant chain was primarily dispersed across business sites and residential areas so that people on the lookout for a quick and tasty bite could drop into the restaurant during lunch and enjoy a relaxing dinner with family and friends. In order to augment the productivity, the restaurant was very meticulous in maintaining a time of service execution standard that ensured that on an average the waiting time per table

varied between forty five minutes to even one and a half hours, during exceptionally busy periods.

Variability: The perennial problem with most customer centric service industries is the heterogeneity in performance that can be very detrimental with regard to customer satisfaction. In order to curtail this, Benihana adopted two strategic measures. Firstly, although Benihana was on a growth spree, it refrained from tying up with franchisees. This was because the franchisees often failed in living up to Benihanas standards and creating quality experiences for its customers as well as its employee; a core strength that was the parent restaurants pride. Thus in order to reduce the degree of variability, Benihana created service blueprints and scripts that were diligently followed by all its employees. Although Benihana was a fine dining restaurant, it focused more on the atmospheric elements. The menu was simplistic and comprised of four basic items-steaks, fillet chignon, shrimps and chicken, which could be had singly or in combination with appetizers and drinks. The accompaniments were also standard and comprised of beans, sprouts, zucchini, onions and rice. This system not only helped in achieving standardization with regard to quality, it also reduced the percentage of waste substantially. The restaurant however emphasized on supreme service by dramatically cubing and trimming the meat in front of the customers and also serving the delectable dishes in an eye catching manner. Also, by limiting the number of items on the menu, the chefs were successful in maintaining quality. The customer satisfaction survey data divulged that majority of the customers were delighted with the excellent service, generous portions as well as taste and quality of the food served.

Perishability: Like most services, Benihana cannot store its offerings. The food has to be served fresh and hot else the restaurants credibility will be at stake. Thus the restaurant has to adopt yield management practices in order to stimulate the non-peak hour demand. Thus Benihana outlets are dispersed in all business and residential areas. During the inception period, it had been envisaged that Benihana would serve the lunchtime office crowd. However, over the years it has come to be a favorite dinner destination. Thus

Benihana offers smaller portions at lower costs to attract customers to lunch in its premises and thereby reduce its losses. Thus Benihanas strategy has been successful in attaining multiple objectives. It helps ensure proper capacity utilization, reduction in wastage and unwanted costs and also ensured customer and employee satisfaction. The approach adopted by the Japanese restaurant was novel in the sense that the employees were multi-taskers who chatted with the customers as the skillfully juggled cutlery and prepared unique and delectable dishes for its connoisseurs. This clever method ensured total customer satisfaction as they were not only involved in the process; they could also witness the selection of raw materials and preparation of hot, fresh food. Q2. How does Benihaha cost structure differ from that of a typical sit-down restaurant? Floor Area

A regular restaurants floor area is divided into three major zones- The storage, the dining area and the kitchen. The dining area is the revenue generating area. Conventionally, this area contributed to 70 % of the total area. By using the Hibachi table concept, Benihana was able to bring the kitchen to the dining area itself, increasing the overall floor area available for dining to 80% of the overall restaurant premise. Hence, this increased the overall revenue generation for the restaurant proportionally. The cost of rent is also significantly reduced by this concept. A typical restaurant in a business district pays 7-9% of the overall sales value for rent. In case of Benihana, the rent cost is reduced to 5-7%. Labour Cost

In America, the labour cost is quite high. To cut down costs on labour, Benihana recruited highly trained chefs from Japan and brought them to America after intensive training in English language and the American culture and norms. This training cost was a onetime expenditure, which enable Benihana to have cheap expert personnel for the long run. Also, the hibachi table concept allows Benihana to cut down on the cost of waiters, as only a team of two- a chef and a waitress, is able to cater two tables. Most restaurants dont have a chef, or a waitress, who serve only two tables at a time. That seems like an extremely inefficient ratio. In a regular restaurant,

one non-Japanese, non-imported chef, along with prep workers, might serve a whole restaurant, and a waitress might serve four to five tables simultaneously. Food Wastage

Food wastage accounted to 35-40% of the overall food sales in a typical sit down restaurant. Keeping the menu narrow- limited to only three entrees, and the hibachi table concept allowed Benihana to virtually have no waste products. Also, the limited menu kept inventory low and reduced costs of inventory management. Artefacts and Restaurant Ambience

Instead of buying artefacts from the market to decorate the interiors, Benihana employed a Best out of Waste strategy. They imported building materials from old houses in Japan after carefully dissembling them and shipped smaller pieces to the US where they reassembled by crews of Japanese carpenters. But because of this fact, the company could only open five units a year, thats as fast as the two crews of Japanese carpenters could work. Should Benihana grow? Benihana provides a unique experience to the customers where they see the preparation of food on their dining table. Benihana is positioned as a fine dining restaurant. One important factor to be taken into consideration for expansion of Benihana is that every year few stores should be opened. The current rate of opening of five restaurants per year will project right image in the minds of the customers as an exclusive place to have food. The restaurant should always go for opening up their own rather than open franchises. Benihana has constraints with carpenters who work in the restaurant to create traditional Japanese interiors. It even has more difficulty to hire Japanese staff due to lack of availability. Benihana can explore three main areas for growth. They include the places where it was not present initially. Secondly, it can target secondary markets to grow and finally, it can grow in suburbia. According to survey, 86.5% of the customers visit the restaurant are working professional and 59% of the total customer go to Benihana for dinner. The majority of working people live in

suburbs who would like to go to Benihana for dinner. The restaurant can focus on suburbs, which have a sizable working class professional to expand. The next-best option would be to open in primary places where Benihana is not present.