BUS MGMT 711

Benihana of Tokyo by Group ? Benihana of Tokyo Case Analysis by Group 5

September 27th, 2011

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Recommendation Analysis of Benihana shows that the following actions should be taken in order to increase the markets and demographics which they can cater to: Restructuring the restaurant flow as follows:ed o Changeing the seating setup so that more seats surround a cooking area which can serve multiple groups at one time so that the chefs downtime is kept to a minimum. o Have multiple cooks behind each cooking area so that patrons have quick service and turnover time is kept low. Change marketing strategies to all age groups, emphasizing the excitement and swiftness that Benihana delivers. Problem Currently, management feels constricted in expanding into second-tier cities due to the substantial minimum costs associated with opening a new location. The current operations structure of Benihana of Tokyo make it very difficult for the company to expand into smaller markets at which they would serve smaller and less predictable groups. In addition to not being able to expand into smaller markets, Benihana is finding it fairly difficult to attract the a younger generation into their restaurant. The current work flow at Benihana requires that a group of seven to eight people are seated at a table before cooking can even begin. This setup creates a wait for people who come in as smaller size groups, which in return can cause a much slower turn over. Every seat at the hibachi table is potential revenue and when those seats are vacant the restaurant will lose money. The current setup of the restaurant does not accommodate the unpredictable influx of patrons. In a busy downtown scenario where patrons are constantly flowing in the door, it is easy to have them wait five to ten minutes until the right combination can fill a hibachi table.; Uunfortunately, this is not the case in a smaller market, wherebyand wait times would drastically increase or seats would go unfilled due to smaller traffic. In addition to not having the setup to cater to small, unpredictable groups, Benihana is having a hard time attracting athe younger clientelegeneration. This market segmentgroupgeneration can drastically increase business, and not being ablethe inability to persuade them to come to Benihana is lost revenue. Implementation In order to move into smaller markets a redesign of the restaurant is necessary to tolerate the unpredictable influx of patrons. Current design shown in Exhibit 1 shows how that when smaller groups of three to five people come in, it can leave seats difficult to fill or unoccupied unless the perfect size group also comes in at the same time. With the new setup, also shown in Exhibit 1, multiple groups of different sizes can come in and still receive the same service that they would have coming in as a large group at the previous design. The work flow of the smaller market Benihana would be much the same as that of the larger market Benihana. Patrons would enter the restaurant where they would be greeted by the front men. After they are greeted they could either wait to be seated at a hibachi table or enter into the lounge area. Once seated at the hibachi table the waitress would take drink and entre orders. In the larger market setup the chef would then come out with his cart of food which has been mostly prepped in back and begin his show. He would cook and then personally serve each patron, giving each table a great deal of attention. Unlike most restaurants, Benihana delivers that undivided attention to each table, as opposed towhere other restaurants where, each waitress has to serve four or more tables and the patrons do not even get to meet the chef. The smaller market Benihana would still try to give that undivided attention to the table, but instead of a single group it would be multiple smaller groups seated around one hibachi table. In the event Page 1 of 5

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Benihana of Tokyo by Group ?

September 27th, 2011

that the table could not be filled around, the chef can just start to cook a few groups orders or even a single groups order so that the downtime would be minimized for the chef. This will allow for quick and dedicated service even when business is unpredictable. In addition to keeping customers flowing through the restaurant, Benihana wants to attract younger customers. Benihana is known for their unorthodox marketing techniques and there will always be that an atmosphere of entertainment. This atmosphere will help to attract customers, especially those of a younger generation which are currently missing from BenihanaBenihana needs to capitalize on this image in order to attract younger patrons. In order to do this, Benihana should market its advertisements to young professionals and college-aged adults. Its current nontraditional advertising already gives it an edge, it is just a matter of getting the brand message specifically to those groups. Additionally, these advertisements should emphasize the larger bar areas available in order to emphasize Benihana as an experience rather than just a restaurant.. Additionally, increasing advertisements and targeting younger kids and teenagers will help bring families into the restaurant. The entertaining atmosphere is already at Benihana, so they must focus on first getting them to try Benihana with the hopes that once they experience the unique environment of a Benihana restaurant, they will want to come back. but getting everyone involved is what will bring those kids and families back. Analysis of Current Operations and Risks of New Operations Benihanas operation ratios can be seen in Exhibit 2 and even though the ratios are from 1968 some clear differences can be seen between theirs and those of restaurants from California. California restaurants are a reasonable comparison as they have multiple large cities that are considered a large market for any restaurant. When comparing the ratios from California restaurants in 2008 to those of Benihana in 1968 the largest difference is the payroll expenses. We can see that the payroll expenses are slightly greater for Benihana. This most likely can be attributed to the fact that they must pay multiple skilled chefs instead of a couple chefs with some help and wait staff. All other aspects of the operating ratios are almost identical so it is important for Benihana to control the payroll expenses. In order to succeed in a smaller market, these labor costs must be highly scrutinized. It is important to note that these higher labor costs are the reason Benihana is so unique and why each table getsreceives that undivided attentionattention a more personal experience. In large markets it is easy to keep staff constantly busy with a constant stream of customers, but in a smaller market it would be much more difficult to always keep them cooking. It would be important in a smaller market to keep the minimum amount of staff on hand, especially those who are more highly paid, like the chefs. The redesign of the seating would allow for more odd- sized groups to be served at the same time but it would take much more coordination to make sure patrons are all seated in an efficient matter that would maximize the number of patrons per chef, but while not keeping them waiting for long periods of time. In smaller markets it is more difficult to predict when customers are going to come in and in what sizes they will be arriving. Attracting as many people as possible would only help Benihana succeed in a new market so they must attract as many demographics as possible. Of those demographics, the younger generation may be one of the most important. Being able to attract families into the restaurant and making them want to come back again and againreturn will help Benihana be most successful. Currently Benihana has issues attracting younger generations and without them their success will be difficult. Conclusions Benihana has been very successful in large cities and markets where they can attract a large amount of customers on a daily basis. In order for Benihana to expand, they need to find a way into smaller markets and can do so by marketing to families and younger generations with their excitement filled atmosphere. By revamping the layout of the restaurants and the way they do business, it is possible for Benihana to be very successful in a small markets. Page 2 of 5

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Benihana of Tokyo by Group ?

September 27th, 2011

Exhibit 1 Layout of Hibachi tables at Benihana and Proposed Layout for Small Market Benihana

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Table Layout of a Hibachi table at Benihana

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Proposed layout for Hibachi table at a smaller market Benihana

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Benihana of Tokyo by Group ?

September 27th, 2011

Exhibit 2 Comparison of Operating Ratios for Benihana and California Restaurants

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Operating Ratios for Benihana (1968)

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Operating Ratios for California Restaurants (2007)

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Works Cited Sasser, W. Earl. "Benihana of Tokyo." Harvard Business School (2004): 1-17. Print. Walker, John R.. "The restaurant: from concept to operation - John R. Walker - Google Books." Google Books. Version 5. John Wiley & Sons, Inc., Web. 24 Sept. 2011. <http://books.google.com/books>

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