IntroductionBenihana is primarily a steakhouse

employing the ‘Hibachi’ style of cooking.It uses authentic Japanese ingredients and

décor.Opened in 1964, it operated 15 units across

the country ( of which 5 were franchises) by 1972.

Initial StrategyIntroduce of Hibachi to:

Provide greater attention and service to the customer while still keeping costs low.

Increase the proportion of the productive area.• Limit the main menu to 3 entrees to reduce

wastage and cut costs.• Insist on historical authenticity.

The LearningsFranchising created many problems and with

the threat of replication not significant the practice was stopped.

Greater proportion of space required for the bar. This was incorporated in the later restaurants.

Operational StrategySelected high traffic sites in business

districts for setting up a restaurant.Brought in highly trained chefs from Japan.Provided good incentives to the employees

and created a connect with them helping reduce the employee turnover.

Broke up larger goals into a series of smaller goals.

Created a structure for monitoring and control.

Marketing StrategyInvested heavily 8-10% of gross sales on

marketing. Promoted the entire Benihana experience.Used outstanding visuals and offbeat themes.Employed considerable amount of market

research.

AnalysisStrengths

Exceptional quality of food. Substantial repeat business (65.7%). High number of recommendations and word of

mouth publicity (67%). Benihana model difficult to replicate. Simple model leading to greater efficiency and

resource utilization.

Analysis (Contd.)Weaknesses

Reliance on the skill of the chefs, is thus more people oriented than process oriented.

Expansion plans constrained by limited resources.

Model less suitable for expansion into retail segment.

Several aspects of the Benihana experience e.g. atmosphere, service still to catch up with food in terms of appeal.

Observations8-10% of revenue spent on ads while only

16.5% new customers discover Benihana through ads. The advertisement spend thus not justified.

Contrary to Rocky’s belief the clientele is evenly spread across different income and age groups.

The potential market is thus very large.

RecommendationsBenihana primarily sells on the strength of its

food products. It reduces wastage through its simple menu.The potential market is huge yet there are

resource constraints in scaling up. The ad spend could be reduced or reworked

to increase efficiency. Large scale retail of processed food products

could affect quality.Could be pursued under a separate brand.

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