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The Benihana of Tokyo case study looks into the development of a chain of "theme" restaurants. It discusses the production process in Benihana as compared to that of a typical restaurant.
W. Earl Sasser Jr.; John R. Klug
Harvard Business Review (673057-PDF-ENG)
October 31, 1972
Case questions answered:
- What is Benihana of Tokyo selling? Is it food, atmosphere, hospitality, a watering hole, or what? Is having entertainment in the lounge consistent with the overall image? All the advertising emphasizes the chef and the food but is that really what the public comes for?
- How do you hedge your bets? Is Benihana at the forefront of a trend of the future with their limited menu, cooking in front of you, and Japanese atmosphere, or is it just a fad?
- How is the Benihana production process different from that of the regular restaurant? What changes have Benihana implemented as compared to a regular restaurant?
- What is the Benihana concept? What is the value proposition of Benihana? How is Benihana different from your everyday restaurant experience?
- How is the cost structure different at Benihana as compared to other restaurants?
- How has Benihana managed to keep its labor motivated by doing the same thing, again and again, every night?
- What are the differences between the production process of Benihana of Tokyo and that of a typical restaurant?
- Examine the production system in detail. What are the major design choices which generate operating efficiencies?
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Case answers for Benihana of Tokyo
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1. What is Benihana of Tokyo selling? Is it food, atmosphere, hospitality, a watering hole, or what? Is having entertainment in the lounge consistent with the overall image? All the advertising emphasizes the chef and the food but is that really what the public comes for?
There are Five Product Levels in marketing – core, basic, expected, augmented, and potential. The core products for Benihana are ‘food’ and ‘beverage’.
The menu for Benihana was limited to three offerings – chicken, soup, and shrimp. Also, Benihana’s core product offers its augmented product in the form of ‘hospitality’ and ‘Japanese ambiance’ (Hibachi Table Arrangement & Japanese Interior). This added a lot of value to its customer experience.
We can infer the satisfaction level of customers through the respondents to the questionnaire. The restaurant’s atmosphere persuaded about 13% of the respondents to come to the place, and also, 13% of the respondents highlighted that atmosphere was a key factor for their satisfaction.
The USP of Benihana of Tokyo is that it allows its customers to watch its chef while the chef cooks the food. Thus, it sort of makes the cook look like a performing artist.
Furthermore, it serves its three-item menu on the Hibachi Table in a Japanese ambiance (interior).
2. How do you hedge your bets? Is Benihana at the forefront of a trend of the future with their limited menu, cooking in front of you, and Japanese atmosphere, or is it just a fad?
Benihana of Tokyo is a well-thought-out business idea that gives a unique experience to its customers. The customers are welcomed with a specially created bar/lounge area.
After that, they are taken to the ‘Teppanyaki’ table. This was the show-stopper for the business. The customers would place the order, and the chefs would come and prepare it in front of them.
The chefs were the most important asset for the restaurant. They were young, trained professionals who cooked authentic Japanese food.
Apart from the food, Benihana’s décor was that of a traditional Japanese set-up. The wall, ceiling, artifacts, light were imported directly from Japan. Benihana has successfully understood how to deliver a cultural experience without making its American customers feel unsafe.
It is neither a fad nor a trend. Benihana has the option of expanding only if it gets funds from external sources.
Other factors can limit its expansion plan. Namely, the restaurant has only two carpenter crews, it may face a shortage of chefs and trained staff, the minimum amount to open a new unit is $300,000, and Benihana can only open five units a year.
Benihana also doesn’t consider franchising because of a lack of experienced (in the restaurant business) investors, shortage of Japanese staff, and lack of full control and autonomy.
Instead of setting up new units, Benihana of Tokyo can look to…
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