Benihana of Tokyo Case Study

Submitted by - Group 3Aravind Joni (27NMP08) Anjali Khanna (27NMP46 )Lata Singh (27NMP53 )Parvathi VS (27NMP61)Y Manoj Kumar (27NMP76 )

What is Benihana Concept?

HIBACHI Cooking StyleBringing the operations close to the customer.

Both front door and back door.EATER-TAINMENTHistorical AuthenticityLimited menu to reduce waste and cost.Skilled chefs Increased bar lounge area to increase the

revenue from beverages.22% space used as back office space as

compared to 30% for normal restaurantUnique Experience

What is the process flow on a busy night?

Customer enters restaurantWaitress enters and takes order Soups, Salads & Beverages are providedChef arrives and starts cooking the ordered

items on HIBACHI tableCustomer enjoys the Cooking visuals and

customizations to the food.Customer enjoys the food Customer pays and leaves

Optimum space utilization :The restaurants have about 8% more than average productive dinning space

Non-Conventional Kitchen:They eliminated the conventional kitchen with the hibachi table arrangement thereby reducing the labour cost and the additional cost of kitchen space.

Limited menu :By reducing the menu to only three simple Middle American entrees: steak, chicken and shrimp they cut the food costs to between 30% and 35% and this also lead to reduce wastage.

Infrastructure : The infrastructure was built by the materials gathered From old houses disassembled carefully in Japan and was built by the two crews of Japanese carpenters

How does Benihana cost structure differ from that of a typical sit-down restaurant?

Hibachi Table arrangement :This unique feature not only adds to the showmanship of the restaurant's culinary offerings, but also reduces labor cost and takes away any apprehensions regarding exotic fare.

Location advantage :The restaurants are located in heavily populated areas so as to attract clientele for lunch and dinner.

Authentic ambience: Every entity inside the restaurant was made authentic. Even building materials were shipped from Japan directly. This helped in attracting customers

Better Layout: This increased the productive area by about 8% effectively compared to competitors.

Labor cost(waitress +chef+2-3 people in bar + Bus staff +dishwasher) = 10% annual revenue

Annual revenue 1.3 Million $Labor cost = 0.13 MillionNumber of chef = 6Total number of labors= 25Assuming salaries of all labors are same,Average annual salary of a chef = 6/25*.13 M

=3120 $

Calculate the chef’s annual wages for Chicago unit?

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Calculate Profit after tax for Chicago

Sales Revenue100%  

Food Revenue 70%  Beverage Revenue 30%       Cost of sales    

Food 21%=30% of 70

Beverage 9%=30% of 30

Total cost of sales 30%       Gross Profit 70% 100-30

***Assuming sales to be 100%

Operating costs  Miscellaneous expenses 1.5%Labour 10%Employee benefits 4 %Employee meals 1.5%Advertising 10%Management 4%Laundry, linen, uniforms 1.75%Replacements 0.75%Supplies 1.25%Menu 0.375%Music 0.75%Utilities 1.5%Administrative expenses 1.375%Repairs 1.5%Rent 5%Taxes 1%Insurance 0.875%Interest 0.65%Depreciation 3%Total 50.775% =51 %Net Profit before tax 19% 8

Sales of Chicago is equal to $1.3million.According to the above figure, net profit before

tax = 19% of $1.3million = $247000Assuming Tax rate 35%:PAT = 0.65* 247000 = $ 160,550

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Calculate Profit after tax for Chicago

Discuss the Services characteristics and concepts in context of the case.SERVICE CHARACTERSTICS : 1. INSEPARABILITY: (Closure Proximity) The service providers physical connection to the service being

provided. The customers involvement in the service production process.

The Teppanyaki TableThe average turnover at the teppanyaki table was an hour which was normally 45 minutes earlier. Above every table was an exhaust hood to remove cooking steam and odors and much of the heat from the griddle. Each table accommodated eight diners with service being provided by a chef and a waitress; each such team handled two regular tables. After a group of eight had been seated, the waitress would take the order and bring whatever soup salad and beverages were requested after which the chef would appear wheeling his cart with the food items to the table.

2. INTANGIBILITY : Services are performances, deeds and efforts which cannot be felt, sensed or touched.

How do you get customers to take notice of your service when they cannot touch it.The food was cooked in front of the customer by Japanese chefs, and the décor was that of an authentically detailed Japanese country inn.

3. SIMULTAINEITY: Services produced and consumed at same time e.g. Customized offerings of the chefs which are immediately

consumed by the customer.

4. PERISHABILITY:

Services cannot be saved , their unused capacity cannot be reserved and they cannot be inventoried.

Motivating Non-peak consumptions

The hours of operations for the 15 units varied according to local requirements. All were open for lunch and dinner, though not necessarily every day for each. Lunch business was important ; overall it accounted for about 30% to 40% of the dollar volume despite a significantly lower check average. Essentially the same menu items were served for both meals , the lower menu price average at lunch reflected smaller portions and fewer combinations.

Service concepts : focuses on results

Competitive priorityCUSTOMER VALUE : Customized foodEntertainment along with foodWait time reduced as menu was minimal

and each table has one chef.Authentic food Transparency in service delivery