Benihana Case Study

Syndicate 10
Benediktus Duan Putra
Frans J Purba
Ramara Arief
Shinta Asih M Hutasoit

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1. What is the Benihana concepts?
Relates:
Food
Only serve three simple Middle American entrees :
steak, chicken, and shrimp
Entertainment
Americans enjoyed watching their food being
prepared. So, Benihanas management decided to
applied that strategy into their floor plan.
Prices
Lunch Time : $ 6 (1 Food & 1 Beverage)
Beverage : $ 1.5
Food : $ 4.5
Dinner Time : $ 10 (1 Food & 1 Plus Beverage)
Space utilization
22% back of the house (preparation areas, dry, and
refrigerated storage, employee dressing rooms, and
office space) and 78% is a productive dining space. And
Benihana also applied the dcorTemplates
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2. How does Benihanas cost structure
differ from that of a typical sit-down
restaurant? Relates:
Food
By reducing the menu to only three simple Middle American entrees, Benihana had been cut food costs
to between 30% - 35% of food sales depending on the price of meat.

Beverage
Cost 20% of beverages sales

Labour
Simple Management structure. Manager (sallary of $ 15,000/year), an assistant manager ($
12,000/year), and two or three front men ($ 9,000/year). Benihana has well paid personnel. Any unit
that exceeded its quota on any basis-daily, weekly, yearly will get a proportionate bonus, which will
be prorated across the entire staff of the unit. (10% - 12% of gross sales)

Advertising
Benihana utilizes outstanding visuals in its ads because Benihana have a visual product to sell. The
accompanying copy is contemporary, sometimes offbeat. A recent full-page advertisement which
appeared in the New York Times, Womens Wear Daily, and New York Magazine did not contain the
word restaurant. Benihana also conduct a considerable amount of market research to be sure Benihana
know who their customers really are. (8% - 10% of gross sales)

Rent
Benihana han one basic criteria for site selection-high traffic. Management wanted to be sure that a lot
of people were nearby or going by both at lunch and at dinner. Rent normally ran 5% - 7% of sales for
5,000 6,000 feet of floor space. Most units were located in a predominantly business district, though
some had easy access to residential areas. Shopping center locations were considered, but had not
been accepeted by 1972. (5% - 7% of sales, in high traffic)

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3. What is the process flow on a
busy night?

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4. Calculate of chefs wages in
the Chicago unit

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5. Calculate of profit after tax
for the chicago unit?
$
Income
1,300,000
Expenses
Food 30%
390,000
Labor 10%
130,000
Advertising 10%
130,000
Management 4%
52,000
Rent 5%
65,000
Depreciation 4%
52,000
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6. Calculate of cocktail lounge/ bar wait
time (maximum throughput time) on
a busy night

Normally 1 hour turn over at table, 30 minutes

slow period, so on busy night it could be
additional 50% time from 1 hour.
On busy night it takes maximum 1.5 hours
wait time on lounge/bar

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7. Draw process flow diagram of
Benihanas operations

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8. Syndicate opinion &
Suggestion
Suggestion for future expansion is stop franchising strategy and manage Benihana
unit by management.

Benihanas management should prioritize major city as the first consideration to

future expansion and hereafter, Benihana management can look into suburb area for
another option.

Applied Benihana Orient Express soon, due to market of this segment is still
undeveloped. It would be good advantages for Benihana Management for became
the first player (Differentiation).

Consider to open Benihana Restaurant outside America, and running the business
outside America by join-venture program or share-public program. It would reduce
cost of operation and cost of opening new unit.

Still preserve core value of Benihana Restaurant which give a differentiation

between Benihana Restaurant to another Restaurant. (Ambience, Entertainment,
Food, and etc)

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THANK YOU

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