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The Case Analysis: Benihana of Tokyo
- 1. Case Study Analysis Benihanaof Tokyo Annisa Nurul Muktiono Putri Bimo Aryo Wibowo Luqman Pradityo Manda Senna Setrana Mega Mustika
- 2. Background ❖ Rocky wentto USA and do a research about Japanese food, turns out Japanese food was not really popular because it was not as good as Chinese food. ❖ People think that sukiyaki was like a hot brown water. ❖ Rocky changed the way Americans think about Japanese food by introducing Hibachi cooking (1st introduced by Papasan in 1958 in Japan).
- 3. Product Design ❖ Benihanaoffers the new experience of dining with Hibachi style of cooking. ❖ What are they really selling? 1. High quality food 2. Food’s freshness 3. The cooking process’
- 4. Benihana Concept ❖ FOOD:The food in Benihana is not really traditional Japanese, but more of a steak cooked through a Hibachi Cooking, where you sit in front of the cook preparing in open fire and steel griddle plate (Teppan) ❖ Entertainment: chef’s dexterity and hand movements while preparing the food are for entertaining the customers
- 5. Benihana Concept ❖ Prices:$6 at lunch to $10 At dinner ❖ Space Utilisation: cuts 8% of average back space (22% as opposed to 30%) for a 5000 square feet operation. It is approximately 3900 front space and 1100 square feet for back space
- 6. How does itDiffer ❖ Food: 30-35% as compared to 38-48% of food in other restaurants, minimum number of menu. ❖ Beverage: 20% than other typical service restaurants (25%-30%), because people spend lot of time in Lounge to wait while drinking, this way Benihana could sell a large amount of beverage and gain profit from Sales. ❖ Labor: 10%-12% of the whole cost structure compared to 30% in unconventional kitchen. ❖ Advertising: 10% opposed to 0,75%-2% in other typical service restaurants, outlets of advertising are special media. ❖ Rent: 5-7% opposed to 4,5-9% in typical service restaurants
- 7. Process Flow onBusy Night ❖ 3.1 Customers Arrive ❖ 3.2 Customer Seated & order Taken Customer Arrive Wait at Lounge Wait at Lounge Seat and Order Taken
- 8. Process Flow onBusy Night 3.3 Food preparation Seat and Order Taken Preparation Pick Soup/s alad
- 9. Process Flow atBusy Night ❖ 3.4 Coking/Eating ❖ 3.5 Dessert Cooking Eating Eat Dessert Pay Leave
- 10. Chef Wage’s Calculation ❖Gross revenue = $ 1,3 Million ❖ Estimated expense for labor: 10% from gross revenue = 10/100 x $ 1,300,000 = $ 130,000 ❖ Assumption: chef : waitress : others = 5 : 4 : 3; based on the comparison on managerial wages level (15,000 : 12,000 : 9,000)
- 11. Labor Wage’s Calculation (Facts) ❖Minimum wages regulations in 1972 was US$ 1.60 per hour for a non-farm job. (source: http://www.dol.gov/whd/minwage/chart.htm. retrieved: 8 September 2014; 13:00) ❖ If we assume that waitress, dishwasher, bus staff, people at bar will get approximately $ 1,6/hour. ❖ If they work for approximately 8 hours a day, they will get monthly wage for: 8 x $ 1,6 x 30 = $ 384/month. They will get yearly wage for: $ 384 x 12 = $ 4,600/year.
- 12. Labor Wage’s Calculation ❖This can be compared with our calculation that ❖ Waiters: 4/12 x US$ 130,000 = US$ 43,333/year. Each waiters will get: US$ 43,333 / 8 = US$ 5,416/year. ❖ Others (dishwasher, bus staff, people at bar): 3/12 x US$ 130,000 = US$ 32,500/year. Each one will get US$ 32,500 / 8 = US$ 4,062/year.
- 13. Profit After Tax ❖1.300.000/Year ❖ Food 30%=390.000 ❖ Labor 10%=130.000 ❖ Adv 10%=130.000 ❖ Management 4%=52000 ❖ Rent 5%=65000 ❖ ______________________ - ❖ 767500 ❖ 1300000-767500=533000 >Gross Profit before Tax ❖ For 0,5% Tax=$530335 Profit After Tax ❖ For 1,5% Tax=$525005 Profit After Tax
- 14. Cocktail/Lounge Wait Timeon busy night ❖ Average time spent in Benihana: 1 - 1,5 hours ❖ Average time spent to enjoy the food: 45 minutes (from seated to leave the restaurant) ❖ Non-busy nights: 60 mins - 45 mins = 15 mins ❖ Busy nights: 90 mins - 45 mins = 45 mins Its utilisation is still low because customers wait too long before they can enjoy the food
- 15. Customer Arrive Is the Restau rant full? Yes No Waitat Lounge /Bar Seat and Take Order Preparation (Bring Salad, soup,Beverag es) Cook and Eat Dessert Pay Leave
- 16. SWOT Analysis ❖ Strengths 1.Hibachi cooking 2. Authentic decoration 3. Efficient cost structure 4. Highly trained chef 5. High standard of operation control ❖ Weaknesses 1. High cost of establishing new units 2. Policy of Japanese authenticity 3. Franchising failure
- 17. SWOT Analysis ❖ Opportunities 1.Grow the market by doing expansion (ex: franchising, investment, joint venture, etc. 2. New market potential: younger generation 3. Small unit / quick service operation ❖ Threats 1. New competitors 2. Unexperienced investors 3. Difficulties in recruiting Japanese staff and personnel
- 18. Issue ❖ High Cost;insistency on using materials from Japanese House, Use all native Japanese staff in the store. ❖ Long queuing time
- 19. Theory ❖ Effectiveness :Doing the right thing to create most value for the company ❖ Efficiency: Doing at the lowest possible Cost
- 20. Solutions ❖ Raw materialsdoes not need to be come from Japan. It is a good thing to have a Japanese decoration in the restaurant, but Benihana does not need to import the ornament from original Japanese house because it is costly. ❖ Minimising the amount of time customers need to wait in line ❖ Reducing flow time of the process: 1. Hire more chef 2. Make one chef one table system 3. Add more table 4. Rearrange lounge area in busy night 5. Reallocate advertising budget for other things, like hiring more chef and add more table.
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- 22. What Makes OperatingCost High? ❖ They invest more money to educate their chef. ❖ In order to be a chef, each one must pass: 1. 2 years apprenticeship in Japan. 2. 3-6 months course in Japan for English language and Americans manners, as well as the Benihana form of cooking, which was mostly showmanship.