Benihana's Business Model

1062 Words 5 Pages
Executive Summary
Raised in Tokyo, Hiroaki (Rocky) Aoki managed to launch his first business in the United States. Heopened a Chinese-Japanese cuisine restaurant offering a unique experience and attention to its customers. The food process was transformed to an exceptional food experience.
He opened a chain of total 15 restaurants across US with some of them being corporate owned and others franchised or with joint venture with leading hotel chains. Hiroaki Aoki proved to be a pioneer in the restaurant industry.
The way he succeeded was through complete overhaul of restaurant‘s environment, financial operations and service structure. By decorating his restaurant with Japanese elements and employing Japanese chefs as showmen, the perception
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Benihana’s concept is based on an authentic Japanese atmosphere. The use of American food favourites (chicken, steak, etc.) combined with the “Hibachi” method of presentation makes this restaurant very different from others. Benihana enhances the experience of their customers by treating the chef as a showman and having a different production line to service (ibid.). The front stage is the largest part of the operations with the chef cooking and serving the dishes together with the waiter, whereas the kitchen preparation is a very small part of their process.
Major facts about Benihana are:
• Benihana is a restaurant chain founded in 1964, by Hiroaki (Rocky) Aoki
• Consisting of 15 restaurants in US by 1972
• Gross Sales of the entire chain is about $12 million
• Offers a limited menu and targets Business person, Tourist visitors and White Collar
• Targets high traffic area and spends heavily on advertisements and promotion
• Targets rapid growth by collaborating with various hotel chains and opening quick service stations.
Key focus Elements for Benihana
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Management Concerns
Franchising
• No knowledge of native Japanese style
• No experience of Investors w.r.t restaurant business
Future Expansion
• Fund availability
• Concern about loosing autonomy by taking loans
• Manpower constraints
• Higher cost and lead time for Japanese construction material
• Limited carpenter crew
Catering need of younger generation
Operations limited to primary markets only
Analysis
• Franchisee
 No knowledge of Japanese culture and Benihana style of cooking
 No experience of investors w.r.t restaurant business
 Low control over the business operations
• Expansion
 Reluctance to take loans from financial institutions
 Limited carpenter crew
 Scarcity of surplus trained staff
• Operations
 High advertisement and PR cost
 Limited variation in menu
 No presence in secondary markets and markets outside USA

Recommendation
• Expansion
 Explore secondary markets and other potential areas for further expansion
 Collaborate with more hotel chains to expand overseas
 Go public to secure funds
 Employ more staff for further expansion
• Operations
 Introduce quick service option
 Introduce variations in menu
 Introduce attractive schemes for female and older people

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