Is Benihana a Successful Operation? How Successful?

Benihana is a low cost concept while providing an authentic Japanese dining experience to their customers. It is designed to maximize productivity while keeping labor costs lower. The menu has a limited selection and variety but is made by highly trained chefs. The management structure is simple and site selection was key because 30-40%was for lunch and 60%-70% was used for dinner. Many bigger cities had utilized this concept. Advertising was unique and tailored to show the experience.

The Benihana concept is a job shop. According to the lecture, a job shop is defined as a " process where typically one or a few of a kind are made at one time. In the early days where craftsmen carried on most production, the operation was essentially a job shop. The craftsman would take the order from customers and make the product to suit the order. A good example of a job shop is the custom tailor, or the made–to–order cake shop. In both cases, the customer places an order, and the operation then starts making the order".

The first part of the definition is a process where typically one or a few is made at one time. Each chef will customize the order based on the customer's selection and preference. The teppanyaki bar serves steak, filet and chicken and shrimp in a variety of ways based on the customers order. The craftsman at Benihana is a selected Japanese's chef who are well trained. Each chef was hand selected and usually was single Japanese man who completed three-year apprenticeship. Being a chef at Benihana is similar to a craftsman. The chef starts preparing the orders as soon as the customers place the order.

Is Benihana a successful operation? How successful?

First of all by analyzing Exhibit 1 we can clearly see by utilizing the figures that Benihana total operating expenses ranged from 55-65%, which allow the profit to be as high as 45% to 35% per restaurant. Benihana started with a 30,000 investment in 1964 in Manhattan and has now grown into a successful chain of 15 units across the country and had grossed $12 million.

From a customer perspective 67% of customers where recommended by other customers meaning that each customers who previously visited was satisfied. The survey indicated that customer service was rated at 71.3% of people thought the service was excellent. Furthermore the food was also rated excellent by 77% of customers. From a customer satisfaction