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The Three operational aspects that led to the enormous success of Benihana are:

1.The introduction of Hibachi Table concept. This was the major factor behind the success of
Benihana. This concept not only became crowd puller but also was an operational success.
Rocky by shrewdly combining the live experience of food preparation with operational fluidity
brought an innovation which eventually became the key driving factors of Benihana success. The
Hibachi Table not only resulted in elimination of the conventional kitchen but also resulted in
cost reduction. As opposed to 30% of the total space required by a conventional restaurant,
benihana only required 22% of the space.

2. The second operational aspect was to stick to simplicity. Rather than trying to offer everything
Benihana offered only three simple but tasteful Middle American entrees. This helped in
achieving reduced food storage requirement and lower wastage. By offering only Steak, Chicken
and Shrimp, Benhiana reduced foods costs to around 35% of the sale value. By sticking to simple
meal options and focusing on experience, Behnihana achieved operational efficiencies while also
increasing the value for customers.

3. No operational tactics could work without the presence of the core element that is critical for
the success of the business. And in Benihanas case it was the Chefs who held the key to success,
for without good product, food, every operational innovation would have gone to waste. Rocky
skillfully brought chefs who were young, native Japanese and professionally certified. He
brought Chefs from Japan who were keen on making their mark in America. He mentored them
and encouraged them which resulted in loyalty and low turnover and since they started their
careers at Benihana they loyally followed its philosophy of quality and style and as they grew
they kept to the high quality standards.

Analyze and describe any three additional extra-operational aspects of Benihana business
that has led to its success. Why or why not these six operational or otherwise decisions
taken by rocky could be copied by some other restaurant in the same industry

The additional extra-operational aspects behind the success of Benihana business are:

1. Benihanas decision to operate for limited hours and focus on dinner hours led to savings that
in turn improved the profitability. Rocky relied on statistics to make business decision and this
helped in success of his restaurants. Rather than operating for straight hours, Bennihana focused
on meal times and succeeded in creating operating efficiencies while focusing on giving the best
experience to its visitors.

2. Benihana kept the organization structure simple and lean. Control structure was simplified so
that decision could be made and implemented quickly. The structure meant low overheads and
high employee engagement, which resulted in employees staying motivated. Forecasting and
other management decisions also included managers which led to effective forecasting and
budgeting.

3. In order to efficiently use available resources while increasing revenue of the restaurants
Benihanna opened bars. Initially objective was to provide added service to the customers and
keep them satisfied, so the bar was given secondary importance. However seeing more than
anticipated demand for drinks, floor space was increased and attention was given to the bar. This
value added service led to beverage sales of 18%-33% of the total revenues while costs were
only around 20% of total sales.

Taken into separation each decision could easily be copied by competition, even the philosophy
could be copied. But it is not individual elements and tactics that are the success factors rather it
is cohesiveness of the whole that makes the individual elements work successfully. Though it is
easy to have simple menu, limited hours, Japanese chefs & Hibachi table but it is not easy to
make them work in cohesive unity the way Rocky succeeded in achieving. This was evident
from the failure of many restaurants that tried to copy Benhinanas model.

Is franchising a good strategy for business expansion? Why did it fail for Benihana? What
operational strategy would you suggest Rocky for Further growth of his business? Briefly
describe risks and benefits associated with each of your suggested strategies

There can be no absolute answer to whether Franchising could be beneficial to business or not.
Many Restaurants like Mc Donalds, Subway and other business have benefited from franchising,
but many organizations have suffered from franchising as it has a potential to dilute the image of
the parent organization.

Franchising can help a business only when processes can be standardized and the quality
standards can be strictly adhered to. If the same level of service and product cant be ensured in a
franchise than the strategy would do harm to it. For franchising to succeed parent organization
must have significant control of the operations.

The failure of franchising for Benihana was due mainly to the lack of control of Benihana over
its franchises. The control and check and balance system wasnt in place .The franchise owners
who saw their franchise as primarily a financial investment didnt adhere to the philosophy that
was the key behind the success of Benihana. Further due to cultural differences and lack of
understanding franchise owners couldnt get along well with Japenese staff which hurt the
service level.

For further growth Benihanna could attract investment from Venture Capitalist, where
management and control would remain with the Benihnna, while investors would be concerned
with the profitability and growth of the business enterprise.

The benefit of getting investment from Venture Capitalists is that Benihana can negotiate terms
for keeping the management and operational control. This would help the company to carry its
quality and service philosophy to other outlets.

The major risk with the strategy is that VCs focus on investment growth. They can be impatient
if the growth is slower than expected. VCs due to large investment can also cause the change in
management if things dont go according to the laid out plan.