Benihana Case Study

1. What is Benihana selling?

* The environment and atmosphere (authentic Japanese restaurant by having authentic decorations along with having the chef cook in front of you)

* Entertainment

2. What are the keys to Benihana’s success?  (Compare operating ratios with those of “typical” service restaurants given in Exhibit 1.)  How do these keys arise?

3. Examine Benihana’s operating system:

(a)  Draw a diagram of the “production” process.

(b)  Where are the flows?  Where, in the process, are inventories held?

(c)  What role does the bar play in the process?  Based on the flows through the system, how large should the bar be?  Why?

(d)  What dessert would you offer at Benihana?  Why?

(e)  How does Benihana build process and operational control into its system?

4. Which of its opportunities should the firm now exploit?

5. How do you feel about Benihana’s future?  Would you buy its shares?

Case Takeaway

* Whether rock’s success was good luck or good management is not the issue

* Case illustrates that there are tremendous synergies when the package of consumer benefits and the processes delivering the package are aligned

* No where is this more true than when the product is a service

Example:

* Product = Japanese “Hibachi” eating experience

* Configuration = simple fast-frying at table = high conformance, high capacity, and low cost

* Only chicken beef shrimp which implies low risk of yucky food implies high conformance

* All food cooked the same, cooking defects is down, high conformance

* Little menu choice, low decision choice, increase capacity

* Cook quickly in small pieces, low cooking time, high capacity

* No customer knife work, low cutting time, high capacity

* Smaller pieces = less chewing, lower chewing time, high capacity

* Bad seating, less sitting time, high capacity

* Dessert quickly eating, low eating time, high capacity

* Chef...