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Benihana Of Tokyo Essay

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1. What is the Benihana concept?

The Beninhana of Tokyo, basically a Japanese Steak House has a very unique concept in terms of the idea of watching the food being cooked live on the table in front of eyes. Benihana featured traditional Japanese cuisine experience in the urban U.S metropolis. It was the first introducer of Hibachi Cooking style in USA, celebrating the cooking of food so alive and entertaining. This experience comes with Teppanyaki tables which accommodated eight people and live cooking of food with service being provided by a chef and a waitress.

The concept featured a chef dramatically preparing meals while engaging the eaters around him at the Teppanyaki Table which gave a totally new dining experience. The chefs were mostly trained for the showmanship and the Benihana form of cooking from Japan.

This gave a feeling of exclusivity as each table had its own chef and waitress resulting in high engagement and participation from customers end. Benihana not only started with an adopted innovative cooking experience (something that did not exist in USA Before) but also featured Japanese historical authenticity in its design layouts and interior décor, the walls, ceilings, beams, artifacts and lightings were all from Japan to create a Japanese effect in the restaurant.

2. How does Benihana`s cost structure differ from that of a typical sit-down restaurant? The cost structure of Benihana differs a lot from that of a typical-sit down restaurant resulting in lesser costs and higher profit: Rocky borrowed the method of Hibachi Table to counter the problem of availability and cost of labor and by eliminating the need for a conventional Kitchen, the cost of labor was around 10%-12% of sales as compared to industry average of 30%-35%.

By reducing the menu to simple three entrees the wastage was reduced and can cut food costs by 30%-35% compared to the industry average of 38%-48%.

The cost of beverages as percent of sales was 20% for Benihana as compared to the industry average of 25-30% resulting in higher gross profit.

Due to parental management relationships with the staff, the management salaries were around 4% of Benihana as compared to the industry average of around 6% were lower.

Though the sites were chosen carefully but the rent was usually lower for benihana around 5% compared to industry average of 9%.

Benihana on average advertised more than the industry and deliberately sent advertising messages to position it differently. Benihana spend 10% of its sales on advertising while the industry only spends 2%.

Net Profit after income tax was relatively higher than the industry average for benihana.

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