Operations Management

Case Study: Benihana

Benihanas effective operating system supported the hibachi-style dining concept; their model enabled the
restaurant chain to focus its cost structure to exploit their competitive advantage over many typical
American restaurants.
Rocky Aoki designed a lean and effective operating system that allowed customers to come in,
be seated, have dinner, and be on his or her way out in 45 minutes (Sasser, pp.3). To allow that to
happen, Benihana was particular with their food selection, buying only steak, chicken, and shrimp as
available entree options. The limited food offerings reduced the amount of inventory, making it easier to
manage. As a result, there was a decreased amount of food wastage. After the food was procured, it was
pre-prepped in the kitchen to expedite food preparation and reduce customer wait time. The workers in
the kitchen purposely left a tiny amount of fat to allow the chef to display showmanship by removing and
discarding the fat in front of the customer.
In addition to the food selections, another important part of the Benihana Concept was the
hibachi table seating. The layout for hibachi seating featured the chef cooking directly in front of
customers, thereby reducing the necessity of a large kitchen in the back of the restaurant. The hibachi
dining style also increased attention to customers needs by providing direct interaction with the chef. The
hibachi table arrangement also gave chefs the ability to remove American skepticism on the preparation
of exotic foods by preparing the food in front of the customers, fostering customer comfort.
The Benihana model cannot be described in its entirety without discussing the emphasis Rocky
Aoki placed on the bar and lounge area. The bar/lounge operations worked simultaneously to the
traditional Benihana model, where the emphasis was placed on food and customer experience. The lounge
area was a place where people could be entertained and relax.
Rocky Aokis innovative, trend-setting restaurant concept was highly successful due to many
factors, including its optimal operational decisions. One principal reason for the prosperity of Benihana
was its superior cost structure compared to traditional restaurants inefficient cost structure. In addition,
Benihana had a bar or lounge in many of its properties, which on average accounted for 30 percent of
total sales (Sasser, pp.2). While Benihana did employ many tactics that were atypical of most American

restaurants, they did have a bar/lounge for the purpose of bolstering revenues and profit. This strategy
aligned with the operations of many American businesses and consequently demonstrates that even
though Benihana was cutting-edge in many facets, they also employed techniques utilized by many other
restaurants.
By employing a hibachi-style restaurant in which a majority of food production is done in front of
customers, the need for a traditional kitchen, and thus extra square footage, is reduced. Maximizing room
to seat diners while minimizing back-house square footage increased sales per-square-foot and profit
margins.
Also, by restricting menu offerings, the amount of wasted food was reduced which lead to
decreased food costs whereas typical restaurants have the expenditure of discarded food. Steak, chicken,
and shrimp were the main items on the menu. Contrarily, many American businesses offered numerous
other items to its customers. Benihanas limited selection substantially reduced their inventory costs; this
was a competitive advantage over other restaurants that had to carry more inventories to support their
complicated menus. To demonstrate this point, Mr. Aoki stated he was able to reduce food costs by 3035% by following the approach of wasted food reduction (Sasser, pp.2).
Finally, other competitive advantages for Benihana included: imported authentic restaurant design
details (which created a unique dining atmosphere), extensive chef and employee training from Japanese
employees (which correlated to superior service), commitment to employee well-being (which reduced
turnover as well as hiring and training costs), and creative advertising in non-traditional mediums (to
reach a wide spectrum of untapped customers).
Mr. Aokis relentless pursuit of offering his customers a unique, authentic Japanese dining cuisine
experience was Benihanas competitive advantage. However, one could also argue that Mr. Aokis
meticulous standard also hinders the restaurants future growth. We recommend Mr. Aoki to focus more
of its operational resources to some of the restaurants bottlenecks: chefs brought from Japan, carpenter
team capacity, authentic design and unique employee trainings.