Submitted by - Group 3

Aravind Joni (27NMP08)

Anjali Khanna (27NMP46 )
Lata Singh (27NMP53 )
Parvathi VS (27NMP61)
Y Manoj Kumar (27NMP76 )

What is Benihana Concept?

HIBACHI Cooking Style
Bringing the operations close to the customer.

Both front door and back door.

EATER-TAINMENT
Historical Authenticity
Limited menu to reduce waste and cost.
Skilled chefs
Increased bar lounge area to increase the
revenue from beverages.
22% space used as back office space as compared
to 30% for normal restaurant
Unique Experience

What is the process flow on a busy night?

Customer enters restaurant
Waitress enters and takes order
Soups, Salads & Beverages are provided
Chef arrives and starts cooking the ordered

items on HIBACHI table

Customer enjoys the Cooking visuals and
customizations to the food.
Customer enjoys the food
Customer pays and leaves

ow does Benihana cost structure differ from that

of a typical sit-down restaurant?
Optimum space utilization :Therestaurants have

about 8% more than average productive dinning

space
Non-Conventional Kitchen:They eliminated the
conventional kitchen with the hibachi table
arrangement thereby reducing the labour cost and the
additional cost of kitchen space.
Limited menu :By reducing the menu to only three
simple Middle American entrees: steak, chicken and
shrimp they cut the food costs to between 30% and
35% and this also lead to reduce wastage.
Infrastructure : The infrastructure was built by the
materials gathered From old houses disassembled
carefully in Japan and was built by the two crews of
Japanese carpenters

Hibachi Table arrangement :This unique

feature not only adds to the showmanship of

therestaurant'sculinary offerings, but also
reduces labor cost and takes away any
apprehensions regarding exotic fare.
Location advantage :Therestaurantsare
located in heavily populated areas so as to attract
clientele for lunch and dinner.
Authentic ambience: Every entity inside the
restaurant was made authentic. Even building
materials were shipped from Japan directly. This
helped in attracting customers
Better Layout: This increased the productive
area by about 8% effectively compared to
competitors.

Calculate the chefs annual wages for Chicago

unit?
Labor cost(waitress +chef+2-3 people in bar +

Bus staff +dishwasher) = 10% annual revenue

Annual revenue 1.3 Million $
Labor cost = 0.13 Million
Number of chef = 6
Total number of labors= 25
Assuming salaries of all labors are same,
Average annual salary of a chef = 6/25*.13 M
=3120 $

Calculate Profit after tax for Chicago

Sales Revenue
Food Revenue
Beverage Revenue

Cost of sales

100%
70%
30%

Food

21%

Beverage

9%

Total cost of sales

Gross Profit

=30%

of

70
=30%

of

30% 30

***Assuming
to be 100%
70% sales100-30

Operating costs
Miscellaneous expenses
Labour
Employee benefits
Employee meals
Advertising
Management
Laundry, linen, uniforms
Replacements
Supplies
Menu
Music
Utilities
Administrative expenses
Repairs
Rent
Taxes
Insurance
Interest
Depreciation
Total
Net Profit before tax

1.5%
10%
4%
1.5%
10%
4%
1.75%
0.75%
1.25%
0.375%
0.75%
1.5%
1.375%
1.5%
5%
1%
0.875%
0.65%
3%
50.775% =51 %
19%

Calculate Profit after tax for Chicago

Sales of Chicago is equal to $1.3million.

According to the above figure, net profit before

tax = 19% of $1.3million = $247000

Assuming Tax rate 35%:
PAT = 0.65* 247000 = $ 160,550

Discuss the Services characteristics and

concepts in
context of the case.
SERVICE CHARACTERSTICS :
1. INSEPARABILITY: (Closure Proximity)
The service providers physical connection to the service being
provided. The customers involvement in the service production
process.
The Teppanyaki Table
The average turnover at the teppanyaki table was an hour which
was normally 45 minutes earlier. Above every table was an exhaust
hood to remove cooking steam and odors and much of the heat
from the griddle. Each table accommodated eight diners with
service being provided by a chef and a waitress; each such team
handled two regular tables.
After a group of eight had been seated, the waitress would take the
order and bring whatever soup salad and beverages were
requested after which the chef would appear wheeling his cart with
the food items to the table.

2. INTANGIBILITY :
Services are performances, deeds and efforts which cannot be felt,
sensed or touched.
How do you get customers to take notice of your service when they
cannot touch it.
The food was cooked in front of the customer by Japanese chefs,
and the dcor was that of an authentically detailed Japanese
country inn.
3. SIMULTAINEITY: Services produced and consumed at same time
e.g. Customized offerings of the chefs which are immediately
consumed by the customer.

4. PERISHABILITY:
Services cannot be saved , their unused capacity
cannot be reserved and they cannot be inventoried.
Motivating Non-peak consumptions
The hours of operations for the 15 units varied
according to local requirements. All were open for
lunch and dinner, though not necessarily every day
for each. Lunch business was important ; overall it
accounted for about 30% to 40% of the dollar
volume despite a significantly lower check average.
Essentially the same menu items were served for
both meals , the lower menu price average at lunch
reflected smaller portions and fewer combinations.

Service concepts : focuses on results

Competitive priority
CUSTOMER VALUE : Customized food
Entertainment along with food
Wait time reduced as menu was minimal
and each table has one chef.
Authentic food
Transparency in service delivery