Benihana of Tokyo Case Study Solution
Introduction
Benihana is a Japanese chain of restaurants that has started its operations in the United States. Hiroaki Aoki is the president of the US operations and he was also the person to start the operations in U.S. The restaurant was formed with a vision that the American people are curious of what they eat, therefore the restaurant will provide service in such a way that these customers are able to see what they will eat. Therefore, Benihana hired Japanese chefs who were highly trained and provided them with such an environment that they cooked in front of customer. The restaurant became a great success due to its vision and was able to grow at a very fast rate and expanded into different states of US and some other countries abroad.
Business Model
The restaurant was set-up with a vision to satisfy its customers. The business model implemented by the management for earning revenue mainly targeted customer segment of business travelers and leisure customers. These customers were satisfied by using a simple approach that the people enjoy exotic food but do not trust easily on outsiders therefore,the chefs cooked in front of customers while the customers enjoyed their food being prepared. The business ensured that it remains efficient by taking steps to reduce labor costs below industry average and increasing capacity to maximum and reducing wastages to minimum. Thus, the business model supported high profitability and showed great prospects for growth.
Decision Making Process
In order to remain efficient, Benihana’s top management developed a formal line of reporting for employees, each unit or branch of restaurant had a group of waitresses and chef who were managed by chief chef. The assistant manager makes report of the performances of the chef and reports to the manager, and each branch manager then reports to senior manager. The decision making power is mostly centralized as decisions are usually made by the top management, while the branch managers also tend to have significant authorities as per their responsibilities.
Competition
Although there is serious competition in the restaurant market however,Benihana has been able to provide service in such a way that it created a large base for loyal customers. Moreover,the processes of the Benihana restaurant are not easy to replicate.
Problem Statement
The major problem in the case is that the management of Benihana plans to expand the company however ithas been facing several issues which limit the restaurant to grow at its full potential. The main issues can be regarded as lack of capital to start new ventures and determining the right rate of growth for the company. Lack of capital is an immediate problem as the company needs access to quickly fund in order to expand, although financial intermediaries are ready to provide financing to Benihana however,this will require significant loss of control. Assessing the rate of growth is a long term problem and if the company is unable to solve it, then it might face problems in long term.
Identification of Issues
To assess the problems and build a recommendation, we need to analyze the issues presented in the case. Following are the issues identified in the case that limit the organization from expanding;
Lack of Skillful Staff to Support Growth
In order to start a new branch, the restaurant requires at least 30 employees who need tobe well trained and certified. Therefore, if the company is to expand thenit requires more trained staff which is very limited currently.
Large Capital Investments Required
Each new branch requires on average a minimum of $300,000 of funds which the management lacks currently. Although the company can receive funds from the banks however,this will result in significant loss of control over the restaurant.
Use of Authentic Material for Building New Units
There are currently only two carpenters hired by the company who know how to build a branch with a traditional Japanese touch. As these carpenters, using their maximum potential,can build 5 units per year, therefore the company is limited to grow only at 5 branches per year rate.
Decision on Markets to Expand
The company has several options available to expand the business into various markets but all these decisions have their own risks and rewards. An example of this could be that if the company tries to expand out of US,then the company will have access to large profits but this will result in great loss of control and the restaurant might not be successful in other countries.Moreover,if it tries to expand within other states of the US,then the company will have maximum control over its restaurants and will require minimum controls but the profits will also be less.
Benihana of Tokyo Harvard Case Solution & Analysis
Diversifications
The management of the company also plans to diversify its operations; therefore it plans to limit its risks of the operations. The management has plans to diversify into production by manufacturing tinned products under the Benihana label. Nonetheless,these plans also require large capital as well as they are not in line with the company’s vision................
This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution
Related Case Solutions & Analyses:
Cocoa Petes Chocolate Adventures (Abridged)
Note on Foreign Direct Investment in Japan
US Telecommunications Industry (A)–1984-96
HBO Boxing distribution way
Azzurri Communications
THE EUROPEANIZATION OF MARIMEKKO
Sunac’s Acquisition of Greentown in the Chinese Real Estate Market (C)
TRIP ADVISOR
The search for Property- Institutional Investment in Real Estate
The Allergan Board under Fire
