Customer's Service Experience O Benihana example essay topic

Cold Call Summary From 1964-72, Rocky Aoki built Benihana into a successful restaurant chain (15 locations, $12 M revs). Major drivers of success include: o Efficiency: Cost control o Achieve high levels of customer service with less skilled labor o Limited menu reduces food and waste costs o Fast table turnover due to limited menu and cooking time, food and info transfer inefficiencies reduced by eliminating servers o Large bars increase beverage (high-margin) % of sales o 78% floor space is dining or bar (vs. 70% elsewhere) o Simple management structure (4 execs + controller in corporate), good incentive plan, high level of control o High quality and customer service: Cooking at the table is entertaining, attentive and reassures Americans that exotic foods are OK. Chefs are highly trained showmen. Only USDA prime beef used. o Advertising & PR: Spend unprecedented 8% of sales on programs with "impact philosophy" - visible, visual, creative, offbeat ads to attract first-time customers, to be retained by the quality of their experience. o Authentic Japanese atmosphere: Chefs, d'ecor, etc. all from Japan.

Players o Hira oki "Rocky" Aoki (Founder and President) - Creative, resourceful, serial entrepreneur (Broadway producer, boxing and art show promoter, shot to phenomenal success in 8 yrs, thinking about going into movie promotion and model management. Philosophy: "Work hard to make people happy". o Bill S usha (VP, Ops & BD) - Arrived in 1971 from Hilton, instituted control and incentive systems. Working to devise expansion strategy. o Glen Simons (Dir., Ads & PR) - Oversees bold, unusual advertising campaign to attract new customers, PR campaign to attract financing, suppliers, etc. o Allen Saito (Mgr, Ops) Background o First Benihana opened in Japan in 1935 by Yunosuke Aoki (Rocky's father). o Hibachi cooking incorporated in 1958 in response to rising costs and comp. o Rocky opened 1st US Benihana in NYC in 1964 (paid for itself in 6 mo. ), 2nd in 1966 to handle overflow, Chicago location (most successful at $1.3 M revs / yr ) in 1967, SF, Las Vegas JV in 1969, Benihana Palace in NYC in 1970. o As he opened more restaurants, rocky increased the size of the bar areas to drive beverage (high-margin) sales. Typical food / beverage split: 70/30. o 7 franchises granted: Puerto Rico (failed), Harrisburg, Ft. Lauderdale, Portland (repurchased), Seattle, Beverly Hills, Boston... o Lunch business 30-40% of sales.

Questions 1. What are the differences between Benihana's production process and that of a typical restaurant? How do they affect a customer's service experience? o Benihana produces food at the point of service (from earlier prep in back), eliminating the need for skilled cooks and servers (only kyacktail waitresses). o Affords an engaging, interactive dining experience; reduces waiting for servers o Service of food by chef enables Benihana to provide uncommonly attentive service at low cost - element of instant gratification o Limited menu reduces food costs and waste, but limits customers' options 2. Examine the design of Benihana's operating system in detail.

What major design choices enable the meal to be served in.