Company owners and managers have currently discovered that the information gained by reviewing business reports is highly beneficial. Many different facets and everyday business activities are continuously evolving, such as warehouse organizational adjustments, marketing efficiency indicators, revenue patterns and volume, and inventory management improvements, among others. These minor changes in a company’s operations affect its overall wellbeing, whether in the factory, the restaurant, or the healthcare facility (Sasser & Klug, 2004). Business reports must be used to set targets, monitor activities, and build strategies to get a comprehensive image of the overall state of an organization, whether running a large or small business.
Knowing market proceedings is essential for keeping the firm afloat and preparing for any turnaround or significant change. The corporation can collect sales-related data, marketing more technical and financial records. Business report sample would be of constant use in modifying buying strategies, staffing schedules as it is widely communicating ideas in the workplace. This report analyzes Benihana Tokyo enterprise’s operational aspect by critically assessing the business’s current functional operation, evaluating the financial position reports, and contemplating the firm’s SWOT analysis to determine its current and future thriving decisions.
History
Benihana is an Aventura restaurant with its headquarters found in Florida. It operates 116 Japanese cookery cafes worldwide, comprising its leading Benihana Teppanyaki and the Haru (Sasser & Klug, 2004). Hiroaki Aoki founded the company and became the first restaurant owner in the United States to implement the teppanyaki restaurant concept, which had originated in Japan in the late 1940s (Sasser & Klug, 2004). The company was named after the red safflower (name of Tokyo coffee shop owned by Aoki’s parents). The Benihana theory combined reasonable prices with excellent food, and waste was minimized by cooking only what was consumed at the table. Huge profits were accrued that Aoki decided to open the first New York City’s Benihana of Tokyo in downtown Chicago in 1968.
Benihana National Corporation attained its IPO in 1982 With Joel Schwartz as president. Aoki continued to operate some of the restaurants on a personal basis. The launch of the luxury frozen food division, Benihana National Classics, and the Big Splash restaurant were missteps for the group that made its stock plummet as the shareholders sued the management. Aoki continued to operate his privately owned Aoki restaurants acquiring the Haru and RA Sushi restaurants, which continue to operate under those names (Sasser & Klug, 2004). With Haru being based in New York City and RA is based in Scottsdale, Arizona, the business has immensely grown over the years, with its first four sites dispersed across the Phoenix area. Even though Benihana possesses these philosophies, companies are run and established separately.
The Company’s Current Operation
Market and Sales
Benihana restaurants have been serving great value dishes in a cool-filled, appealing teppanyaki atmosphere for over half a century. With 15 million visitors attended yearly across the 107 cities, the firm has over 80% brand awareness and draws a loyal clientele (Sasser & Klug, 2004). The business has frozen foodstuffs with KraftHeinz and is established in such first-rate entertaining and sporting scenes as the Yankee Stadium, the dignity Sports Park, and the Talking Stick Resort, which has sparked the establishment of lucrative collaborations as a result of their enduring popularity.
To advertise the restaurants, the organization uses television, radio, billboards, and print media. To maximize production, advertisement campaigns are customized to each local market, and television advertising focuses on particular dates. The promotional campaign focuses on the freshness and healthfulness of the theater value of seeing the dishes being prepared at the table. To differentiate the firm’s methodology of preparing food at the table in presence of the client, the chef is required to be entertaining, and this value creation is not found in many restaurant’s concepts of food preparation.
The Corporation’s Production and Operation
The Benihana restaurants have a distinct Japanese style that provides visitors with an authentic experience. The majority of the Benihana restaurants in the company are available for both dinner and lunch. The restaurants have a small menu that includes; soup, tea, appetizer, an entree of beef, salad, fish, chicken, or a combination of them. Depending on the local, regional market, specific menu items can differ in different restaurants.
The portions are all portion regulated to ensure that each customer receives the same amount of food. Alcoholic beverages are also available, including specialty wines, beers, soft drinks, and blended drinks. During the 1997 fiscal year, the average check size per person was $22.42 (Sasser & Klug, 2004). Beverage trades accounted for roughly 20% of overall firm’s sales during the fiscal year ended March 30, 1997 (Sasser & Klug, 2004). Sushi is available at several of the corporation’s eateries, both at the teppanyaki grill and separate sushi bars. An entire teppanyaki table is usually filled at once. The waiter or waitress who takes food orders and beverages assists the chef in serving the meal. It takes about one hour and thirty minutes to prepare a full dinner.
Finance
The business provides restaurant directors with all-inclusive monetary and administration control structures using data dispensation information and coordination schemes with prearranged recording protocols. On a weekly and four-week basis, each restaurant sends merchant statements and operating figures to the headquarters, including the sales reports and payroll (Sasser & Klug, 2004). The company uses this data to regularly track revenue, inventory, staff, and other expenses and prepare financial and management reports.
Innovation
The company management assumes that the restaurants’ location is crucial to the long-term success; they, therefore, intend to invest considerable time and energy in evaluating each potential location and further developing and refining the site selection and store opening requirements. Each of the three principles necessitates a different real estate formula to be successful. Both freestanding and in-line restaurants will benefit from the Benihana model. According to Sasser and Klug (2004), the existing prototype based on the teppanyaki restaurant seats on a 7,000×7,500 square feet capacity, thus it can be redesigned into several ways that meet the needs of the firm’s large client base.
The restaurant development model in larger metropolitan areas typically requires the company to lease space in entertainment centers, other real estate projects, strip malls, and shopping malls. When it was financially viable, the company also purchased properties. If it expects to open new restaurants using the retail lease creation model, it also wants to open more standalone Benihana teppanyaki restaurants. The construction and the opening process usually take close to one and a half years after the lease is signed, depending on the availability of the leased space the business plans to occupy. External factors such as the landlord’s property turnover, local government building authority mandates, and the planning process all play a role.
Human Resource and Personnel
BOT compensates the organization for administrative services rendered by some of its corporate employees. As of March 30, 2012, the company employed 5000 people, including 4267 restaurant employees and 733 corporate employees. The majority of employees are employed on an hourly basis, except for restaurant management and corporate management workers. The company also employs part-time restaurant employees to provide services during peak restaurant operations. Employee relations are found to be good at the company.
Teppanyaki style is the training base for Chefs and customer service over the course of eight to twelve weeks. Part of the preparation includes operating in the firm restaurant under the regulation of a skilled chef. Seminars on the company’s restaurant operations strategy are included in the program. The restaurant directors and the principle cook or chefs partake in the continuous training programs, workshops and seminars to improve the productivity as well as institute and implement modifications to the organizational policies.
Management
The Executive Vice President – Restaurant Operations oversees the Benihana and Benihana Grill restaurants. The restaurants are organized into five geographical regions, each of which is managed by a regional manager. According to Nigri and Del Baldo (2018), at least one manager is posted in every Benihana restaurant with one or more assistant managers in charge of personnel issues. The company uses a variety of performance incentive systems to enable key restaurant workers to participate in the company’s local and corporate operating results (Nigri & Del Baldo, 2018). To guarantee a consistent high client package and high food value from one site to another, strict guiding principles are documented in restaurant processes and action manuals. For quality ingredients, food storage, facility management, and employee behavior, managers and assistant managers use operational requirements in manuals. Foodstuff merchandises and share proportions are reviewed for uniformity and acquiescence with the company’s guidelines on a frequent and systematic basis.
The Company’s Generic Strategies
Benihana of Tokyo Company is a multinational conglomerate with a significant presence in several industries. Due to increased rivalry in the business, Benihana of Tokyo has found it challenging to preserve its marketplace regarding leadership market share. The corporation needs to attain a significant economic edge to stay ahead of the race. It has established its competitive positioning as an international brand with a comprehensive footmark worldwide on numerous key factors that contribute to edging its rivals.
The competitive advantage tactics of Benihana of Tokyo can be comprehended by examining the Michael Porter’s general and extreme growth exemplary. The business has recycled a mixture of cost-effective leadership, variation and differentiation, and focus strategies on dealing with competitive pressure. The clientele base expansion and trades progression goals are encountered by directing the three broad approach sources’ most successful intensive growth tactics. Benihana of Tokyo’s intense growth strategies for realizing development objectives includes market penetration, merchandise production, market development, and broadening. This article goes into great detail on how Benihana of Tokyo uses generic and intensive growth techniques to achieve a competitive edge.
Cost Leadership
It aims at achieving a competitive advantage by lowering costs. Benihana of Tokyo’s primary generic strategy in various consumer markets is cost leadership. Benihana uses a cost leadership strategy in the following ways. First, the company aims to keep the market control role by dealing with the value chain efficiently. Second, increase its market segment by engaging in the middle class, who are responsible for most of the overall consumer market assortment in most nations. The value feature is typically indispensable to middle-class clientele, and cost-effective leadership is the best approach for assembling their needs. Third, it focuses on placing a premium on the cost-effectiveness and user-friendliness of its foodstuffs around the world, causing a high brand acknowledgment and sales progression, as well as a substantial economic benefit. Lastly, Benihana of Tokyo offers money off and vouchers to meet sales objectives and offset market burden from its neighboring entrant, in addition to charging low rates by reducing production budgets and increasing supply chain competence (Robinson, 2020). The purpose of these discount and promotional strategies is to escalate brand mindfulness and inspire use.
Many of Benihana’s benefits of Tokyo’s cost-effective management approach have been discussed, comprising swift market responsiveness, widening the customer base, encouraging demand, and achieving sales targets by accentuating merchandise cost-efficiency and user-friendliness. Though cost leadership is the primary strategy in Benihana’s analysis of Tokyo’s economic benefit strategies, the company also uses a variation and differentiation approach in tandem with cost-effective management to build a base for sustainable market share, which is a reasonable and comprehensive customer market.
Differentiation
The standardized technique is another commonly used method for achieving viable and market edge. To attain its growth objectives, Benihana of Tokyo employs distinction following a cost leadership strategy in the following ways: First, it increases its customer base by stressing unique merchandise features by expanding differentiation as a standard ancillary strategy. Second, the premeditated goal of Benihana’s use of this approach in Tokyo is to stand out by integrating innovation and reacting to customers’ increasing wellbeing and fitness concerns. For instance, the firm has extended its product line after researching emerging consumer interests to set it apart from market entrants and widen the scope of prospects within the business. By merging product differentiation and cost-effective management, the corporation has established a broad and loyal consumer market share. Lastly, to make its product known in the market competition, the company employs a generic distinction policy. Since it is an existing brand with a significant presence, it uses differentiation to offset other brands’ pressure. Benihana of Tokyo invests a lot of money in advertisements, ads, and public figure certifications to set it separately from other brands.
The company’s marketing and communication strategies emphasize broad skill, capacity building, and a global existence as some of the distinguishing features. Moreover, the company’ logo is often used to generate a point of difference. The distinct and recognizable brand logo has built a strong brand picture in the minds of consumers. Despite numerous changes, the essence of the brand has remained consistent, serving as a strong differentiator.
Strategy of Focus
The company’s third general market approach encourages the business to focus their market determinants in developing well-fashioned producer segments that meet the customer demands. In this case, the business should use the focused approach because it aims to target the particular clientele as segmented by the market niche to attain a competitive trade environment. This is achieved by the firm in the ways discussed below.
The firm utilizes a mediation and awareness approach to maintain the cost as low as possible, yet providing the best value for its goods and services. In this case, serving the prerequisites of its customer base ensures retaining its market share as well as recognition even with new entrants in the same industry. However, it is noted that the superlative approach is a value-mediated approach because it empathizes on the taste of food produced, its size, and the nature of the foodstuff produced by the form. This ascertains that the customer’s needs are met in accordance to their taste and preferences. Moreover, the corporation has revised its branding approach and methodology, thus contributing to sequential improvements in the product design and packaging. In this case, the firm uses the psychological needs optimization through understanding the customer’s needs, hence increasing value for money.
Note on the Industry
External Threats
Aside from the various opportunities provided by the external market climate, Benihana also faces the following challenges. Initially, a changing regulatory environment puts pressure on Tokyo’s Benihana, which is enacting new, stricter regulations. It makes complying with legal requirements more difficult for the business organization. The company has facilitated the growth of its customer’s base by understanding its market’s both direct and indirect rivals operations. When declining economic conditions directly influence consumers’ buying habits and purchasing power, company performance suffers. Moreover, inflation raises the cost of production and affects company profitability.
Lastly, because of challenging environments which are not user-friendly in terms of restaurants, the products and services sustainability is under threat. It attracts and necessitates negative criticism when the products are produced based on the poor environment, thus hurting the reputation of the firm, hence market share drops. However, this has made the firm to understand the concept of globalization, spreading its branches across the world, thus gaining good market share based on such factors as cultural diversity.
Substitute Products
For various goods that are the leading industry’s assets, there are often diverse replacements or alternatives. The products can either be direct or indirect substitutes depending on the various product portfolio or catalogs. In this case, direct alternates are those from diverse invention categories that can interchange the product for Benihana of Tokyo with other new market foodstuffs (Sasser & Klug, 2004). The company can contest the threat of additional market products by; concentrating on achieving reliability and high-quality results. Upholding good customer connections is a priority; integrate strategic messaging to create an expressive bond with customers.
Buying Power
The bargaining power of suppliers and the bargaining power of buyers are two significant reasonable factors in Porter’s Five Forces. To differentiate themselves from competitors, restaurants, incredibly fashionable or high-end creations, must frequently offer uncommon ingredients. Because of the inadequate opposition in the stocking industry, restaurants do not have much negotiating power when in a business with suppliers of exotic goods (Li & Hall, 2020). Also, large producers of essential foods, such as potatoes, sell to many restaurants, making negotiating difficult.
One advantage of the restaurant industry is that consumers seldom have the opportunity to haggle over food costs. However, unless the restaurant offers something, it cannot set prices too high: consumers are well-informed about the competition and seek another choice. Restaurant profit margins are being pushed down by two forces: the dominance of large supplying firms and savvy consumers.
Competition Profiles
The restaurants compete directly and indirectly with independently owned restaurants, regional chains, and national chains. Many of the major competitors are significantly larger, more diverse, and have substantially more capital than Banihana’s restaurant (Kadim et al., 2020). In this case, the company faces competitive profiles in such areas as pricing, service delivery, venue design, and the quality of meals offered at the restaurant. The battle for accessible restaurant locations, as well as the recruiting and retention of professional management-level operational staff is expected to be fierce. We believe that providing high-quality food at a reasonable price, as well as exclusive entertainment provided by our chefs in a friendly, comfortable environment, enhances the overall experience.
Financial Analysis
Current Ratio
Benihana’s actual and historical current ratios (CR) from 2006 to 2020 have been of great importance to the company’s growth. In this case, the CR is a liquidity ratio that evaluates a firm’s capacity to meet short-term financial commitments (Firnanti & Karmudiandri, 2020). For the three months ending December 31, 2020, Benihana’s current ratio was 1.01.
In situations where a company’s CR is below the standard value of 1.0, it can be considered not to have the liquidity in possession for its short-term commitments at once. Contrary, a CR more than the standard ratio indicates that the company’s financial resources are enough to stay stable in the short term, just as in Benihana.
Inventory Turnover
The inventory turnover quotient in a ratio form shows how much an enterprise’s inventory is sold and replaced over time. For the three months ended December 31, 2020, Benihana’s inventory turnover ratio was 49.58.
For most businesses, a decent inventory turnover ratio is between 5 to10, implying that it liquidates and restocks its inventory every one to two months. It shows that Benihana needs to improve on the inventory control policy to match the current market slightly.
Collection Period
The total number of days it takes to recover unpaid receivable amounts from consumers is known as days sales in receivables. For the three months ended December 31, 2020, Benihana’s day’s sales in receivables were 35.74.
In most cases, invoices must be paid within a month, so the corporation A’s average of one month and one week indicates that accounts are frequently past due. A below-average, for instance, three weeks, indicates a well-organized and current collection.
Debt Ratio
The debt ratio is a calculation that distributes a business’s long-term debt among its shareholders’ equity to regulate its economic leverage. For the last quarter ended December 31, 2020, the firm’s debt was 0.00.
The overall debt ratio should be less than 1.0 for good health. As with Benihana, the lower the debt ratio, the less overall debt the company has about its asset base. Businesses with high gross debt rates, on the other hand, are at risk of being insolvent or bankrupt.
Rate on Sales Ratio
The ROS of Benihana Restaurant for the financial period ended December 31, 2020, was 7%, which authenticates that the organization is more than healthy. Many businesses will be happy with a 5-10% Return on Investment. Once a company’s ROS has been measured, it will decide how cost-effective the product delivery can be.
ROTA
Return on Total Assets (ROTA) calculates a company’s profitability about its total assets. Divide a company’s operating earnings by its total assets to arrive at this figure.
A ratio of 2.5 or more in the retail sector is considered good, while a business in the utility sector is more likely to strive for a total asset ratio of 0.25 to 0.5.
Future Opportunities
The company is expected to have the following prospects in the market based on the analysis above: The ever-expanding growth of the residents, especially in current or impending consumer sectors, presents a significant business development opportunity. With the company having strong business know-how and consciousness, changing consumer wishes, tastes, and preferences are, therefore, considered a business opportunity. The enterprise has introduced evolving expertise in the field of information technology and science to aid in the production and supply of products and services, which lowers the cost of operations significantly, thus facilitating the increase of manufacturing new products as well as creating. Concerning the internal operational opportunities, the company is expected to experience reduced interest rates that would ease the business’ capabilities to raise funds and obtain funding at a lower cost.
The effect of shifting the product preferences may, therefore, make some customers prefer the new products against the old ones. It ensures that the clients are always with the company, even with the ever-increasing technological advancement. In case the firm can preserve its online presence on the various networking segments, the rise in e-commerce as witnessed in the corporation is an opportunity for more growth. Moreover, the advent of social media and the presence of new customers in such market segments is also an opportunity for the company, as it will use the available niche to expand its market share.
Major Strategy Issues
The organization initiated the Benihana Teppanyaki Renewal Program in the second quarter of 2010. The Renewal Program aims to enhance consumer perceptions of value, image, efficiency, continuity, and Japanese culture. The guest was the focal point of the efforts. They’ve improved the food and beverage quality, increased service levels, and revitalized the concept’s marketing and public relations efforts. These combined efforts aim to increase guest frequency, build brand awareness, and ultimately increase restaurant sales at the leading brand (Sasser & Klug, 2004). Most of the menu’s ingredients, such as beef, chicken, and shrimp, were increased consistently. To enhance the taste of the entrees, the cooking techniques have also been modified. Tabletop presentation, service measures, red linen napkins, and a stronger focus on beverage options, including temperature-controlled wine storage, are all on the menu. The following are the majority of the main strategies:
Invest in restaurant acquisitions and growth. The firm has established that the various viable business models can be implemented, thus the existence of opportunity for growth and development. As illustrated, the corporation unequivocally capped their business growth in 2011 due to the contemporary challenges that were facing the U.S. at the time (Sasser & Klug, 2004). Therefore, as the Renewal programs unfolds, the company has realized the need to take advantage of the real estate business due to the possibility of more expansion of the restaurants into more branches.
Maintain a high degree of customer satisfaction and traffic. Under these control issues, the executive promised to deliver more promotional and advertising support to preserve and maintain the company’s image regarding customer satisfaction, working condition, value for money, and quality personnel (Sasser & Klug, 2004). In essence, the firm in collaboration with the Renewal Program is performing campaigns to ensure that their customer connectivity and awareness is maintained (Sasser & Klug, 2004). For instance, in April 2009, the Chef’s Table promotion and campaign was announced with the aim of building capacity through such actions as emailing its loyal customers through the available customer database, thus increasing brand loyalty (Sasser & Klug, 2004). Moreover, the objective of the move was to keep the running costs under control.
Personal Recommendation
The company has continually been on the standout for an outer portion of decades due to customer services’ unique systems. It’s not just the food that sets Benihana apart. Though their chicken fried rice and Asian ginger salad are famous, Benihana’s appeal stems from the mutual experience of seeing a chef prepare one’s meal right in front of their eyes. This kind of collaboration is unusual. Chefs are usually concealed in the back kitchen of most American restaurants, out of sight. At Benihana, the chef communicates directly with the diners. When one is starting a company or launching a new concept or product, it is perfect to think like a Benihana chef. When developing and executing the biggest and best business ideas, it is essential to keep the creative processes open and enable the customers to participate in the creative process as if they are dining at Benihana.
References
Firnanti, F., & Karmudiandri, A. (2020). Corporate governance and financial ratios effect on audit report lag. Accounting & Finance Review, 5(1), 15-21. Web.
Kadim, A., Sunardi, N., & Husain, T. (2020). The modeling firm’s value is based on financial ratios, intellectual capital, and dividend policy. Accounting, 6(5), 859-870. Web.
Nigri, G., & Del Baldo, M. (2018). Sustainability reporting and performance measurement systems: How do small-and-medium-sized benefit corporations manage integration? Sustainability, 10(12), 1-17. Web.
Sasser, W. E., & Klug, J. (2004). Benihana of Tokyo: Harvard Business School case. Web.