Assignment-2

Jiro Dreams of Sushi

A report submitted to
Instructor: Prof. Saral Mukherjee
Academic Associate: Ms. Anjali Abichandani
In partial fulfilment of requirements of the course

Elephants and Cheetahs: Systems, Strategy and Bottlenecks

INDIAN INSTITUTE OF MANAGEMENT, AHMEDABAD

Date: 7th August 2019

Submitted by:
Group 34 (Term 4)

PGP 2018-20, IIM Ahmedabad

Ankush Jain | Juhi Ganvir | Parikshit Das | Shubham Verma| Poonam Kambli | Steffi Chinir | Rishabh Jain

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Executive Summary

Sushi is staple food of Japan and is highly commoditized. It always had a very simple composition and
making process. Simplicity was synonymous with sushi until the new conveyer belts came into
operation. Despite this Jiro has maintained the old ways and resolved to keep improving his sushi, this
continuous strive for perfection even at the age of 85 differentiates Jiro from others and forms the soul
of Jiro’s restaurant. While it is an autopoietic system, the sustainability of the business due to Jiro’s age
and his son not being able to match his father’s legacy, is one of the biggest concerns. Sourcing of tuna,
keeping in mind the slow extinction due to overfishing, is a supply side bottleneck and needs prior
attention. In addition, rise of the conveyer belt operation structure also serves a challenge to the popular
working ways of Jiro.

To serve the above concerns, we recommend Yoshikazu should focus on the scope, workforce and
organization domains to ensure the same degree of aura and passion that Jiro has been able to achieve in
his tenure. We would also recommend a structured backward integration towards the tuna suppliers,
which may cater the problem of its extinction.

Another possible constraint can arise post the leadership is completely handed over to the next
generation, when Mr. Jiro dies, which is upholding the legacy and aura which may become a bottleneck.
Analyzing the situation and working on our concepts and rationales, the above summarized points have
been substantiated below.

The detailed report follows hence.

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 Analysis of Existing Strategy

Jiro’s Sushi restaurant is an Autopoietic system in the domain of Jiro’s role due to following reasons-

 Self-Production: While Jiro is the driving factor behind the restaurant, he has been successful in
completely reproducing himself to regenerate the relations of production through Yoshikazu, proven
through the 3 star Michelin rating for sushi prepared by Yoshikazu. This was achieved through years of
dedicated training to his son. Even his younger son opened his own sushi restaurant based on his
father’s teachings
 Constant Interactions: The components in the system, like the skillset possessed by Jiro, may vary
from that of Yoshikazu, but Jiro trained him to maintain constant interactions to keep the process intact
and achieve the same level of perfection. While the characteristics possessed by Jiro may differ from
Yoshikazu, these characteristics do not matter as long as Yoshikazu is successful in maintaining the
interactions constant
 Homostatic System: The processes and operations across the value chain which form the variables
within the system are maintained constant through an internal feedback loop driven by internal
inspection from Jiro
 Autonomous Entity: All changes within the organization are guided through internal structural
changes, independent of the changes from the external environment. For e.g. marinating time of octopus
changed to 40-50 minutes, boiling of shrimp only when customer arrives, these give evidence to the fact
that all the changes are taking place on account of feedback by Jiro and not from any external
environment
 Individuality: Jiro strives to continuously create a sense of exclusivity by maintaining his own
identity. Thus, these processes specify the boundaries of operations for self-production thereby making
it a unity

Thus, we can conclude that this system is autopoietic and, by means of bi-implication, also a living
entity.

Dynamics of Operations:

The dynamic behavior followed by Jiro’s restaurant replicates Goal-Seeking Dynamic Behavior. This
is because Jiro’s ultimate goal is to achieve perfection and therefore work on developing the skill sets
continuously to achieve the level of perfection that he desires. Thus, in case of any discrepancy, he
endeavors to take immediate corrective actions in terms of negative feedback to redirect the system back
to his goal of achieving perfection. These corrective actions range from tasting the food himself before
serving, directing to re-cook the sushi in case it is below his expectations,

Thus, owing to the pattern of goal seeking behavior, the Soul of Sukiyabashi Jiro is Continuous Strive
for Perfection. The soul is kept intact through processes like making the apprentice practice as long as
perfection is not achieved, endless trials to master the art of cutting fish, maintain trustable tuna and rice
vendor who ensure best quality in the raw materials among others.

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 Domains of Decision Making:

We contrasted the two systems, Jiro’s and Conveyor belt Sushi in terms of eight domains below:

Domains Jiro Conveyor belt Sushi

Capacity  Limited seating capacity (10 seats)  Larger seating capacity
 High Utilization  Lower utilization
Facility Small size, fixed simple layout Larger size, complex layout (folds in
conveyor belt to serve more people within
same area)
Scope  Partnership oriented, trust in tuna and rice  Backward integration to increase product
suppliers who are best in business offerings (breeding tuna, salmons to arrive
 Strengthen the relationship to an extent at varieties like strawberry flavor)
that supplier only want to serve Jiro, no  No such high degree of partnership with
other restaurant any vendor, focus is on keeping costs low
Technology No technology adopted, the USP is the  Technology at each stage to reduce costs,
perfect touch and skills of the sushi high volumes and standardized offerings
Shokunin  Focus on investment in technology to
commoditize the art of sushi making
Workforce  Highly skilled apprentice who spend their Minimal workforce and substituting chefs
life to achieve perfection with machines to keep costs low
 Apprentice trained extensively (e.g. made
to eat good food to develop specific taste)
Organizatio Rigid hierarchical structure with Jiro  Low human intervention due to
n possessing very high locus of control mechanized processes
 No rigid structure in place
Quality Focus on Very High Perceived Quality Focus is on Performance and Serviceability
(Advance booking of 2-3 months),
Aesthetics (simple layout yet elegant) and
Performance (Michelin 3 star restaurant)
Planning High process planning in deciding the High operational planning (sourcing,
course to be served logistics, inventory) to keep costs low

The two system actually differ quite substantially in terms of both operations as well as value offerings.
In short, some key distinguishing factors in Jiro’s restaurant are:

 Low variety offered, no appetizers, fixed three course menu for all customers
 Huge investment in key resources which are the chefs (Human capital)
 After training chefs, the marginal cost is very low once chefs are adept in the art of sushi making
 High capacity utilization as restaurant is booked 2-3 months in advance

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 Thus, it has characteristics of an ‘Elephant’, except for dealing in high volumes and lowering down
price to marginal cost, both of which are justified by the premium positioning in the consumer’s minds.

Dimensions of Quality:

Throughout the value chain from sourcing fish to serving of the Sushi, Jiro has demonstrated strict
quality control. He never compromises on quality, he buys Tuna fish, shrimps, rice and octopus from the
suppliers who are the best in the market. His apprentices who work in kitchen also demonstrate precision
in the process of making the dishes. This unflinching focus on quality even on the minute details like the
seating arrangement of the guests sets Jiro’s restaurant a class apart from others.

Overall, the key dimensions Jiro focuses on are Performance (Michelin 3 star restaurant), Perceived
Quality (Advance booking and hefty price) and Conformance (Testing tuna at various stages). The
detailed analysis of dimensions of Quality are in Exhibit 1.

Diagnosis of Current Problems

Some of the potential threats that Jiro can face in future are:

1. Sustainability of the business:

The major potential threat is losing out on exclusivity and hence customers once Jiro retires or dies.
There is a possibility that Yoshikazu is not able to carry forward the legacy of the restaurant in Jiro’s
absence. Though he has acquired the skill sets to the satisfaction of Jiro, there is still skepticism about
becoming a successor in all parameters like whether Yoshikazu is capable of giving the same level of 10
year dedicated training to each apprentice and relations with suppliers. Additionally, whether he will be
able to pay attention to details and suggest internal corrective actions similar to Jiro is also doubtful.
Failure to do so would lead to changes in the interactions among components and thereby making the
system not autopoietic. Thus, if Yoshikazu is not able to replicate his father’s aura within the business,
then the sustainability of the business seems to be in perils of extinction.

2. Extinction of Tuna:
Jiro predicts increasing difficulties in sourcing ingredients, because of overfishing. It is getting harder to
find fish of a decent quality. The tuna stocks are declining each year. Even the younger fishes are caught,
hence not giving enough time for the fishes to be replenished. Since this business is heavily dependent on
tuna as the main raw material, it might be hard to sustain the business.

3. Rise of Conveyer belt sushi:

The conveyor belt sushi system is becoming popular even across countries. The system allows for
scalability because of the automation of sushi making by increasing the speed of serving large number of
customers. It is less dependent on the skill of the chefs, as most of the operations are automated. Further,
the ingredients are also not specific. Components in this system are highly replaceable. Thus, the
restaurant may face a threat of obsolesce.

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 We have identified two major bottlenecks in the system:

1. On the supply side, the bottleneck is the dwindling tuna reserves threatening the major raw material
used by the restaurant.
2. On the organizational front, the possibility of absence of Jiro in the near future may have a drastic
negative impact on the restaurant (absence of the senior leadership and the legacy of Jiro).

Recommendations

1. Sustainability of the business

In order to ensure sustainability of the business, there is a need to focus on the following domains:

Domain Recommendation
Scope Supplier revere Jiro, and in his absence Yoshikazu should be able to maintain the
same level of trust and aura. This is already being achieved as he has been going to
market to bring fish, he is taking more and more active role in the restaurant
Workforce Yoshikazu will have to ensure that apprentices receive same level of training and
values as given by Jiro, by keeping the same rigorous and thorough training process
in place
Organization Yoshikazu should ensure he grows into the role of a rigid perfectionist like Jiro and
maintain the span of control over apprentice

2. Extinction of tuna

To tackle this, key recommendation in the relevant domains are:

Domain Recommendation
Scope Backward integration with tuna suppliers to ensure in-house breeding of tuna
only for their consumption, and thus reduce dependence on dwindling tuna
supply
Planning By planning in advance the menu served and adopting a shift from tuna to other
species which are still prevalent (e.g. salmon), they can reduce this dependency
for sustainability

3. Rise of Conveyor belt sushi

The above comparison of Jiro’s sushi vs Conveyor belt sushi actually portrays how they serve
completely different customers and markets, and thus the threat of competition will actually not affect
Jiro’s restaurant as the continuous strive of perfection separates Jiro from other sushi restaurants.

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 Exhibit 1: Eight Dimensions of Quality applicable to Jiro's Restaurant

Quality Dimension Application in Jiro’s restaurant

Here performance can be measured in terms of taste. The Michelin rating committee
mentions that no matter how many times a person eats at Jiro’s restaurant, the taste is
Performance
always incredible. This consistency of superior taste and service at Jiro’s is a
testament of its performance.
Customers are always served the best Sushi at Jiro’s. The minimum reservation time of
Reliability one month shows how reliable Jiro’s restaurant in terms of taste. Moreover, Jiro and
his son rely on their suppliers to get the best fish, the whole system is built on trust.
Jiro’s always conform to the high standards they have set and keep improving on it.
Even if the Tuna is little tough they don’t serve it to the guests. Jiro and his son keep
Conformance
testing the sushi as various stages of preparations and this leads to adherence to Jiro’s
inimitable taste.
Although there is no product that is sold here, the main aspect of the food served at
Features Jiro’s is simplicity. They serve the food in three movements (rounds), with each round
having a unique experience.
Durability Since there is no product-life here, hence this dimension is not applicable
Since there is no product here, hence this dimension is not applicable. However, the
Serviceability
whole team at Jiro’s is very courteous to the guests. Jiro himself serves the customers.
The taste of the food at Jiro’s is unparalled according to the guests, food bloggers,
Aesthetics rating agencies who have indulged in Jiro’s. According to them Jiro has mastered the
craft of Sushi making and still keeps improving.
The public perception is that despite so many sushi outlets in Japan, Jiro’s is the best
Sushi-serving restaurant out there.
Perceived Quality
People have very high regards for Jiro’s outlet and are willing to wait for several
months and pay a hefty price for it.

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