...Situation Analysis: KCPL was started in 1945 by Mohan Kumar Gupta, in Jaipur, Rajasthan, under the brand MKG. Between 1946 and 1950 thirty units were set up in unorganised sector in Rajasthan to sell variety of candies. As a result KCPL could not compete on costs and faced financial crisis. He decided to shift the production to another state and reduce costs, in 1954 he bought one and a half acres plot in Kanpur, Uttar Pradesh and set up a new unit, he advertised MKG in the leading newspapers and on hoardings at cross roads. By the end of sixties he was the leader in candies in the northern region. He decided to diversify into making glucose biscuits and selling under MKG brand. The business was profitable but there was a scarcity of maida, sugar and vanaspathi. In 1973-74 KCPL reached number two position in the market, Prince Biscuits was the leader and International Biscuits Ltd. Held the third position. Whereas APL was the overall national leader. In 1980-81 KCPL’s turnover was Rs.2 crores, with a net profit of Rs.20 lakhs, it doubled its capacity from 120 tonnes to 240 tonnes per month. The problem with KCPLwas absenteeism of workers. MKG biscuits were known for their quality, crispness and affordable price. The consumers were middle class families. Competition for KCPL increased with the new units of unorganised sector.Between 1983-84 and 1986-87 its sales declined and it incurred loss (See Exhibit 1). In 1985 Pearson Health Drinks Limited decided to diversify into health...
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...OBJECTIVE: Kanpur Confectionaries Private Ltd (KCPL) has the vision of emerging as a leading national brand in the biscuit industry and thus maintaining the family name and dignity. PROBLEM: APL is a leading national player in the biscuit industry and is a major competitor of KCPL. KCPL has to decide their response to the proposal of A-One Confectionaries Private Ltd (APL) about becoming its contract manufacturer. OPTIONS: KCPL has the following 3 options: • Option 1: Accept APL’s offer • Option 2: Become an independent contract manufacturer. • Option 3: Rebuild the “MKG” brand. DECISION: KCPL should work on reviving its brand. ACTION PLAN: KCPL has to work on technology upgradation, increasing capacity utilization and managing a efficient workforce. It also has to improve its brand image and target new profitable markets. CONTINGENCY PLAN: As a contingency plan, KCPL can accept the offer of APL. 1. SITUATIONAL ANALYSIS Mohan Kumar Gupta started Kanpur Confectioneries Private Limited (KCPL) in Jaipur in 1947 to sell sugar candy under the brand name of “MKG”. He later set up a production unit in Kanpur (UP) because of intense competition in Jaipur. He ventured into the biscuit industry with the “MKG” brand. Its turnover increased during the early 80’s. But with the stiff competition from the firms in the organized and unorganized sector its sales have declined and by mid 80’s it has started making losses (Exhibit 1). It became a contract manufacturer...
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...Written Analysis of Case KCPL Case Pranav Juneja (2011A50) SCMHRD,Pune Background Kanpur Confectioneries Private Ltd. (KCPL) was started in 1945 by Mr Mohan Kumar Gupta to sell sugar candies under the brand ‘MKG’. He expanded his business by increasing production capacity through setting up of more production units but as competition increased KCPL was not able to compete on cost and Mr Gupta decided to shift the base to Kanpur, UP. KCPL built a strong dealership in UP and the adjoining states and by the end of sixties MKG was the leader in northern region. KCPL decided to expand the business and entered into the market of glucose biscuits. By 1973-74 KCPL reached the second position in the market. However, competition increased with the setting up seventy units in the organized sector between 1975 and 1980. KCPL got stuck in the competition as it did not have the large enough presence to increase the scale of production nor it had the premium image to demand higher price for its product. As a result its sales declined in mid 80’s and it was not able to utilise its capacity fully. In 1985 Pearson Health Drinks Limited decided to outsource its supply from KCPL. KCPL considered it as a good offer because it will provide it with technical expertise but later Pearson did not provide it with any technical guidance and market response to the new line...
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...report of Kanpur Confectionaries Private Ltd. Dear Mr. Gupta, Please find enclosed the business analysis report of Kanpur Confectionaries Private Limited (KCPL) on the current situation. This report analyses the current financial situation of KCPL and its desire to become outsourcer for other manufacturers and provides the recommendation after the analysis. Thanking you. Sincerely, Rohit Saini Senior Consultant D.P. Strategy Consultants Plot 3, Okhla Industrial Area New Delhi- 110020 Email: rohit.saini@dpsc.com Outline of the Report In 1945, Kanpur Confectionaries Private Limited (KCPL) was started to sell sugar candies but also began manufacturing and selling biscuits under the brand MKG in 1970. In 1974, it became second in the northern region by selling 110 tonnes of biscuits with a capacity of 120 tonnes. In 1980-81, they earned a profit of ₹ 20 lakhs. They were not able to use their surplus capacity. The competition from organized and unorganized sector was increasing continuously due to which their sales got declined, and they incurred loss in the business. They got an offer from Pearson Health Drinks Limited in 1985 to manufacture the health biscuits for them. In 1987, they were considering to become outsourcer for A-One Confectionaries Limited (APL) as well in northern region. The problem KCPL is facing now to cover their financial loss while using their surplus...
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...Introduction: KCPL was started in 1945 by Mohan Kumar Gupta in jaipur to sell sugar candies under the brand MKG.after successful start Mohan Kumar shifted production to another state UP.to build further on his success he established network in Bihar and MP.went into candy business as raw material required were the same.1973-74 2nd in northen region. Reasons for decline in business: scarcity of ingredients, absentism of workers, stringent government laws.biscuit business is all that they have. Major problem: Kcpl is in dilemma and has to decide their response to the offer of becoming a contract manufacturing unit (CMU) of APL along with pros and cons of the offer. Possible solution available: * Rebuild ‘MKG’ brand Reason: vision of Mohan kumar gupta to be a national leader Legacy that they want to give to their sons (prestige issue) They take salary dependent business About brand: Mid range player: Consumers: Middle class families, urban and semi urban areas Small and medium sized institutions (360/2400 tonnes) Strategies to rebrand: Solve HR problem (casual workers) Increase Canteen share by targeting large institutions (quality, not premium brand problems) Control loose sell of biscuits (by spreading awareness about health issues that can arise by consuming loose biscuits) Brand advetisement: Vernacular newspaper Possible Solutions to HR problems: Restructure production process by introducing new machienary less workers Quality control ...
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...Assignment 1: Kanpur Confectioneries Private Limited A report submitted to Prof. Gita Chaudhuri In Partial fulfillments of requirements of course Written Analysis and Communication- I By Ashutosh Shukla Section A Roll No 155026 On 08-07-2015 1 Letter of transmittal Mr. Alok Kumar Gupta Chairman and Managing Director Kanpur Confectioneries Private Limited Church Road, Kanpur 10 September, 1987 Subject: Consulting report to Kanpur Confectioneries Private Limited Respected Sir, As per requirements of your firm, my entity has analyzed your firms’ situation and has come out with the best possible solution. The reports along with required exhibits are enclosed herewith. Please go through the report and feel free to contact us in case of any query. Yours sincerely, Ashutosh Shukla Chief Executive Officer XYZ Consultants Connaught Place New Delhi-110001 Xyz_consultants_in@gmail.com 2 Outline of report The constituents and brief summary Situational Analysis: Foundation of KPCL, critical analysis of KPCL as an entity, what led to the present situation, competitors of KPCL and its standing amongst them. Problem Definition: For which entity the biscuits are to be manufactured keeping in mind the profits, using the surplus capacity and augmenting the value of MKG brand. Options: 1) Manufacture for KPCL and Pearson 2) Manufacture for KPCL and APL 3) Manufacture for KPCL, Pearson and APL 4) Manufacture only for KPCL Criteria for evaluation: Increasing profits, long term consequences...
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...Consultant, XYZ Company, Ahmedabad. September 7, 2015 Mr. Alok Kumar Gupta, Chairman and Manager Director, Kanpur Confectionaries Private Limited. Dear Mr. Alok, I hereby submit the report with my recommendation that KCPL should focus on rebuilding its own brand as it can help company to achieve his vision without diluting the control over its operations. Please review it and provide feedback. Also, do revert back in case you have questions or clarifications. Thanking you, Yours sincerely, Dhriti Dhyani SITUATION ANALYSIS: KCPL was started in 1945 by Mohan Kumar Gupta in Jaipur to sell sugar candies under the brand name ‘MKG’. Due to increase in competition, he decided to shift his plant to Kanpur, Uttar Pradesh where he promoted ‘MKG’ as a leading brand. Alok Kumar, the eldest son of Mohan Kumar, joined KCPL in 1960. In 1970, because of the positive trends of net profit, he decided to diversify business into glucose biscuit manufacturing. It showed growing demand at more than 15% per annum resulting to 25% rise in net profit margin. He then extended his range by providing MKG’s cream, salt and Marie biscuits. In 1973-74, Prince Biscuits was leading the market with a monthly sale of 130 tonnes followed by KCPL with sales of 110 tonnes. International Biscuits with sales of 100 tonnes per month stood third in market. A-One Confectionaries Limited(ACL) was the national company, mainly leading in South India with 900 tonnes per month capacity....
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...Situation Analysis: Kanpur Confectionaries Private Limited (KCPL) was the second largest biscuit manufacturer in the Northern region in 1973-74, with monthly sales of 110 tonnes under its MKG brand. In 1980-81,with a view to grow further in the region and also expand into the national market, the production capacity was doubled to 240 tonnes, but only 50% of that capacity is currently being utilized for the MKG brand. In the past 13 years, the MKG brand has grown by only 9.1%, even though the production capacity increased by 100%. In the first 10 years after the increase in production capacity, the sales turnover increased year over year, but started following a declining trend after that. In the previous year, 1986-87, the sales turnover under the MKG brand was ₨ 2.6 crores; a drop of 13.12% from 1983-84. The drop in sales can be directly attributed to two reasons: 1) Rising unorganized competition – The unorganized sector evaded excise duties and sales taxes and had no onus on quality, which helped them price their biscuits much lower than MKG. In the previous year, MKG paid taxes of Rs 4163 per tonne of biscuits sold. 2) Rising organized competition – Due to increased organized sector manufacturing units, MKG could not increase its prices to compensate for rising costs of labor and material, which led to declining margins. Apart from the above, there were various indirect reasons which resulted in MKG not being able to sustain competitive pressure: 1) Raw Material wastage...
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...Gautam Budh Nagar, U.P., 201314 MEMO November 08, 2014 To: Alok Kumar Gupta (Chairman and Managing Director-KCPL) From: Varun Jha (Executive Assistant to Chairman KCPL) Subject: Report for APL proposal The offer by A-One Confectioneries Private Limited has been analyzed. The report contains the Situation analysis, problem identified and options available. The options available have been evaluated. Recommendation has been made considering the critical criteria of evaluation. An action plan in regard to the recommended option has also been enclosed. Situation Analysis Since the biscuit industry provides an easy setup and lucrative net profit margin, there had been a proliferation of both organized and unorganized units in this sector. With increased competition from both the sectors, KCPL has stuck in the middle. It cannot increase the price to cater the rising cost of labor and capital; nor does it have the premier image to get a higher price. For last three years, sales had been continuously declining and it had not acted diligently to identify and overcome the issue. To utilize its surplus capacity, the company contracted with PHDL (Pearson). The market response to Good Health Biscuits is not encouraging. Customers perceive A-One biscuit as health and energy providing biscuits, which is available at two-third price of Health biscuits. APL has offered KCPL to produce for them as a CMU (Contract manufacturing Unit). The offer has come with an initial order of 70 tonnes...
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...the reference to the situational analysis done by us on the Kanpur Confectionaries Private Limited (KCPL) manufacturing units for doing contract with A-One Confectioneries Private Limited (APL). I hope you find this report satisfactory. Sincerely, Bhumil Patel Patel Consultant Enclosure:- KCPL.pdf Executive Summary The case is about the Kanpur Confectionaries Private Limited (KCPL) a family business located in Kanpur, UP and started by Mohan Kumar Gupta in 1945, now the company is looked after three of his son. The KCPL is Glucose biscuit manufacturing company and is known for its good quality, crispness and affordable price. In 1973-74, Glucose biscuit were the growing segment in the biscuit industry. The KCPL reached second position in the market with a monthly sale of 110 tonnes. In 1980-81, KCPL doubled its capacity to 240 tonnes per month from 120 tonnes per month. The turnover was Rs. 2 crores in 1979-80 and Rs. 3 crores in 1983-84. But its sales declined between 1983-84 and 1986-87, the capacity was rendered surplus and incurred loss. In May 1986, KCPL signed agreement to use its surplus capacity of 50 tonnes per month, with promise off take of 100 to 125 tonnes in future. In 1987, KCPL received proposal from APL, the national leader in the biscuit industry, for the supply of 70 tonnes per month. The APL will also inspect the production process of the KCPL and recommend changes in...
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...Confectioneries Private Limited (KCPL), was in a meeting with his brothers, Vivek, 42, and Sanjay, 33,to decide their response to the proposal of A-One Confectioneries Private Limited (APL) that KCPL might consider becoming its contract manufacturer. APL was a leading national player in the confectionery industry. It had desired to expand its supply to the market by subcontracting orders to other manufacturers. However, it wanted to retain full control over the quality and production processes of biscuits produced for them. It had promised the sub-contractors that it would compensate them adequately in terms of volume of business and conversion charges. To KCPL the advantages were in getting assured return on its investment and access to APL's manufacturing expertise but the disadvantages were in the possible loss of independence in decision making, dilution of ‘MKG, ’company’s own brand, , and family prestige. The Company KCPL was started in 1945 by Mohan Kumar Gupta, then 28, in Jaipur Rajasthan State, to sell sugar candies under the brand `MKG’. Earlier, he was a worker in a candy unit in Jaipur. He started his own business with the dealership of candies produced by others. With the experience gained, he set up a production unit in Jaipur in 1946. Thirty units were set up in the unorganized sector in Rajasthan to sell a variety of candies between 1946 and 1950. As competition increased the net profit margins came down. KCPL could not compete on costs as its...
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...and Managing Director of Kanpur Confectioneries Private Limited (KCPL), was in a meeting with his brothers, Vivek, 42, and Sanjay, 33, to decide their response to the proposal of A-One that KCPL might consider becoming a contract manufacturer to A-One Confectioneries Private Limited (ACPL). ACPL was a leading national player in the confectionery industry. It had desired to expand its supply to the market by subcontracting orders to other manufacturers. It had also desired to retain full control over the quality and production processes. It had promised the sub-contractors to compensate them adequately in terms of volume of business and conversion charges. To KCPL the advantages were in getting assured return on its investment and access to ACPL’s manufacturing expertise but the disadvantages were in the possible loss of independence in decision-making, dilution of company’s own brand, MKG, and family prestige. KCPL and its Background KCPL was started in 1945 by Mohan Kumar Gupta, then 28, in Jaipur, Rajasthan, to sell sugar candies under the brand ‘MKG’. Earlier he was a worker in a candy unit in Jaipur. He started his own business with the dealership of candies produced by others. With the experience gained, he set up a production unit in Jaipur in 1946. Between 1946 and 1950, 30 units were set up in the unorganized sector in Rajasthan to sell a variety of candies. As competition increased the margins came down. KCPL could not compete on costs as its costs were higher than the other...
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...Subject: Recommendation to Kanpur Confectionaries Private Ltd. Dear Mr. Gupta, On behalf of the Consulting and Analyzing Team (CAT), I present to you the report containing recommendations and the action plan for the benefit of the Kanpur Confectionaries Private Ltd. Outline of the Report Kanpur Confectionaries Private Limited (KCPL) is a family business that is into glucose biscuit production. It was setup by Mohan Kumar Gupta as a sugar candy business. But he soon diversified it into biscuit production unit because of market related issues and low technological requirement. Mr. Gupta had always aspired to make ‘MKG’ a leading brand. He put in a lot of efforts and that showed off. The company performed well in the earlier stages gaining a good amount of market share and profit (and hence revenues too). But due to ever increasing competition in the market, the performance of KCPL gradually started to deteriorate. Eventually, a company that gained 20 lakhs a year started losing more than 15 lakhs a year. Also, they shut off the sugar candy business. Seeing this, two companies proposed offers to KCPL. Problem Statement: What shall KCPL do in order to regain the brand (MKG) popularity and profitability in the biscuits market and fully utilize its production capacity keeping its integrity intact? The options include the following: 1) Accept A-One Private Limited’s (APL) proposal in addition to continuing its own production of 120 tons and stop manufacturing for Pearson...
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...Situation Analysis Kanpur Confectionaries Private Limited (KCPL) is a family owned business, producing glucose, cream, salt and Marie biscuits under the ‘MKG’ brand. MKG is a popular brand among the middle class families in urban and semi-urban areas of North India and the biscuits are known for its quality and affordability. KCPL’s founder’s vision is to emerge as a leading national brand in future. Once among the leaders of the market in 70’s with fairly high revenue, KCCL stands stuck in the middle of competitive environment today. The glucose biscuit industry is very attractive due to growing demand in India and due to high margins as much as 25%. The process of production is very simple, requires low investment and less skilled labor, making it an easy to enter industry. Rise of unorganized sector has increased competition. Two national players, A-One Confectioneries Private Limited (APL) and International Biscuits Limited dominate the industry. APL’s average monthly sale was 200 tonnes. Being on the number two position with monthly sale of 110 tonnes in the regional market and responding to the growing demand of glucose biscuits, KCPL doubled its capacity from 120 tonne per month to 240 tonne per month in 1980-1981. But high absenteeism rate of employees, 50% and scarcity of ingredients like maida, sugar and vanaspathi led to uneven production. Current average monthly production is 120 tonnes. Costs of labor and materials are rising. 70 units in unorganized sector were...
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...https://www.scribd.com/doc/58725595/Kanpur-Confectioneries-Pvt-Ltd https://www.scribd.com/doc/106542916/kcpl-ppt http://www.termpaperwarehouse.com/essay-on/Kcpl-Case-Analysis/95417 (Positive) (Negative) On the basis of SWOT Analysis the following criteria are developed: (1)Profit(2)Advantages to business(3)Disadvantages to business(4)Future of business and Brand name OPTIONS : i. Become CMU for A ONE CONFECTIONERY ii. Re-structuring the production process and introduction of mechanized process iii. Increase productivity of current workforce iv. Supply to canteens of institutions EVALUATION: i. Become CMU for A ONE CONFECTIONERS PVT.LTD.:(1)Profit:Conversion charge of Rs.1500/tonne is paid and the fixed expenses are:Rs. 3, 85,000(Salary=2, 75,000 + Interest=50,000 + Others=60,000)So to reach at break even point:BEP= fixed cost / contribution per tonne= 385000/1500= 257(approx.) tonnes/month(2) Advantages: No expenses on advertisement, attracting customers or brand building. Regular income Expertise in production Low risk (3) Disadvantages: No independence in decision making Contract will bind KCPL to continue business as CMU for 3yrs Uncertainty of future relations with APL. If ACL asked to change production process or equipments then capital expenditurewill have to be made by KCPL(4) Future of Business and Brand name:If the company is successful in carrying out the orders regularly the company can beassociated with APL...
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