Case Summary:

Part A:

Kanpur Confectioneries Private Limited (KCPL), is a biscuit manufacturing

company set up in 1945 in the state of Rajasthan to sell Candies initially with a Brand
Name of “MKG”. In 1954 KCPL, moved its operations to Kanpur. In 1970 the
company stopped its production of candies and focused on production of glucose
biscuits. The growth of KCPL was phenomenal till 1970. It became the national
leader in terms of market share until it dropped to number two in 1974 .
From 1975onwards, KCPL faced heavy competition from other companies
which marked the beginning of its fall.
In 1980, KCPL doubled its monthly production capacity from 120 tons to
240 tons. Severe competition in the market, decline in sales, and poorly managed
operations saw the fall of KPCL thereafter. In 1986, KCPL joined hands with
Pearson Health Drinks Ltd. and used its surplus capacity to manufacture health
biscuits for Pearson Health Drinks Ltd. The outcome was not as expected and the
situation for KCPL did not improve as PHDL’s biscuits were seen as over priced.
In 1987, A-One Confectioneries Private Limited (APL), the national
market leader in biscuit manufacturing, presented KCPL with the offer for
contract manufacturing units.

Part B:

In December same year KCPL took the offer and joined APL as a CMU with an
order of 69 MT/ Month which eventually became 300 to 400 MT by January next
year and eventually 100 MT thereafter. KCPL beought into action several reforms
which led to increase in automation and also solced the problem of absenteeism.
Absenteeism fell from 50% to 2%. In september 1990, KCPL went ahead and closed
their MKG production line and also that of Pearson Biscuits.
From 1994, KCPL did well and improved their quality standards due to regular
interaction with APL and APL’s other CMUs. Gradually, KCPL tried to get into other
businesses too, like the rubber industry business , wind energy business and software
business. They implemented the 5s workplace organization concept in 1998 and also
installed 5 computers in their offices. In 2001, KCPL was doing well and moved into a
new office.

Problem Statement:

Part A:

KCPL’s decision whether to make its own brand name “MKG” number one in the
market or to become a CMU for APLK and survive its fall.

Part B:

To regain its own brand MKG and have the next generation of the family work for
KCPL or to continue its journey with KCPL.
Objectives:

Part A:

 To minimise its losses and increase efficiency and profits.

 To follow the principles and tenets set by the family.
 To make MKG brand no 1 in the market in India.

Part B:

 To bring back MKG brand.

 To get everyone in the next generation of the family to work in KCPL.

SWOT Analysis:

Strength Weakness

Opportunity Threats

Strengths:
 Experienced Employees
 Orderly and punctual workers
 Quality Standards.
 Implementation ofAutomation.
 Implementation of 5S Model

Weaknesses:
 Diversifying did not work.
 KCPL was still only a CMU without its own brand name.

Opportunities:
 Increasing their capacity.
 Have new production line and get back with their brand name.
Threats:
 Continuing with APL could get some of their family’s future generation out
of the business.

Porter’s Analysis:

1. Competition in the industry:

 KCPL faced competition from APL and a large number of unorganized small
companies.

 After becoming a CMU, they had no competition from other CMUs of APL
because they were receiving orders of whatever APL had promised them and they
were satisfied.

2. Potential of new entrants into the industry:

 KCPL was once number 1 in the market, but APL beat them into that spot due to
their aggressive marketing strategy and efficiency in operations.

 KCPL had a good relation with APL and did not have to woory about competition
with the other CMU and enjoyed special status of MOther CMU with APL.

3. Power of suppliers:

 KCPL maintained good relation with their suppliers.

 After becoming a CMU, APL scheduled their suppliers and they did not deal with
them directly.

4. Power of customers

 APL was number one in the market once and customers loved the brand MKG
due to its easy availability. However, they could not target some customers due t
their pricing.

 After becoming a CMU, they did not have to worry about selling their product as
they received contracts from APL regularly.

5. Threat of substitute products

 There ere no alternate substitute products competing with biscuits.