KANPUR CONFECTIONERIES

PRIVATE LIMITED

CASE ANALYSIS
 COMPANY PROFILE
KANPUR CONFECTIONARIES PRIVATE LIMITED

 Established in 1945
 Sold sugar candies under the brand MKG
 Set up a biscuit business to diversify the business (ploughing back of
profits)
 Employee absenteeism, shrinkage of profits (cost and selling price) led to
candy business shut.
 Partnered with Pearson Health Drinks Limited, which is a multinational
company selling health drinks
 Stuck in aggressive competition from organised as well as unorganised
sector in the biscuits industry

 BRAND PROMISE :- Quality | Crispiness | Affordable Pricing

 COMPETITION ANALYSIS

ORGANISED UNORGANISED
SECTOR SECTOR

Economies of Scale Low setup costs

Used similar
Low wastage sounding names
and imitated
packaging

High negotiation Cumulative tax

benefits in cost benefit of 20.95%
(15% + 7%)
 PROBLEMS WITH
KANPUR CONFECTIONARIES PVT. LTD.
(KCPL)

U.S.P H.R. ISSUES MARKETING

OPERATIONAL MISMANAGEMENT
CONFLICT
INEFFICIENCY

Price Operational
inefficiencies Impact on
Reduction is
Uneven and due to labour brand
not possible
Constrained absenteeism. delivery due
with target
supply of raw to neglection
market being Lack of
material. of
middle class managerial malpractices
in urban and expertise at in the
semi urban executive
Lack of Storage distribution
cities. level.
Infrastructure. network.
OFFER FROM A-ONE CONFECTIONARIES PVT. LTD.(APL)
Contract Manufacturing

POSITIVES NEGATIVES
Capacity Utilisation Loss of Independence

Improvement in Quality control Bleak future prospects of family

and Operational efficiency business and reputation

No Brand building and Changes in equipment at own cost

marketing expenses (additional investments)

Minimized business risk and Increased reporting and

distribution expenses compliances (daily reports)

Assured Return Hampered relation with Pearson

Minimized wastage
 FINANCIAL ANALYSIS
MKG ( 120 T ) PEARSON ( 50 T ) APL ( 70 T )
7,500 (Maida) Rs. 3/kg con. charges Rs. 1.5/kg con. charges
+5,200 (Vanaspathi) 50 T = 50,000 Kgs 70 T = 70,000 Kgs
+2,400 (Sugar)
+1,000 (P&P) Total Con. Charges = Total Con. Charges =
+300 (Casual Labour) 1,50,000 1,05,000

16,400 (1,000+300) x 50 = 300 x 50 = 21,000

65,000
16,400 x 120 = 19,68,000

19,68,000
+2,75,000 (Salary)
+10,000 (Interest)
+60,000 (Others)

23,13,000 65,000 21,000

21,72,000 1,50,000 1,05,000
(1,41,000) 85,000 84,000
 VERDICT
KCPL should go ahead and sign the contract
manufacturing agreement with APL and ripe the
benefits of :-

o Expertise in managing large company

o Effective production process
o Technical expertise
o Optimum utilization of production capacity
o Financial Stability for 3 years
 BACKUP PLAN
o Establish and Leverage good relations with premium
institutions and high quality suppliers to elevate
Production standards of MKG.

o Regain Brand Value for MKG by keeping lower initial

margins.
o Benefits of Economies of Scale

o Focus on Canteen Institutions or launch new products

targeting new market segments (Tier 1 cities)
GROUP #9

1) Suvid Sharma
2) Saksham Kalra
3)Preetika Sahai
4)Vivek Shukla
5)Rajiv Ranjan Singh