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Kanpur Confectioneries Private Limited

KCPL was established in 1945 in Jaipur, India by Mohan Kumar Gupta to produce sugar candies under the brand name 'MKG'. By the 1970s, KCPL had become a leading manufacturer of biscuits and candies in northern India. However, increasing competition and some unethical practices in the market caused KCPL's sales and market share to decline in the 1980s. In 1987, KCPL received a proposal from APL, the national leader in biscuits, to supply them biscuits which would require changes to KCPL's production process and equipment, presenting KCPL with a dilemma on whether to accept the

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Bhawna Tiwari
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53 views5 pages

Kanpur Confectioneries Private Limited

KCPL was established in 1945 in Jaipur, India by Mohan Kumar Gupta to produce sugar candies under the brand name 'MKG'. By the 1970s, KCPL had become a leading manufacturer of biscuits and candies in northern India. However, increasing competition and some unethical practices in the market caused KCPL's sales and market share to decline in the 1980s. In 1987, KCPL received a proposal from APL, the national leader in biscuits, to supply them biscuits which would require changes to KCPL's production process and equipment, presenting KCPL with a dilemma on whether to accept the

Uploaded by

Bhawna Tiwari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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KANPUR CONFECTIONERIES PRIVATE LIMITED

SUMMARY
KCPL found in 1945 by Mohan Kumar Gupta in Jaipur Rajasthan. Started with selling of sugar
candies with the brand name ‘MKG’. He earlier worked in a candy business as a worker and
then established his own company in 1946 in Rajasthan after taking dealership. Due to
completion it shifted to Kanpur, and became the 1st entrepreneur to set up a candy making
unit in Uttar Pradesh. After a successful run he decided to extend his business to biscuits
venture.
They prepare biscuits with some special ingredients with unique formula. Every ingredient
cross checked twice before supplying for manufacturing with focusing on impurities and in
the end of the cycle they pack the biscuits manually in 100gms packets. KCPL had approx. 90
permanent employees’ as well temporary workers for operating. They have different
monthly averages of productions and supplies with different time series. But in case of
casual/temporary employees the main issue is workers are not regular for their assigned
duties so therefore, the whole operation is taking a lot of time to proceed. This whole
operations procedure is observed by Arun Kapoor.
Now the company is looked after three of his sons , Alok Kumar(1960), Vivek(1965) and
Sanjay(1974) who were from different domains and were running the business according to
their fields such as engineering, commerce, arts and started looking for financial and nexus,
HR and logistics, administration etc. Some basic norms demarcated by the kindred were like
customers are everything, respecting every terms and conditions, laws, ethics, and not parry
the taxes etc.
With time MKG become very successful brand in the north. Their main consumers were
middle class families. SBI was the funder for their company since 1954.
By 1973-74 there was only two companies “A-One Confectioneries Private Limited” and
“International Biscuits Limited”. Technically, completion was raised by 70 units. Though
some were operating in and greasy terms. Very unethical practices were taking place within
the market for going high and also regimenting the taxes then for the reputation of the
company manufacturers used to pay the taxes. In this new environment KCPL stabbed. That
couldn’t survive the market pressure with decreasing sales. At same time the candy business
also started going to loss because of declining in margins. So, they make a conclusion for
shutting down the candy business in 1985.
Then in 1985 Pearson Health Drinks Limited came into frame. They decided to enter into
health biscuits with Pearson. Though Pearson also promised them to give them some
technical support and take off some amount of production. KCPL found this a good
happening in many ways. But somehow they do not respond to the given promise and
observed the quality closely. As resulted the market counteraction was not so well-
becoming.

APL’s PROPOSAL TO KCPL -


In 1987, KCPL received proposal from APL, the national leader in biscuit industry, for the
supply of 70 tonnes per month. The APL will also inspect the production process of the KPCL
and recommended changes in process and equipment’s, if needed.
The cost that will be incurred in these changes is to be bared by KCPL. A quality control
officer will be employed by the APL at the plants of KCPL to monitor the Quality Standards
It would also supply ‘APL secret ingredients ‘but KCPL has to buy the Raw Material from the
authorized supplier of APL
KCPL faced the dilemma to accept the offer or not
The judgement of KCPL will be evaluated on certain criteria like
 Effect on the Profit of KCPL after signing the deal with APL
 The process and technical innovations APL will bring
 Family image and long term goal of KCPL to become a national leader

CENTERAL THEME
The central theme or study of this case is that APL gave offer to KCPL to tie up with them for
3 years. As KCPL was a successful leading brand but due to some crises and unethical
activities in market the KCPL started declining in every way resultant loss and decreasing in
productivity. Thus, KCPL couldn’t make this out even they tried to collaborate but again
failed. At last APL gave proposal to KCPL who is leading national brand as they want to
extend their supply but KCPL is unable to decide as there are many advantages but also
disadvantages after accepting their proposal.

PROBLEMS FACED BY KCPL


As a successful brand in one time they faced a lots of problems before becoming the best
and after becoming the best as well.
In very first the one problem they faced is new comers in market and they couldn’t compete
with them. As they were leading company on that time also when their business was only
with the Rajasthan but new comers come up with new strategies and ideas to how to
sustain in market. On other hand the cost of production was a bit high which was one of the
Central problem of KCPL. Resultant they faced financial crises.
Then they shifted their business to the state of UP Kanpur. Where they played so well and
become one of the biggest leading company of north by their hard working and dedication.
They also faced problems for raw material as well. The suppliers of raw materials were used
to sometimes deliver the bad quality of products. As result they needed to give their double
time for cleaning, removing impurities and etc.
On other hand the casual or temporary workers of the company were not regular. Taking
leave without even informing the supervisor. Therefore manufacturing the products leads to
delay automatically and also the level of production was decreasing.
After all this the major problem faced by the company was completion in ethical as well as
unethical ways. In 1973-4 Glucose Biscuits was the growing sector of glucose industry, so
many unorganized sector entered the market. A-one Confectionaries Private Limited (APL)
and International Biscuits were the dominators of the market and these new entrants made
the market more competitive. KCPL got stucked in middle as they cannot increase the prices
of the product whereas the cost of raw material and cost of labor was increased. Then there
was some unethical practices were also taking place like some small businesses were
making products and selling them under the duplicate name of branded companies, not
paying the taxes, producing unhygienic products with zero health concern, misusing the
brand names and so on. Between 1983-4 KCPL incurred huge losses, and production
decreased from 200 tonnes to 120 tonnes declining the KCPL’s Market standings to 4rth
position
They decided to collaborate with Pearson as well but failed there too as Pearson promised
something but couldn’t make up as resultant loss in goodwill of company and decline in
productivity.

QUESTIONS
1. What is KCPL’s business?

KCPL’s business was all about making sugar candies. And then due to some financial crises hey
shifted to Kanpur and become the leading company in candies making and extend their business
to biscuits.

2. Who is the customer?

The customers were mainly middle class families.

3. Value of customer

In KCPL the value of the customer played a very precious role as the company treated them as a
king and it’s on their hands to decide whether KCPL had the capability to sustain more in the
market or not.
6. What positive thing KPCL would’ve done to penetrate in the market?

KPCL would’ve created the candies in different ways and increased the quality of the biscuits and
the candies as well. And they would’ve formed the product in the market by giving varieties in
creams also, they would attract the children.

BOSTON CONSULTING GROUP MATRIX (BCG MATRIX)

KPCL’s MATRIX

HIGH

MARKET
STAR ( BISCUITS) ?(HEALTHY BISCUITS)
GROWTH

RATE

LOW CASH COW (VARIETY) DOGS(candies)


MARKET

GROWTH HIGH LOW

RLATIVE RELATIVE

MARKET SHARE MARKET SHARE

In this model we can see that,


KCPL started from Healthy Biscuits with high growth rate and low market share as they were
the newly attempted idea in initial stage
Then they shifted from Question mark to high growth rate and high market share that is
STAR, as now they are developing their market shares and increasing the growth through
their appropriate supply
 After worse, with low market growth and high market share they shifted to the Category of
Cash Cows now they have enough of the supplies but can’t grow rapidly because of
competitions and changes in External causes
And the with low market growth and low market share, it showed the shutdown stage of
the candy business
 

CONCLUSION
The clear conclusion is that they are still deciding whether they need to accept the business or
not and also if yes then focusing on how to do settlement in market.

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