Kcpl

In: Business and Management

Submitted By pranav86
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Pages 5
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 of biscuits was not good. In 1987, national market leader APL offered KCPL to be its Contract Manufacturing Unit (CMU).

Problem Definition

• KPCL is finding it difficult to survive in a high competition market because of competitive pricing in the market. KPCL is not being able to reduce its production cost and is not in a position to raise prices because of lack of brand value.…...

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