KCPL
Situation Analysis:-
Kanpur Confectionaries Private Limited (KCPL) was established by Mohan Kumar Gupta in 1945 as a Candy manufacturer, later he switched to biscuit manufacturing also. Now it’s running by his sons Alok , Vivek and Sanjay, under the brand name of ‘MKG’ .It was the second largest biscuit manufacturer in 1973-74, but during the late 70’s due to increase in competition, its sales declined and it started making losses. Due to the losses they have to shut down their candy manufacturing in early 80’s.Later in 1985 they tied up with Pearson Health Drinks Limited (Good Health Brand) but it is not fruitful so far. Now in 1987 they got an offer from …show more content…
Sales decreased from 3 crores (1983-84) to 2.6 crores (1986-87: The monthly sales were 120 Tonnes with 18100 per tonnes -120*18100*12=2,60, 64,000).
2. The capacity of the firm was increased from 120-240 tonnes per month in 1980-81 but still the output is 120 tonnes per month.
3. The absenteeism of daily casual labours which is 50%, leading to uneven production on a daily basis.
4. Inefficient use of raw materials leading to wastage of raw materials as compared to its competitors, may be due to improper procedure and poor machinery.(As per the Exhibit-1:MKG produces 1 ton output using 1.1 ton of inputs whereas APL produces 1 ton output using 1.03 inputs).
5. Increasing competition in the market with 70 units coming up between 1975 and 1980.
6. Loose sale of MKG products in urban and Semi-urban area leading to decrease in brand value of the …show more content…
Rebuild their strategy with innovative idea under their own brand name.
3. Arrangements with Pearson should be revived.
Action plan and Implementation:-
KPCL should work on reviving its brand. As accepting APL’s offer is not much profitable moreover they will lose their identity, they have a market presence so change of strategy will be a better option.(APL has offered conversion rate of 1.5 Rs per kg i.e. 1.05 Lakhs on a monthly sale of 70 ton initially which is not enough to pay the fixed salary of 2.75 Lakhs adding to that there are other commitments, interests and tax. And they are also incurring losses in their existing production line.)
Moreover APL is a south brand and culture/taste is south is different from north so, the deal might lose the existing customer base. Adding to that the ethics set by Mr. Mohan might not be taken care by APL and this way the current management will not pass a good message to its predecessors.
KPCL should work on technology up-gradation, full utilization of their capacity, reduce the wastage of raw materials and optimal use of workforce which is now having a 50% absenteeism leading to uneven production.
They should revive the wage rate from 50 Rs which will reduce the
Situation Analysis:-
Kanpur Confectionaries Private Limited (KCPL) was established by Mohan Kumar Gupta in 1945 as a Candy manufacturer, later he switched to biscuit manufacturing also. Now it’s running by his sons Alok , Vivek and Sanjay, under the brand name of ‘MKG’ .It was the second largest biscuit manufacturer in 1973-74, but during the late 70’s due to increase in competition, its sales declined and it started making losses. Due to the losses they have to shut down their candy manufacturing in early 80’s.Later in 1985 they tied up with Pearson Health Drinks Limited (Good Health Brand) but it is not fruitful so far. Now in 1987 they got an offer from …show more content…
Sales decreased from 3 crores (1983-84) to 2.6 crores (1986-87: The monthly sales were 120 Tonnes with 18100 per tonnes -120*18100*12=2,60, 64,000).
2. The capacity of the firm was increased from 120-240 tonnes per month in 1980-81 but still the output is 120 tonnes per month.
3. The absenteeism of daily casual labours which is 50%, leading to uneven production on a daily basis.
4. Inefficient use of raw materials leading to wastage of raw materials as compared to its competitors, may be due to improper procedure and poor machinery.(As per the Exhibit-1:MKG produces 1 ton output using 1.1 ton of inputs whereas APL produces 1 ton output using 1.03 inputs).
5. Increasing competition in the market with 70 units coming up between 1975 and 1980.
6. Loose sale of MKG products in urban and Semi-urban area leading to decrease in brand value of the …show more content…
Rebuild their strategy with innovative idea under their own brand name.
3. Arrangements with Pearson should be revived.
Action plan and Implementation:-
KPCL should work on reviving its brand. As accepting APL’s offer is not much profitable moreover they will lose their identity, they have a market presence so change of strategy will be a better option.(APL has offered conversion rate of 1.5 Rs per kg i.e. 1.05 Lakhs on a monthly sale of 70 ton initially which is not enough to pay the fixed salary of 2.75 Lakhs adding to that there are other commitments, interests and tax. And they are also incurring losses in their existing production line.)
Moreover APL is a south brand and culture/taste is south is different from north so, the deal might lose the existing customer base. Adding to that the ethics set by Mr. Mohan might not be taken care by APL and this way the current management will not pass a good message to its predecessors.
KPCL should work on technology up-gradation, full utilization of their capacity, reduce the wastage of raw materials and optimal use of workforce which is now having a 50% absenteeism leading to uneven production.
They should revive the wage rate from 50 Rs which will reduce the