Situation Analysis:

The Kanpur Confectionaries Private Limited (KCPL) was a family business started in 1945 by Mohan Kumar Gupta i n J a i p u r
R a j a s t h a n , t o s e l l s u g a r c a n d i e s u n d e r t h e b r a n d o f M K G , and was the second largest biscuit manufacturing
company in the north India.
Mr. Mohan had three sons and they were allocated the department as follows:
Alok- Finance and Liaison
Vivek-HR and Manufacturing
Sanjay- Marketing, Logistics and Administration
The glucose biscuit were the growing segment of the biscuit industry. The KCPL was well known brand in the north India for
selling high quality and affordable glucose biscuit. Since the product was not unique and also the entry and exit from the
biscuit manufacturing industry was very easy as not much skilled labor was required and also the cost of production was
less. The KCPL was not able to withstand the competition and its sales declined between 1983-84 and 1986-87, the capacity
was rendered surplus and incurred loss.
The KCPL was making losses due to two factors:
1. Organized Sector: During the period from 1975 to 1980, 8 new units were setup in the UP to produce biscuit. KCPL was
not able to compete with them due to rising cost and also could not increase the cost of its biscuit.
2. Unorganized Sector: During the same period, 70 new units came up, selling unbranded biscuits or selling them with
brand names sounding similar to the leading brands.
The market was also changed; the cost of raw material was increasing along with the labor cost. In 1986 KCPL signed
agreement with Pearson with initial order of 50 tonnes per month supply of biscuit with promised of taking of 100 to 125
tonnes per month with conversion rate of Rs. 3 per kilo after reimbursing fully the cost of material.
A-One Confectionaries Private Limited (APL), national leader in biscuit industry, offered to place initial order for producing 70
tonnes of biscuit per month with conversion rate of Rs.1.5 per kilo to KCPL. The initial contact was for three years. The APL
would provide technical expertise, inspect the production process and recommend change in the process and equipment,
these changes would be carried out by the KCPL at its own cost. The APL would place post two quality control officer at the
KCPL plants. The APL would also share its APL secret ingredient" but KCPL would be required to buy the material from one of
the authorized suppliers of APL.

Kanpur Confectioneries Private Limited Process

flow chart

Pre Mixing
General:
Ingredients Addition
Sugar solution Milk
solution Preparation of
Flour
Fat
Ammonia
Additives
Flour sifters sugar
grinders
Case Specific:
Materials are checked for
impurities and existence
Packaging
of metals particles
General:
PPM
Metal
detection
Stackers
Feeding chute
Horizontal
flow form
wrap
Printing
Carton Sealing
Case
Specific:

Cooling Time

Mixing
General:
Mixers Mixing
Time Water
Creaming
Dough
consistency
Biscuit grinders
Case specific:
Maida fed

Forming
General:
Laminators Gauge
rolls Sheet
Reduction Cutter
Moulders
Shape and size of
dough
Case specific:
Small mixer

OPE
RAT
ION
S
STR
ATE
GY

Baking ovens
Temperatures
Burners
Steam
extraction
Corporate Mission
Oven
Output
(To be a National leader)

Case specific:
Different phase
of Baking

Business Strategy

OPERATIONS
STRATEGY
MISSION

OBJECTIVES
(COST, QUALITY, FLEXIBILITY,
DELIVERY)
STRATEGIC DECISIONS

DISTINCTIVE COMPETENCE

CONSISTENT PATTERN OF
RESULTS
DECESIONS

PROCESS- maida(manually fed to

mixer), sugar crystals (dissolved in
water and heated), both along with
vanaspathi and preservatives mixed
in diff. ratios

QUALITY-only checked for any

metal particles at the start of
process

CAPACITY- 240 tonne

(120-MKG,50-Pearson,70-unused)

INVENTORY- baked biscuits and

LOW COST
CANDIES
CASUAL LABOR
WAGE RATE
DECISIONS TO BE MADE

EVALUATED IN EXHIBIT-1