Kanpur Confectioneries Private Limited (A)

Abstract

This case describes a situation in which Alok Kumar Gupta, Chairman and Managing Director of Kanpur Confectioneries Private Limited (KCPL), a second-generation family business, has to decide whether to sign a contracting agreement with a larger player in the industry. It provides an opportunity to the participants of a management education program to get into Gupta's shoes, analyze the situation, evaluate the options, make a decision and think through an action plan. There are choices to be made between short-term profits and long-term development of the family brand, being engaged in all the functions of the business and focusing on one function, and dealing with one partner and multiple partners. The deal has its advantages in terms of saving advertising expenses, receiving a steady flow of income and gaining access to new competencies. However, there are risks as well, the most critical of which are loss of independence and dilution of the family brand “MKG”.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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Resources

Exhibit 1: Details of Kanpur Confectioneries' Monthly Operations for “Mkg” Brand in 1986–87

Dimension

MKG

APL

Sale per month (metric ton)*

120

1,200 National (200 North)

Price per ton (INR)

18,100

19,000

Consumption of flour per metric ton (in kgs)

750

700

Consumption of vegetable oil per metric ton (in kgs)

150

140

Consumption of sugar per metric ton (in kgs)

200

190

Price of flour per bag of 50 kgs

500

490

Price of vegetable oil per tin of 15 kgs

520

500

Price of sugar per bag of 100 kgs

1,200

1,150

Preservatives and packaging costs per metric ton

1,000

1,000

Casual labor cost per metric ton (INR)

300

400

Wage rate

50

80

Permanent salary bill per month (INR)

275,000

NA

Interest per month (INR)

10,000

NA

Other fixed commitments

60,000

NA

Note: The data relates to “MKG” biscuit operations. They do not cover the impact of the Pearson contract.

Source: Discussions with company executives and traders.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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