Case
Teaching Notes
Supplementary Resources
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.
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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