Case Study Description of Kanpur Confectioneries Private Limited (B)
Supplement to case A00014. This case describes the experience of Kanpur Confectioneries Private Limited (KCPL), a family managed company, in being a contract manufacturer for A-One Confectioneries Private Limited. The alliance had worked to the advantage of KCPL. It had prospered as a profitable contract manufacturer. It had used the surplus to diversify into unrelated businesses. The family members, however had doubts regarding the employment opportunities provided by the move. They were not sure whether the progress was sustainable. Alok Kumar Gupta, Chairman and Managing Director of KCPL, along with his brothers and son, is required to review the strategy and performance of his company and develop a course of action for the future.
Swot Analysis of "Kanpur Confectioneries Private Limited (B)" written by Mukund Dixit, Vandana Dixit includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Confectioneries Kcpl facing as an external strategic factors. Some of the topics covered in Kanpur Confectioneries Private Limited (B) case study are - Strategic Management Strategies, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Kanpur Confectioneries Private Limited (B) casestudy better are - – there is backlash against globalization, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, etc
Introduction to SWOT Analysis of Kanpur Confectioneries Private Limited (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kanpur Confectioneries Private Limited (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Confectioneries Kcpl, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Confectioneries Kcpl operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Kanpur Confectioneries Private Limited (B) can be done for the following purposes –
1. Strategic planning using facts provided in Kanpur Confectioneries Private Limited (B) case study
2. Improving business portfolio management of Confectioneries Kcpl
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Confectioneries Kcpl
Strengths Kanpur Confectioneries Private Limited (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Confectioneries Kcpl in Kanpur Confectioneries Private Limited (B) Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Kanpur Confectioneries Private Limited (B) firm has clearly differentiated products in the market place. This has enabled Confectioneries Kcpl to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Confectioneries Kcpl to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Confectioneries Kcpl are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Confectioneries Kcpl is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Confectioneries Kcpl in the sector have low bargaining power. Kanpur Confectioneries Private Limited (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Confectioneries Kcpl to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Confectioneries Kcpl is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Confectioneries Kcpl is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kanpur Confectioneries Private Limited (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Confectioneries Kcpl is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Confectioneries Kcpl in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Confectioneries Kcpl is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Mukund Dixit, Vandana Dixit can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Confectioneries Kcpl has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kanpur Confectioneries Private Limited (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Confectioneries Kcpl has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Confectioneries Kcpl has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Confectioneries Kcpl has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Kanpur Confectioneries Private Limited (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Confectioneries Kcpl is present in almost all the verticals within the industry. This has provided firm in Kanpur Confectioneries Private Limited (B) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Confectioneries Kcpl has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Confectioneries Kcpl to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Kanpur Confectioneries Private Limited (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kanpur Confectioneries Private Limited (B) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Kanpur Confectioneries Private Limited (B), it seems that the employees of Confectioneries Kcpl don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners
– Because of the regulatory requirements, Mukund Dixit, Vandana Dixit suggests that, Confectioneries Kcpl is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Confectioneries Kcpl products
– To increase the profitability and margins on the products, Confectioneries Kcpl needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Confectioneries Kcpl is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kanpur Confectioneries Private Limited (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Kanpur Confectioneries Private Limited (B), in the dynamic environment Confectioneries Kcpl has struggled to respond to the nimble upstart competition. Confectioneries Kcpl has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Confectioneries Kcpl has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Confectioneries Kcpl has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Confectioneries Kcpl even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Confectioneries Kcpl supply chain. Even after few cautionary changes mentioned in the HBR case study - Kanpur Confectioneries Private Limited (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Confectioneries Kcpl vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kanpur Confectioneries Private Limited (B) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Confectioneries Kcpl has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kanpur Confectioneries Private Limited (B), is just above the industry average. Confectioneries Kcpl needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Confectioneries Kcpl has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Kanpur Confectioneries Private Limited (B) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Kanpur Confectioneries Private Limited (B) are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Confectioneries Kcpl to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Loyalty marketing
– Confectioneries Kcpl has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Confectioneries Kcpl can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Confectioneries Kcpl has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Kanpur Confectioneries Private Limited (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Confectioneries Kcpl to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Confectioneries Kcpl can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Confectioneries Kcpl can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Confectioneries Kcpl can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Confectioneries Kcpl can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Confectioneries Kcpl can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Confectioneries Kcpl can use these opportunities to build new business models that can help the communities that Confectioneries Kcpl operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Confectioneries Kcpl to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Confectioneries Kcpl to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Confectioneries Kcpl to increase its market reach. Confectioneries Kcpl will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for Confectioneries Kcpl to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Confectioneries Kcpl can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats Kanpur Confectioneries Private Limited (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kanpur Confectioneries Private Limited (B) are -
Regulatory challenges
– Confectioneries Kcpl needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Environmental challenges
– Confectioneries Kcpl needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Confectioneries Kcpl can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Confectioneries Kcpl can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Kanpur Confectioneries Private Limited (B) .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Confectioneries Kcpl in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Confectioneries Kcpl with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Confectioneries Kcpl business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Confectioneries Kcpl can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High dependence on third party suppliers
– Confectioneries Kcpl high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Confectioneries Kcpl can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Confectioneries Kcpl is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Confectioneries Kcpl will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Confectioneries Kcpl needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Kanpur Confectioneries Private Limited (B) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Kanpur Confectioneries Private Limited (B) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Kanpur Confectioneries Private Limited (B) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Kanpur Confectioneries Private Limited (B) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Kanpur Confectioneries Private Limited (B) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Confectioneries Kcpl needs to make to build a sustainable competitive advantage.