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 - – technology disruption, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, wage bills are increasing, there is backlash against globalization, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies,
talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, 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 -
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.
High switching costs
– The high switching costs that Confectioneries Kcpl has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
Superior customer experience
– The customer experience strategy of Confectioneries Kcpl in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Confectioneries Kcpl is one of the leading recruiters in the industry. Managers in the Kanpur Confectioneries Private Limited (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Confectioneries Kcpl digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Confectioneries Kcpl has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
Organizational Resilience of Confectioneries Kcpl
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Confectioneries Kcpl does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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 -
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.
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.
Slow to strategic competitive environment developments
– As Kanpur Confectioneries Private Limited (B) HBR case study mentions - Confectioneries Kcpl takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Kanpur Confectioneries Private Limited (B) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Confectioneries Kcpl 's lucrative customers.
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.
Low market penetration in new markets
– Outside its home market of Confectioneries Kcpl, firm in the HBR case study Kanpur Confectioneries Private Limited (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Confectioneries Kcpl needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
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 -
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Confectioneries Kcpl is facing challenges because of the dominance of functional experts in the organization. Kanpur Confectioneries Private Limited (B) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Confectioneries Kcpl can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kanpur Confectioneries Private Limited (B) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at Confectioneries Kcpl can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Confectioneries Kcpl can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Kanpur Confectioneries Private Limited (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Confectioneries Kcpl in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
Creating value in data economy
– The success of analytics program of Confectioneries Kcpl has opened avenues for new revenue streams for the organization in the industry. This can help Confectioneries Kcpl to build a more holistic ecosystem as suggested in the Kanpur Confectioneries Private Limited (B) case study. Confectioneries Kcpl can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
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.
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.
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.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Confectioneries Kcpl
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Confectioneries Kcpl.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kanpur Confectioneries Private Limited (B), Confectioneries Kcpl may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Consumer confidence and its impact on Confectioneries Kcpl demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Confectioneries Kcpl in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Confectioneries Kcpl.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Confectioneries Kcpl has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Confectioneries Kcpl needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.