Case Study Description of Kanpur Confectioneries Private Limited (A)
Mr. Alok Kumar Gupta is required to decide his company's response to a proposal for becoming a sub-contractor to A - One Confectioneries Privte Limited (APL) a large national player in the biscuit industry with aspirations to be a leader in every region. The case describes the details of the proposal, history of KCPL, a biscuit manufacturing company, and the impact of competition on its performance. It also describes the experience of alliance with another company in the industry. It presents the aspirations of the founders in becoming a leading national player in the industry. The advantages to the company are in getting assured return on investment and access to APL's manufacturing expertise. The disadvantages are a possible loss of independence in decision making, dilution of company's own brand, and family prestige.
Swot Analysis of "Kanpur Confectioneries Private Limited (A)" written by Mukund Dixit, Vandana Dixit includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Confectioneries Biscuit facing as an external strategic factors. Some of the topics covered in Kanpur Confectioneries Private Limited (A) case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Kanpur Confectioneries Private Limited (A) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
increasing commodity prices, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Kanpur Confectioneries Private Limited (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kanpur Confectioneries Private Limited (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Confectioneries Biscuit, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Confectioneries Biscuit 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 (A) can be done for the following purposes –
1. Strategic planning using facts provided in Kanpur Confectioneries Private Limited (A) case study
2. Improving business portfolio management of Confectioneries Biscuit
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Confectioneries Biscuit
Strengths Kanpur Confectioneries Private Limited (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Confectioneries Biscuit in Kanpur Confectioneries Private Limited (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Kanpur Confectioneries Private Limited (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Cross disciplinary teams
– Horizontal connected teams at the Confectioneries Biscuit 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.
Organizational Resilience of Confectioneries Biscuit
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Confectioneries Biscuit does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Confectioneries Biscuit in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Confectioneries Biscuit 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Kanpur Confectioneries Private Limited (A) firm has clearly differentiated products in the market place. This has enabled Confectioneries Biscuit to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Confectioneries Biscuit to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Confectioneries Biscuit is present in almost all the verticals within the industry. This has provided firm in Kanpur Confectioneries Private Limited (A) 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.
Effective Research and Development (R&D)
– Confectioneries Biscuit has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Kanpur Confectioneries Private Limited (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Confectioneries Biscuit in the sector have low bargaining power. Kanpur Confectioneries Private Limited (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Confectioneries Biscuit to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Confectioneries Biscuit 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 (A) 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.
High brand equity
– Confectioneries Biscuit has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Confectioneries Biscuit to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Confectioneries Biscuit is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Kanpur Confectioneries Private Limited (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kanpur Confectioneries Private Limited (A) are -
Lack of clear differentiation of Confectioneries Biscuit products
– To increase the profitability and margins on the products, Confectioneries Biscuit needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Kanpur Confectioneries Private Limited (A), it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Confectioneries Biscuit 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 Biscuit 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 cash cycle compare to competitors
Confectioneries Biscuit 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Kanpur Confectioneries Private Limited (A), in the dynamic environment Confectioneries Biscuit has struggled to respond to the nimble upstart competition. Confectioneries Biscuit has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Kanpur Confectioneries Private Limited (A) 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 Biscuit '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 Biscuit supply chain. Even after few cautionary changes mentioned in the HBR case study - Kanpur Confectioneries Private Limited (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Confectioneries Biscuit vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Confectioneries Biscuit has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Kanpur Confectioneries Private Limited (A) should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Confectioneries Biscuit has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, Confectioneries Biscuit has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Confectioneries Biscuit is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kanpur Confectioneries Private Limited (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Kanpur Confectioneries Private Limited (A) | 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 (A) are -
Developing new processes and practices
– Confectioneries Biscuit can develop new processes and procedures in Innovation & Entrepreneurship 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.
Building a culture of innovation
– managers at Confectioneries Biscuit 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 Innovation & Entrepreneurship segment.
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 Biscuit 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.
Using analytics as competitive advantage
– Confectioneries Biscuit 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 (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Confectioneries Biscuit to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Confectioneries Biscuit 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 Biscuit 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Confectioneries Biscuit in the consumer business. Now Confectioneries Biscuit can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Confectioneries Biscuit 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 Biscuit to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Confectioneries Biscuit can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kanpur Confectioneries Private Limited (A) 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.
Better consumer reach
– The expansion of the 5G network will help Confectioneries Biscuit to increase its market reach. Confectioneries Biscuit 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 Biscuit 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.
Loyalty marketing
– Confectioneries Biscuit 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.
Leveraging digital technologies
– Confectioneries Biscuit can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Confectioneries Biscuit 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.
Threats Kanpur Confectioneries Private Limited (A) 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 (A) are -
Increasing wage structure of Confectioneries Biscuit
– 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 Biscuit.
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 Biscuit needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Confectioneries Biscuit 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 (A), Confectioneries Biscuit may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Regulatory challenges
– Confectioneries Biscuit 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 Innovation & Entrepreneurship industry regulations.
Consumer confidence and its impact on Confectioneries Biscuit 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.
Shortening product life cycle
– it is one of the major threat that Confectioneries Biscuit is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Confectioneries Biscuit has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Confectioneries Biscuit needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Confectioneries Biscuit 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 (A) .
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 Biscuit 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Confectioneries Biscuit in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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 Biscuit.
Weighted SWOT Analysis of Kanpur Confectioneries Private Limited (A) 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 (A) 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 (A) 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 (A) 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 (A) 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 Biscuit needs to make to build a sustainable competitive advantage.