K.P Company Limited (SMU-X Overseas Project)

K.P Company Limited (SMU-X Overseas Project)

 

Company Sponsor: KP Company Limited

KP Company Limited (in short KP) was founded in the 1940s in Laos and started off as a distribution company. Over the years, it has expanded its business to cover joint-venture businesses and currently focuses on both areas. To date, there are 16 companies under the umbrella of KP Group. 

For its distribution business, KP has been the official distributor of many world-renowned products ranging from Fast Moving Consumer Good (FMCG) to automotive to agriculture and home improvement services. 

In the area of joint-ventures, KP is always looking out for more suppliers and business partners who see the value in ethical businesses, sustainable partnership and mutual benefits that can enhance the lifestyles of the consumers in Laos and create positive impact in the Lao community.
 

Project: This Project was conducted as a SMU-X Overseas course which allows students the unique experience of working with an overseas client, and eventually travelling to the country where their client is based for global exposure. The KP projects identified delved into the areas of: 

  • Accounting
  • Information Technology
  • Strategy

Project Team: Multiple Project Teams

    Problem

    Students who took this SMU-X Overseas module were grouped and tasked to address projects dealing with the following real world problems which KP faced.

     

    Problem Statement 1 Problem Statement 2 Problem Statement 3
    KP distributes Bridgestone tires and Yamaha motorcycles in Laos, and they use five different key performance indexes (KPIs) to measure performance of these sub-units. KP is keen to explore other KPIs for a better assessment of the businesses’ performance.  While the business units operate independently, their finance operations are managed by a central finance unit, with the entire distribution business being presented as a single entity in the annual filing. To ascertain the market value of the Bridgestone and Yamaha sub-units, another two student teams were tasked to research and develop a range of valuations based on different models. KP is a family-run business, with a large number of family members holding varying stakes in the company. Corporate governance has been a perennial problem for the company. The student team was tasked to research on the jurisdictions of regional countries to aid KP in evaluating the feasibility of setting up a holding company in the region.

     

    Solution

    After working with their faculty mentor and client to develop their recommended solutions, the project teams travelled to Laos where they presented their final recommendations to KP management directly. 

    Solution 1 Solution 2 Solution 3
    Two teams were tasked to develop balanced scorecards and a dashboard for better visualisation of the business performance for the Bridgestone and Yamaha sub-units. The student teams took accounting data provided by KP and developed dynamic balanced scorecards and dashboards for the Bridgestone and Yamaha sub-units. The balanced scorecards created by students provide KP with a variety of performance tracking measures that can be used across sub-units. Dashboards created complement these performance tracking measures by allowing KP to effectively monitor and track business performance. The student teams took accounting data provided by KP and built a variety of valuation models using different modelling techniques. The valuation models proposed by the students provide relevant insights to KP’s continuing discussions on a possible sale or listing of its various businesses by providing a reliable estimate (based on accounting information) of their value. The student team provided insights and recommendations for how KP could set up a holding company. The proposal also included a comparison and evaluation of setting up a holding company in Singapore and Hong Kong. In addition, the recommendations provided by students provided relevant insights to KP’s continuing discussions on a possible restructuring of its business to improve corporate oversight.

     

    “We have learnt immensely from the SMU faculty and students as they presented to us their proposed solutions to the business hindrances that we have been facing. Personally, I am impressed by the level of professionalism, the quality of work and the concerted efforts SMU students have shown. We hope to partner with SMU-X again in the near future.” - Mr Khemsath Philaphandeth, President of KP, Company Limited

     

    The above Capstone project was covered in the following media: