From reading about Germany during the industrial revolution and world wars, it appears that the Krupp family and company was given various​ privelieges and influence by the government, even leading to them being the main producer of German tanks on world war 2. What led to this?
It started with ship armor that the Krupp family made it's name for steel manufacturing.
There are multitudes to steel manufacturing that I won't go into that are prevalent here as it would be way too off-topic. Regardless, steel manufacturing is a complicated science when you get to levels of steel that would protect the vital areas (magazine mainly) of a battleship.
The Harvey process starts us off. Steel that is homogenous is of equal composition throughout. In that, there is a hardness factor that will determine how much it is brittle and how flexible it is under stress. Armor plating on ships used to be a singular or multiple sheets of homogenous steel that was backed by teak to give it some shock absorption.
A process that allows a sheet of steel to be hardened on the outside but soft and flexible on the inside is something called "case-hardening". This replaced the steel-wood (usually teak) method as it was lighter and stronger overall.
The Harvey process "cemented" the armor or, more straight forward, produced a sheet of homogenous steel and then covered it with charcoal for an extended period. The charcoal would imbue the steel with carbon, creating a hard but brittle outer shell. Different nations used different compositions for the steel using different amounts of manganese, nickel and carbon levels.
Enter Krupp. Krupp studied the Harvey process and changed things. Krupp steel was made by adding chromium to the nickel-steel of Harvey's method. Additionally, instead of burning charcoal to imbue carbon into the steel, Krupp refined a process of applying carbon-bearing gasses to the hardened front. This was more efficient and quicker. The steel was then annealed (heated and cooled) with the face-hardened side being quenched (cooled rapidly, usually with an oil) while the interior was left unquenched.
This created the most effective armor plating in the world at the time. It was strong, flexible and light for it's protective properties. This was the in-road into Krupp's dominance of iron/steel manufacturing for the German military.
NOTE: Before this, Krupp was already renowned as a top iron/steel maker in the world alongside Bethlehem, Vickers, Carnegie and others. It was specifically the Krupp process for making steel that gave them the advantage for the German government and military. It also helped the Krupps that they were a wealthy family with definite connections to German royalty long before the Industrial Age began.