Silvio Napoli at Schindler India (A)

Group-8
Aparna Johari | Kruti Maru | Sindhuja A
Sreekutty Sreekumar | Vipin Kumar
 Schindler
Alfred N Schindler fourth generation leader of company

Company Culture - Engineering-based manufacturing company to Customer Service

Oriented

38000 employees in 97 subsidiaries

1998
Schindler Timeline 1985-1996
• $4 billion
revenue
• Collaboration
1925 with BBL
• Installed first
1987 elevator in
• Alfred N India
1889 Schindler joins
• Elevator the company
1874 manufacturing
• Established by
Robert
Schindler
 HR @ Schindler India
Silvio Napoli Mehar Karan

• Harvard Business School MBA graduate • Recruited for managing director

• Joined Schindler in 1994 • Lead projects in construction sector
• Head of corporate planning in Switzerland • Work experience of customers’ side(Hotel
• Coordinated annual strategic review Industry)
process • Valuable experience and different
• Undertook external benchmarking and perspective
competitor analysis • Sensitive to organizational power and
• Lead Swatch Project for standardized relationships
elevator
 Schindler India Formation
• Consulting with BCG to search for local partners in India
• Analyzed market size, legal environment and competitive situation
• VRA decided for 100% wholly owned company in India
• Project approved in October 1995 by VRA
• Napoli(VP South Asia) responsible for India operations
• Offices in New Delhi and Mumbai
• Faced different Culture and different challenges
• Issues in employee switch over and interview for the first employees

Indian Elevator Market

 Installed base of 40000 elevators with 5600 units in a year
 Total Revenue $125 million
 New Delhi and Mumbai records 60% Indian Elevator Market
 50% demand for low-tech manual elevators
 Indian Business Plan
• Selling a focused line of standard products
Core • Outsourcing key manufacturing and logistics functions
Goals

Market Distribution
Growth Opportunities
• More opportunity after ban by ISI in low end market 80
70
segment 70
• 60
Rapid Urbanization
50
• Low- and mid-rise buildings
40
• Growth of MNCs and tourism leads to top-line buyers
30
• Market CAGR is 17% in units and 27% in value in first half of 20
20
decade 10 4 6
• 8-12% expected growth rate 0
Residential Commercial Hotel Other
 Competition and Strategy
Competition Major Competitors
• Entry of globally established players like 60 50
50
Mitsubishi and Hyundai(1% of sales) 40
• 25% regional player cater 23% local market 30
• Otis as one of the most profitable 20
8.6 8.8 8.4 Market Value
10
company 0
• Highly price sensitive and service oriented Oti
s
BB
L
on
e
EC
E
s K
market nd
'
la
Fin

Strategy - Narrow product line of simple, standardized elevators

• Product: :
• Schindler001 (S001) – Low-rise segment as a primary target
• Schindler 300P(S300P) – Mid-rise segment
• Tapping 20% market share in 5 years
• Differentiated sales and service
• Importing or outsourcing of production of components to local suppliers
• Logistics by internationally reputed logistics service provider
 Q1
Was Silvio the right choice for Schindler's India
Operations?
 Expatriate Selection
PARAMETERS FOR SELECTION NAPOLI’S FIT

• High self-esteem
Self-Orientation • Self-Confident

• Effectiveness in interaction with host-

Others Orientation country nationals

• Ability to empathize and flexible

Perceptual Ability management practices

• Adaptation to cultural differences

Cultural Toughness between home-country and host-
country

Good
• Silvio Napoli was an individualistic person with a goal-oriented attitude.
• However, he was not effective in communicating his thoughts/values in India Average
• Cultural Training is a mandatory process for smooth transitioning across cultures
Bad
 Silvio Napoli – Right Choice?

to new ways a r r io r th a n a m o nk
pe n aw
• Young a
n d o • More of r and inflex
ible
k m a s te c al scenario
• Generali
st
N a p oli and spouse • H ard Ta s
ledge of In
dia n p o li ti
ess to Go –
k f k n o w aster, Over-
• Willingn In d ia n C onsultants • La c o
ive, Impuls
iv e , Ta sk m
with • Aggress
• Worked in V RA Committ
ee
ica ti ve u n d – this may no
t
R o le com m u n m e -b o
• Visible m ultip le cultures is cip li n arian and ti
to • Toug h D
• Exposure e and courageous for India ce
• Strong-m
ind d n be suitable al Experien
d ia B usiness Pla ate In te r n ati o n
• Worked in
In • Inadequ
isits
• Indian v
ctions
• Timely a

CONCLUSION
• Silvio Napoli’s shortcomings are controllable and amenable
• Positives outweigh negatives : Brighter chances for success

Silvio Napoli is the right choice for Schindler’s expansion into India
 Q2
As Luc Bonnard how would you evaluate Silvio's first
seven months in-charge of the Indian Subsidiary?
What advice would you offer?
 Evaluation of Silvio’s 1st 7 months
Parameters Analysis

Speed of • Established marketing & service office in New Delhi

establishment • Had to shuttle between Delhi and Mumbai
• Got managers of different yet relevant expertise
• Common motivation to see project succeed
Recruitment &
Team building • Undercover sessions to educate the new team and build
consensus
• Lean, efficient organization
• Innovative approach to selling the standard line through
differentiated sales and service
Decision making • Account management concept to give customer a single
hassle-free point of contact
• Radical sourcing concept for Standardized elevators
• Employees took orders for customized elevators
Plan • Unable to get help from European plants
implementation
• Couldn’t sell a single elevator
 Advice to Silvio
Bimonthly updating
the headquarters
about Indian
Operations

Focus on Leverage on
maintenance Schindler’s
contracts in the competitive
short term advantage

Utilize local market

knowledge of other
managers
 Q3
What advice would you give to Silvio regarding his
decision on the non-standard glass wall elevator that
has been ordered?
Advice on non standard glass elevator
DECISION : To go ahead with the project and to customize it according to the
requirement for this order only

REASONS AND FUTURE STEPS

• The project was committed and it is • Also, they have targeted the low rise
too late to stop it segment who would not need much
• It would affect the reputation of customization
Schindler, particularly being a startup • Silvio Napoli should communicate this
• In the short term, Schindler should strategy clearly to his team and also
focus on standardization which is its take them into confidence
Competitive Advantage and not • Detailed discussions with the
commit to such projects managing director and other top
• Due to high costs and local sources officials has to be done to decide on
not yet being identified, the immediate steps to be taken
customization would be expensive • They should focus on getting
maintenance contracts in the short
term
 Q4
How should he deal with challenges he is facing over
transfer prices and limited technical cooperation from
the European plants?
 Dealing with challenges over transfer prices
• Transfer pricing should be taken care of by the headquarters till the time
the Indian subsidiary breaks even
• Escalate the matter to Bonnard and other executives at Head Office
• Decision to be made whether to procure from Europe plant or local
assistance on basis of cost advantage
• Quickly start developing the infrastructure for local procurement

Dealing with limited technical co-operation from the European plants

• Involve Ronnie Dante in getting the designs and specifications from

the European plant which can then be given to the local suppliers
• Set up co ordination mechanisms between the subsidiaries for better
co-operation
Thank You!