Case Note Marlene Lechner
Silvio Napoli at Schindler India (A)
1. Was Silvio Napoli the right choice to set up a greenfield subsidiary in India for Swiss
elevator company Schindler? What are the pros and cons of hiring Mr. Napoli for this
position?
Pros Cons
Work experience of only 7 years and
Highly qualified (MBA + Engineer)
mainly in European markets
No experience in Asian countries, lack of
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Head of corporate planning at Schindler
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connections
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Napoli was unaccustomed to the Indian
o.
Aware of Schindler’s mission and vision
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Made Schindler’s business plan for India,
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which was approved by VRA
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v i y re
Silvio Napoli was a typical western style manager driving for results and not being aware
of the organizational relationships. Even though he was highly enthusiastic about this
project and put in thorough groundwork when writing the business plan, he did not have
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any real business experience in India and was very dependent on Mr. Singh when it came
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to understanding Indian business dynamics. Having very little knowledge about the way
of doing business and almost no knowledge about Indian culture was a big hindrance in
getting work done in India.
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All in all, I still think that Silvio Napoli was a good choice for Schindler India, but he
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would have been an even better choice if he had received some cultural training before
going to India.
2. As Luc Bonnard, how would you evaluate Silvio Napoli’s first eight months on the job?
Silvio’s performance has both positive and negative attributes. The first eight months of
Silvio’s assignment were good from the perspective of building the organization and
recruitment of competent personnel. The selection of the team was very logical and well
thought out. Another positive attribute was his desire to get buy-in from the
management team for this business model from the start.
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Case Note Marlene Lechner
From a negative standpoint, Silvio should have either done more upfront work prior to
relocating his family to India, because he spent weeks trying to juggle the relocation and
setting up the company infrastructure at the same time.
Moreover, there had not been any success in building the supplier network for the
manufacture of components, which was an essential element of the business plan and
had a huge negative impact on the cost structure. In addition, Silvio needed to become
more accepting of alterations to his business plan. He was so determined to follow the
plan every step of the way that he lost sight of the main goal at certain points: selling
elevators.
3. Identify the top three challenges Silvio Napoli faces at the time of the case and provide a
description of each of these three challenges.
Failure to adapt: Hotels, government buildings and office spaces were booming in the
developing cities of Mumbai and New Delhi. These spaces were looking to purchase
specialized elevators, something Napoli was adamant on not offering. The business
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model was stagnant and focused on surviving by only offering a small product line
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mismatch in product offering between Schindler and customers in India
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Lack of shared vision and method: Early on, Schindler India initially received orders
for custom products (glass pod elevators) that carried higher price tag. M.K accepted
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the order feeling a need to stake a foot for Schindler India. Napoli disagreed and had
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to “remind” M.K of Schindler’s strategy. Demonstrates executives all shared a
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different vision for success.
Increased costs: Before Schindler could establish local manufactures, they continued
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to outsource production from Europe. The Indian government raised the import tax
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of Non-Core goods, elevators in particular experienced a 34% increase Lack of
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sufficient financial planning and forecasting.
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4. Provide detailed recommendations to Silvio Napoli on how to deal with each of these
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challenges and achieve success in India. Provide an implementation timeline for the
courses of action you recommend in the short-term (1-3 years), medium-term (3-5 years)
and long-term (5-10 years).
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Market research: Take a step back and conduct a detailed analysis to understand
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market demands in India. Redefine the product line to match customer preferences
A detailed analysis on customer preferences would give better insight on product
offerings to the Indian market.
Product line adaptations: Allow standardized customization of products analyse
which component of the S001 should be kept standard while providing limited
options to customers. This provides a slight degree of customization for clients, while
keeping most of production standardized.
Cost reduction with economies of scale: Define product line that matches customer
preferences gives Schindler confidence to place bulk orders to suppliers and
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Case Note Marlene Lechner
outsourced companies, hence reducing cost. Outsourcing some components of
production Reduces cost by using supplier’s economies of scale.
Have Napoli take a cultural immersion course: Help him learn how to better manage
his new team and how to overcome and benefit from cultural differences.
Implementation Timeline:
- Short Term (1-3 years):
o Market research should be started instantly.
o Napoli’s plan should resume until the market research is finished This will
keep the business running while they look to make changes.
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o Seek help from the European managers to solve communication issues with
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European plants.
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- Medium Term (3-5 years):
o.
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o Complete market research
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o Analyze research to understand what Indian consumers want
o Adapt product line to match what the research found
- Long Term (5-10 years):
o
o Finalize adaptation of product line
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o Market new possibilities to customers
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o Establish manufacturing capabilities to produce parts that cannot be
outsourced
o Manufacture and assemble S300P elevator wholly or partly in India
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