SILVIO NAPOLI AT SCHINDLER INDIA (A)

Schindler was established in 1874 in Switzerland by Robert Schindler. In 1889, the elevators has been started to manufacture by company. Then, Alfred N. Schindler, fourth generation the family, transformed the firm from manufacturing Company to customer-oriented service company. Schindler is the leader in supplying escalators and second largest Swiss based company which supplies elevator. CEO, Alfred Schindler decided to enter the India market since it is a growing market. Therefore, Silvio Napoli, who is a graduate of Harvard MBA and head of the corporate planning of the company, charged for developing a strategic plan in India. Since 1996, Schindler has not direct operations in India except distribution agreement with ECE. After terminating it, they had a technical collaboration with Bharat Bijlee LTD. (BBL).Then, the negotiations between BBL and Schindler resulted badly and that agreement was terminated as well. Afterwards, in order to understand the India market, they agreed with Boston Consulting Group. They narrowed 34 potential partners to 8 and it was understood that the candidates were not appropriate for the partnership. Thus, decisions changed to start a wholly owned company in India. Silvio Napoli was a young man with a family. These properties made Alfred Schindler’s mind to choose Napoli as a GM for Indian company. He thought that only a young person can adapt himself to a different culture and he relies on him for making strategic plans. I think, he is a well-educated man with an orderly family life. As he is younger than the others, I agree that he can adapt easily but he is lack of experience in some aspects. Since his colleagues mentioned he is impatient, hard driving and very communicative and these properties are not acceptable in Indian culture.
Napoli, first built a management team in India. Some of them were from the elevator industry and some of them were not. Thus, Napoli arranged some meetings for explaining them the history and activities of Schindler and also touched upon elevator industry a little bit. As their relations developed, the team started to understand that Napoli is different from Indians. He is so aggressive but it is important to be both aggressive and patient. As one of his colleagues mentioned ³He wants everything done yesterday. And in India, things don’t get done yesterday.´ Also, he defined the strategy as entering market with standardized products and outsourcing the key manufacturing parts and logistics functions in order to lower the costs. He set a goal which was selling 50 units for the first year and then winning 20% of market share in 5 years. However, his plans did not work as he wanted and they could not sell even a unit in 8 months. As we consider these circumstances, Napoli’s performance for seven months was not so well but it is hard to adapt to a new environment and also he faced with some difficulties about his family and Schindler’s company culture was really different than Indian companies. Thus, I guess with taking right actions he will be successful in the future. Things will go right when he settles down properly and will start to understand Indian culture better. Silvio Napoli has challenged with some problems in that seven months. First, he was going to planning to sell standard products in India but the demand for customized elevators were much more than the standard ones. Another problem was about costs. The actual cost of transporting was 30% higher than the expected cost. Lastly, the Indian government increased the rates of import duties. The first challenge can be solved by producing customized products to meet the demands of customers. As it is cited, there will be service challenges but improving services will be a better solution than not producing customized products. Since most of the customers demanded glass wall elevator, Schindler should respond to that. I believe that Napoli should be happy instead of worrying about his strategy because his plans overwhelmed by the problems they faced so it is time to make some changes.
As a recommendation for the second challenge which was the increased transportation cost and limited technical cooperation from European plants, the company should acquire an existing manufacturer and distributor. It will make them earn more profit since they will have a strong local knowledge and also an established service base. Also, they will have the opportunity to improve technical equipment as they have an established plant. They should develop their sales and marketing forces. This will yield to increase revenue and they can reach their goals to win 20% market share within five years by using local knowledge. Since, Napoli could not adopt their culture very well, and then he should cooperate with a cognizant. In conclusion, as I mentioned above Napoli changed both his plan and his mind. He is too aggressive for Indian culture. He has to be sure about where he is and adapts the environmental issues. In order to be successful in a country, the most important thing is to understand the culture and traditions of that country. He started with a too certain plan but it should be more flexible since Indians are not so disciplined as Swiss people. Thus, buying an existing company will make them act according to local knowledge. Since, Indian people are eligible to produce these kinds of electronic equipment; they can manufacture parts locally instead of importing them from Europe. Consequently, they will burst from the import rates of government regulations and both transportation costs. Reduction of costs will increase revenue so Napoli will reach one of his goals. Also, they have to customize their products partially according to the demand. Since they are custom-oriented company, they should meet the demands of their customers and they have to provide qualified service. They can customize their basic products up to a point and have the win to win situation. Customers will have what they want and Schindler will build a reputation and brand awareness in India. As to conclude I believe that the strategy of Napoli should be revised and the rights actions such as my recommendation can be applied to complete their goals.