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Silvio Napoli Schindler India Case Analysis
As Luc Bonnard, how would you evaluate Silvio's first seven months as General Manager of Schindler's India operation.
It has been a failure on many fronts. With not a single elevator sold with the exception of the glass-sided unit being installed without Silvio's knowledge when he was out of the country due to the birth of one of his children, the low-end, no-customization strategy is failing fast. The supply chain that was supposed to be entirely functioning within India is not even close to being production-level and the Swatch strategy is not generating any business whatsoever. The biggest failure however is at the cultural level both within India and most importantly, with the production center managers Schindler has running various manufacturing plants throughout Europe and globally. The lack of congruence on cultural dimensions can also have many manifestations, from the failure of a business strategy to the lack of support for challenging business and strategy objectives (Alpander,...
Never before has Schindler abandoned its mass customization and engineer-to-order strategies in favor of no customization whatsoever. The greater the customization in any product strategy the higher the level of profitability (Sharma, LaPlaca, 2005). To enter a new market with no customization or build-to-order capability is to ignore the basic foundations of customer listening and responding to customer needs that any successful business is based on (Holweg, Pil, 2001). For Luc Bonnard it is time to make a change in the Schindler India subsidiary and either bring in a more experienced Indian General Manager who understands both the Indian culture and the specific requirements of Indian elevator sales, or look to create a joint venture to mitigate risk. He cannot continue investing value time with Silvio Napoli hoping things turn around; there are too many systemic problems in the…
References
Alpander, G.G. & Lee, C.R. 1995, "Culture, strategy and teamwork: The keys to organizational change," The Journal of Management Development, vol. 14, no. 8, pp. 4-4.
Gunasekaran, A. & Ngai, E.W.T. 2005, "Build-to-order supply chain management: a literature review and framework for development," Journal of Operations Management, vol. 23, no. 5, pp. 423-451.
Holweg, M. & Pil, F.K. 2001, "Successful Build-To-Order Strategies Start With the Customer," MIT Sloan Management Review, vol. 43, no. 1, pp. 74-83.
Sharma, A. & LaPlaca, P. 2005, "Marketing in the emerging era of build-to-order manufacturing," Industrial Marketing Management, vol. 34, no. 5, pp. 476-486.
Napoli, head of corporate planning for the Swiss Schindler company, has this job of building and promoting elevators in India. He has been told by Schindler, that for him to succeed, it is important that he be "half monk, half warrior" in order to adapt to and attract the Indian people to his work. Napoli describes himself as warrior, and intends to work on his monk part. In the meantime,
Opportunities . Indian elevator market growth is very promising in the 1995 timeframe, which is when this case study takes place. The low-end of the Indian elevator market is experiencing 27% increases in unit shipments, and 17% unit increases overall. . The market itself is highly fragmented for elevators in India. 70% of the demand for elevators is at the low-end of the market; 20% at the middle-end, and 10% at the top-end. . High levels of recurring
If you don't do them well, you can't compete, but doing them better than anyone else provides limited benefit. Companies should carefully examine these tasks for outsourcing opportunities, keeping in mind that they may require the outsourced resources to have specialized or more developed skills. Activities that are necessary, but a commodity level of service is sufficient - Commodity tasks are necessary for keeping a company functioning, but they do
. Lack of tax incentives for infrastructure development including broadband penetration. The key elements of the infrastructure including electricity, telephone and internet service are at time unpredictable in their performance. The biggest weakness of India today is its infrastructure, and with only 30% of the workforce relying on communications links to other nations, India will be forced to spend greater and greater percentages of their GNP on making their infrastructure world class. . Growth of Instant Messaging and
Electricity being out for three weeks nearly forces an elevator sale to nearly be cancelled, no suitable drainage from massive rains floods his family's apartment, and the Indian value of bartering and customizing is diametrically opposed to the strict discipline of a low-end product strategy where no variation in standard products is allowed. Mr. Napoli's experiences culminate in one year elapsing before a single elevator is sold, and that one