Silvio Napoli

Based on a focused analysis devise an action plan for Silvio Napoli to resolve the challenges he faces in setting up Schindler’s Indian subsidiary.

Background

The case focuses on a young Italian Silvio Napoli with an MBA from the US working for a Swiss multinational Schindler an elevator manufacture. Silvio is sent to India to establish a subsidiary and implement the strategy he prepared at Headquarters as a strategic planner reporting directly to the CEO. The case outlines many of the challenges both personal & business that Silvio faces in the first eight months in his new job.

Before creating an action plan we must first understand the challenges that Silvio is facing. These can be grouped as follows, delivering the business plan, Indian team dynamics, relationship with the European team and the companies’ expectations

Challenges

Delivering the business plan

The objective is first year sales of 50 units, win a 20% share in the target segments (low rise segment & mid market segment & highly profitable service business), Two key elements to the plan selling “core, standardized products” with no allowance for customization and all manufacturing and logistics to be outsourced to local suppliers (to keep costs down because of high import tariffs) – 75% of sales to be outsourced (no in-house manufacturing, no centralized assembly and no logistics infrastructure).

Since the plan was put together there has been a large increase in customs duties on imported elevator components (rates increased from 22% to 56%) and unanticipated rise in transfer prices (+30%) for the “low-cost” components and materials imported from Schindlers European factories.

These changes had a substantial impact on the planned break-even objectives and as at the end of 8 months Schindler India has not installed one lift.

India Team Dynamics

When Napoli accepted the position he realized that “to survive in India you have to be half monk and half warrior” and Mr Bonnard Vice...