04/29/2013 Case Analysis: Silvio Napoli Issue Identification: After Schindlers failed attempt to launch an alliance in India, they

opted to create their own subsidiary and place Silvio Napoli as head of the Indian operations. Schindler, based in Switzerland, produces elevators and escalators. The case discusses the struggles and issues Napoli faces through his endeavor of establishing operations in a new country. The central issues faced by Napoli are: Should he seek help, propose a revived plan, or try to sort out the challenges himself? The three major challenges facing Silvio Napoli have a common theme of adapting to a new environment. The first issue discovered was that Napoli is attempting to push two standardized products in a market that is inclined to customization. As indicated in the case, there are clear examples of how the Indian elevator market prefers customized elevators. Of which, the very first orders received by Schindler in India where for slightly customized products. The second issue was that he placed an importance on cost reduction and product standardization rather than product customization. His justification for this was that by targeting the low and middle end markets, he would be able to push standardized products and cut costs. The use of standardized products means that operations and manufacturing could stay lean. In effect it would also allow the service and maintenance aspect of the business to run efficient. However the customers did not respond well to this approach. Lastly, there was lack of congruency and cohesiveness in the operations. The case depicted inter-company collaboration as sparse, with the Indian subsidiary given little to no support. Analytical Approach: Through the case, it is clear that Silvio Napoli is having a difficult time adjusting himself to the new environment. His lack of adjustment can be assessed from aspects of culture, managerial, and operational. The cultural difference between Europe, where Napoli spent most of his time, and India can be disparate. India has an amenable and non-confrontational culture; whereas Europe is more direct

04/29/2013 and structured. Napolis managerial techniques have suited him well for his work in Europe. However given the disparity in cultures, he may have a more difficult time resonating his style and techniques in India. This is seen in how Napoli creates an extensive business plan that factors in all aspects of price, supply, and operation, then expects that every portion of the plan is adhered to. This is unrealistic given the nature of Indias business environment. All of which require Napoli to take a non-structured and amenable approach to management. Napoli is an ambitious strategic planning manager from Europe. As such, he is characterized as head strong, stern, and inflexible to new ideas. In his previous assignments in Switzerland, he worked closely with top management on several key projects. One of which was the swatch project where he strategized and developed a new way of delivering a low-cost standardized product into the market. In that particular environment, Napolis qualities actually allowed him to be very successful. However in the Indian market those qualities do not translate over very well. There is also the Indian aspect of time. In Europe time is seen as limited, and timelines are strictly adhered to; whereas in India time is considered malleable and amenable. As depicted in the case, it is stated that you cant set your watch by the Indian trains. This is the indirect assumption we must take into consideration when analyzing Napolis performance. It is likely that the culture view of time is one of the culprits behind Schindlers lengthy start-up in India. In clear evidence, we can also see how Napolis business plan is flawed to work in India as well. His business plan calls for the sale of two standardized products in the mid-rise and low-rise elevator segments of the business. The products themselves were initially set to be inflexible in customization and sold as a finished product to the customers. However as the first two sales came in, eight months after the initial business start-up, it was evident that the customers in India do not prefer standardized products, but rather slightly modified ones. His business plan was created with a European business

04/29/2013 mindset, and thus failed to capture the differences they would encounter going into other markets, such as India. Another aspect of his business plan that failed to capture the contingency was that he assumed aspects of the inter-company and inter-country business operations would stay static. Napoli made many assumptions in regards to costs, tariffs, supplies, etc. As such, when those variables changed, he couldnt adjust his operations to handle the discrepancies. There is a lot more planning Napoli needs to consider, and has to adjust to the different environments. Alternatives: As an alternative, Napoli has to address the three impeding issues of product customization, cost control, and operations planning. All of which can be attributed to Napolis business plan. He should make the necessary adjustments to the plan and make it malleable to the Indian environment. The first of which should be to allow for custom product orders. Indian customers have already shown interest in customized products, so there has to be a degree of flexibility when selling the products to make them more marketable in India. Secondly, it is clear that cost control and lack of consistent cooperation with Schindler globally is impeding the supply chain. To address this, they should move quickly to set-up a new Indian supply chain, with Napoli using his political power within the company to obtain the necessary resources to outsource the production locally. Finally, Napoli needs to adjust how hes approaching managing the operations of the Indian subsidiary. His stern European approach is not resonating well with the Indian culture, he needs to adjust it. The other alternative given the circumstance is to replace Napoli in India with a new manger that has more experience dealing with the Asian culture. Napoli is clearly having a hard time adjusting. There are high potentials in this market, it just needs to be approached and managed correctly. Recommendations:

04/29/2013 My recommendation is for Napoli to take the first alternative and thoroughly discuss adapting his business plan with Bonnard and higher management from Schindler. Although there are some negative setbacks in India, there is also plenty of positive progress. For example the building of a solid Indian management team, the initial sale and interest in products, as well as the establishment of operations that could serve as a regional hub for sales and distribution. What Napoli needs to do, is accept the failure of not planning for contingency, and be upfront with Bonnard with what type of support is needed to bring the Indian subsidiary to full operation. For example, asking to gain more consistent communication and cooperation from the global teams. He also needs to realize that his work on the swatch project cannot be directly replicated in the Indian market. The different environments impede pushing a single standardized product into this market. Overall, Napoli needs to be flexible in his implementation of the business plan, as well as know that he must be amenable to the differences in culture. Anticipated Implementation challenges: Given how Napoli was depicted in the case, I can clearly see how he would be headstrong and not admit fault on his lack of contingency planning. He also does not strike me as the type who would be flexible to changes. It is clear that his current plan is not working and needs to be adjusted. With Bonnards visit, it is the most opportune time to address these issues, and gain some type of support from corporate. In regards to gaining consistent support from headquarters, there may be a fear of providing too many resources to the subsidiary. Given that the operations are in a different county with sparse IP protection laws, there exists a possibility of counterfeiting. However, there should be a level trust that Napoli will manage that risk and ensure a tightly secured supply chain. Overall Napoli needs to adjust his management and communication style to adapt to the new Indian environment.