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:

04/29/2013
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 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.

04/29/2013
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 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

04/29/2013
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:
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.

04/29/2013
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.