Presented By: Group 6

• Minna Gupta (H19146)

• Prabhakar Tripathi (H19150)
• Rahul Dube (H19154)
• Sarvesh Sharma (H19162)
• Shivam Chandra (H19165)
• Shivani Chougule (H19166)
• Vaibhav Bhandari (H19179)
• Yashica Garg (H19182)
Silvio Napoli at Schindler
India
Schindler evolved from distribution agreement to technical collaboration to deciding to establish
its own operations in India in a span of 38 years
 Engaged BCG to look
for alternative
partners
 Shortlisted 8 out of 34
partners
 Legally feasible to start
100% wholly owned
subsidiary
1998
 No significant market presence
1995-96  Napoli arrived to
establish Schindler
1985  #2 player in Indian
business in India
market
1958  Agreement with  10%-15% market
ECE terminated share
1925  Entered into a long  Technical  Alfred Schindler
 First elevator installed term distribution collaboration proposed BBL a new
by Schindler in India agreement with ECE with Mumbai JV
based Bharat  Negotiations
Bijliee collapsed
 12% equity
stake

Napoli was responsible for the elevator and escalator division in India and nearby export markets
 Political Factors Economic Factors
• • Indian economy was growing at a faster rate

P E
Increase in import duties
from 22% to 56% (6.2% GDP growth)
• Increase in transfer pricing • Tourism & Hotel industry was expanding

Social Factors Technological Factors

• Rapid Urbanization taking place
• Cities were taking shape of metros
• Traditional building becoming more
sophisticated and professionalized
S T • Technological advancement in
elevators with advent of two-
speed (20%), variable speed
(13%), and hydraulic (2%)
elevators
• Customers looking for better
Legal Factors

L
services and facilities
• Govt banned low tech manual • Small but growing demand for
elevators. top quality, high rise office
facilities

www.presentationgo.com
 Major challenges

Strategy to implementation gap Factors influencing elevator purchase-

• Increased transfer cost added to the existing dearth of approved local unprompted listing- builders
suppliers Feat...
• Poorly communicated strategy leading to acceptance of non-standardized
Exp. With su...
elevator orders
Sa
Deli...
Fierce Competition Brand I...
• 75% of the market is already captured by 4 major competitors Techno...
• Major competitors have already developed a niche market
Reliabi...
• Otis, Kone, BB and Johnson top the list of unprompted recall of brands
P
Ser

Environmental & Business challenges

• Intensive focus on product strategy led to lack of clarity regarding
customer segment Comparative rating of Elevator Markets- Builders
• Forecasting errors resulting from changing market regulations (30%
increase in parts due to high import duties) Customer ser...
Johnson
Kone
Financial t...
BBL
Cultural Differences Otis
Value for m...
• Differences in the work attitude of Indian management staff v/s that of
Napoli Brand i...

Source: Case facts 4

Evaluation of Napoli as a manager
Strengths Weaknesses
• Prior experience in Schindler Europe
• Lack of experience in Asian market
• Successful execution of the Swatch project
• Impulsive and rigid with respect to project
• Recruitment of balanced and experienced
deadlines
top management team for Indian operations
• No revision of business plan as per the latest
which complemented his inexperience in the
trends due to absence of feedback system
market
• Unrealistic target setting for the first year (50
• Had clarity regarding the strategy that would
elevators)
work in Indian market
• Did not leverage the learnings and
• Design the organization (flat & agile) as per
experience of the top management
the dynamic market conditions of India

Advice for Napoli

• Decentralization of authority: Give more decision making power to M.K. Singh and other top
management as they have more knowledge about the Indian market
• Build on the learnings of sales people over the past 7 months on customer preferences, location for
service centre and choice of suppliers
• Training for sales people so that they can identify the right customer segment
• Urge Napoli to seek support from headquarters as and when required and not wait till the last
moment
5
 The Diagonal Venetian
Blinds Problem
The revision of ROI
targets by the
organization based on
the diminished
performance in the
years following inception
of the project

- Silvio couldn't have anticipated such an unpredictable environmental change

- There should have been a contingency plan for such factors that could drive up the price of the product
- Expedite the Integration process to reduce the dependency on imports by sourcing locally
- By bringing in production under your roof, you can avoid the delays due to poor coordination with the
European plants

- The unavoidable costs must be accounted for in the revised forecasts for the Indian subsidiary by Napoli
- Sales target might be unrealistic given the scenario and must be relaxed till the operations are set up properly
6
 Standardization Customization Vertical
Parameters Outsourcing
Integration
Achieved by Blocking the Achieved by accepting the
customized order customized order More No. of
Pros: Pros: Less More
firms (adjacent
• Strategic precedence to • Increase bottom line stage) advantageous advantageous
drive the future course of • Increase customer base
action • Promote innovation Higher Less
• More
Increased
Achievedclarity
by of roles the customized
Blocking through continuous
order Information advantageous
advantageous
and expectation driving product modification asymmetry
business growth
Cons: Cons: Demand More Less
• Reduce bottom line • No strategic coherence advantageous
certainty advantageous
• Limited market segment • No clarity of roles,
• High training costs responsibilities and
customer segment Low Risk in the More Less
adjacent stage advantageous advantageous

Types of Vertical Integration Recommendation

• Full Vertical Integration : obtaining all assets, cost intensive, reduces flexibility
Standardization with Quasi-
• Quasi Vertical Integration : obtaining some stake, agency benefits, high flexibility,
vertical integration, long term
low cost of exit
periodic review for strategy-
• Long Term Contracts: elements of procurement held constant, reduced flexibility,
business goal alignment
high supervision
• Spot Contracts/Arms Length contracting: immediate supply, less inclination with
firm’s requirement
THANK YOU !