Silvio Napoli at Schindler India Case Study

Case 7-3: Silvio Napoli at Schindler India (A) Since eight month (1998) the new organization of the elevator manufacturer Schindler Holdings Ltd. is running in New Delhi. The plan was to sell core, standardized products, with no allowance for customization. To keep costs down and avoid India’s high import tariffs, the plan also proposed that all manufacturing and logistic activities be outsourced to local supplier. Napoli, vice chairman, was confronted with three challenges: First, for the second time on two month, his Indian managers had submitted an order for a no standardized product. At the same time his business plan has come under intense cost pressure, first from a large increase in customs duties on imported elevator components, than from an unanticipated rise in transfer prices for the “low-costs” product lines imported from Schindler’s European factories. Finally, as Napoli began accelerating his strategy of developing local sources for elevator components, he found that his request for parts lists, design specification, and engineering support were not forthcoming from Schindler’s European plants. Schindler’s India Explorations In 1990 the company decided to take a bold step and enter the Indian market through its own wholly owned subsidiary. The Growing Commitment: Alfred Schindler was the leader of the company in 1987 and he sought to transform the company’s culture from that of an engineering-based manufacturing company to on of a customer-oriented service company. Their elevators were widely perceived as the technological leader. In 1995 Alfred Schindler saw huge potential in the Indian market. Before the company entered collaboration with the Mumbai-based Bharat Bijlee Ltd. (BBL) to manufacture, market, and sell its elevators. In 1996 the collaboration ended and Schindler