In my opinion, I do not think that was the right choice. Even though India’s growth potential was significant, there are several reasons why I think so. First of all, Exchange rates and unforeseen duties further frustrated market development efforts. When it comes to international business those risks always would be cause of challenge.
For example Japanese lumber company in Canada decreased their sales from last year because of change of currency rate of Japanese yen and Canada dollar. Making the transferred sub-assemblies even more expensive was the fact that there were exchange rate fluctuations favoring Indian currencies. Second, Schindler’s manufacturing cost structures were compatible with customization, not commoditization. According to “ Exhibit 6”, Indian people focus on price or service, not safety or technology.
One of the biggest challenges he faced as getting transfer costs for elevators to a price point internally where building elevators made sense. The case study details the very slow ramp for sales. Was Silvio the right choice to head the India operation?
The Term Paper on Exchange Rate Countries Currency System
... account), and the individual macroeconomic factors like inflation, interest rates, income, expectation, etc. In general there are 5 arguments ... from the basic definition of this type of the exchange rate mechanism - the automatically balanced balance of payments and " ... investments. This again endangered the stability of the exchange rate stability. Poland has again been confronted with the dilemma, ...
In my opinion, I do not think that was the right choice. Even though India’s growth potential was significant, there are several reasons why I think so. First of all, Exchange rates and unforeseen duties further frustrated market development efforts. When it comes to international business those risks always would be cause of challenge. For example Japanese lumber company in Canada decreased their sales from last year because of change of currency rate of Japanese yen and Canada dollar.
Making the transferred sub-assemblies even more expensive was the fact that there were exchange rate fluctuations favoring Indian currencies. Second, Schindler’s manufacturing cost structures were compatible with customization, not commoditization. According to “ Exhibit 6”, Indian people focus on price or service, not safety or technology.
One of the biggest challenges he faced as getting transfer costs for elevators to a price point internally where building elevators made sense. The case study details the very slow ramp for sales. As Luc Bonnard, how would you evaluate Silvio’s performance for the first seven months?
Voice of the Customer is not just about surveys anymore. Download this white paper and learn how you can easily gather and leverage data from all customer touchpoints, including social media, to deliver a superior multichannel customer experience. [Access White Paper] For the last four years I’ve been teaching an international business course occasionally for a local MBA Program.
My students are all working professionals who come to class for discussion and debate, not sermons. Case studies are the perfect teaching tool for this audience; there is plenty of room for debate and analysis. Layer in expansion into high-growth economies, and class attendance soars. The class’ favorite case study is Silvio Napoli at Schindler India (A), available from Harvard Business Online here.
The gist of the case study centers on Silvio Napoli, an ambitious strategic planning manager at elevator/escalator company Schindler, assigned the task of creating a subsidiary in India. He faced three major challenges: First, he was going to be selling non-standard products in India, where customized elevators are critical to any new entrant strategy; his expansion strategy made cost reduction, not product customization, the top objective; and inter-company collaboration to the new low-cost subsidiary was sporadic, which delays in parts lists, design specifications and engineering support. < script language=”JavaScript” type=”text/javascript”>< noscript> Meet Silvio Napoli
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Nike vs Adidas, market and comprehensive competition analysis and case studyEXECUTIVE SUMMARYSince the birth of the Internet in 1969 to its commercial adoption in the 1990s, the World Wide Web has enabled businesses and consumers to connect with one another to exchange and share information, anywhere and anytime. The web has provided consumers and businesses with enormous advantages by reducing ...
After having taught this case study for four years and having gone through thorough discussion and analysis of its points, I decided in preparing for a recent class to cut through all the conjecture and get right to the source to see what really happened. I called Silvio Napoli. He graciously gave me fifteen minutes of one of his busy mornings. We went over the case’s more glaring lessons quickly, and then Silvio provided some great insights into lessons he learned trying to create a subsidiary for Schindler in India.
Here are his take-aways: •A “swatch” strategy of low-cost market entry was the wrong choice. In the case study much is said about how Schindler’s CEO was fascinated with the success of low-end, mass produced Swatch watches — a 90’s phenomenon — more than one General Manager of Manufacturing Operations strove to emulate this low-end production strategy. •Schindler’s manufacturing cost structures were compatible with customization, not commoditization. Silvio said that was one of the biggest challenges he faced as getting transfer costs for elevators to a price point internally where building elevators made sense.
The case study details the very slow ramp for sales — Silvio says this was a great lesson learned as a young manager. •Exchange rates and unforeseen duties further frustrated market development efforts. Making the transferred sub-assemblies even more expensive was the fact that there were exchange rate fluctuations favoring Indian currencies, and the duties that were increased from 22 to 56 percent for non-core goods during the first summer of Silvio’s efforts. •Creating a sourcing function in India took longer than expected.
To overcome the duties and equalize the exchange rates, Silvio and his recruited management team started sourcing efforts in India. These efforts took more time than expected. •Cultural differences were immediate and costly. This sounds like common sense, but Silvio said its one thing to say it, and quite another to live it. From reading the case study its clear that Schindler manufacturing sees high customization driving higher gross margins, and that this new Swatch strategy is a definite threat to their approach to business. •Don’t confuse tactical wins with strategic victories in foreign markets.
The Business plan on Silvio Napoli at Schindler India Case Analysis
Silvio Napoli was a young an eager executive that had a bold and aggressive business plan for entering the Indian elevator market for his company, Schindler. Having developed the business plan for entering the Indian elevator market, Silvio was selected by his company to lead the development of Schindler India, a wholly owned subsidiary of the Swiss based company. His plan was to differentiate by ...
Within six months Silvio had opened offices in New Delhi and Mumbai, hired five Indian managers, each one very skilled in local elevator markets, and begun to aggressively implement the business plan for the subsidiary. Still, no new business was won. Tactically the execution had been perfect, yet strategically the swatch strategy was not winning any deals. •China is a tough sell. Silvio relayed how the lessons learned in India are useful for selling into China; yet he says the effort required is significantly greater than getting sales in India once Schindler began customizing its elevators.
He says there are successes in China but he thinks companies are thinking it’s much more painless than it really is. •Don’t take the alliance between India and China lightly. Silvio sees this development as fundamentally re-defining the region and having global impact very quickly. An excellent analysis of the strategic impact of this relationship has been written by Jairam Ramesh, a member of the Indian parliament, in the April 18th edition of the Wall Street Journal.
The article is here, and you’ll need Wall Street Journal online access to retrieve it. You can find Jairam’s Web site here. There’s another very good article on this alliance written by Paul McDougall of Information Week here. Bottom line: No amount of process re-definition could have saved Schindler the pains associated with attempting to move into India with a low-cost strategy. Fundamental assumptions about India just wanting low-cost elevators where customization wasn’t a requirement took the effort of creating a subsidiary to learn from. One of my best students put together this final presentation of his research.
The Term Paper on Ultrasound Machines India China And A Skewed
General Electric Co. and other companies have sold so many ultrasound machines in India that tests are now available in small towns like Indergarh, where there is no drinking water, electricity is infrequent, and roads turn to mud after a March rain shower. A scan typically costs $8, or a week’s wages. GE has waded into India’s market as the country grapples with a difficult social issue: the ...
If you’re interested you can get the slides here. Finally, last week’s article on Gartner’s Magic Quadrant generated some hilarious e-mails as many people have created their own quadrants of just about anything you can imagine. The best link however came from Tekrati’s Barbara French who provided this link. Thank you all for sharing your own magic quadrants – See more at: http://www.crmbuyer.com/story/42512.html#sthash.TAhVJ5n7.dpuf
