Schindler

India
ARIJIT DAS
SAMEER SHAIKH
DHEEMAN BHATTACHARYA
 Contents
• Characters in the Case Study • The Indian Elevator Market
• History of Schindler • Competition
• Indian Operations • Product strategy
• Schindlers India Strategy: The • Outsourcing Strategy
Swatch Project
• Business Challenges
• The Indian Entry Project
• What Went Wrong?
• Recruiting the Team
• Conclusion
• Man Management: Developing
• Current Scenario
the Relationship
• Summing Up
• The India Business Plan
 Characters in the Case Study
Schindler top management staff:
• Alfred N Schindler ( chairman and CEO)

• Luc Bonnard ( Vice chairman of the board and

member of executive committee)

• Alfred Spoerri ( member of the board of directors

and executive committee)
Contd.
Schindler India key manager profiles:
• Silvio Napoli( vice president, Schindler South Asia)

• Mehar Karan Singh ( MD)

• T.A.K Mathews (VP-field operations)

• Ronnie Dante ( GM- Engineering)

• Jujudhan Jena ( CFO)

 History of Schindler
• Established in Switzerland, 1874 by Robert Schindler
• Began manufacturing elevators in 1889
• Did not have a local market base until 1950s;
by appointing a local distributor
• Alfred N Schindler took over the company in 1987;
becoming the 4th generation in line
• By 1998, Schindler accrued revenue worth US $4 billion
around the world
• Has over 38000 employees in 97 subsidiaries
 Indian Operations
• The First elevator by Schindler in India installed in 1925
• In 1958 long term distribution agreement with ECE
• In 1985 technical collaboration with Mumbai based company Bharat
Bijlee Ltd.(BBL)
• After acquired 12% equity stake in BBL, Schindlers became the No.2
player in Indian elevator market
• A decade later they maintained 10-15% share in market
• In 1995, A. Schindler reviewed the long term strategy of the company
and identified the Indian market with huge growth potential
• In 1996, collaboration with BBL ended and Schindler began
considering option to establish own operations in India
SCHINDLER’S
INDIA
STRATEGY
 The Swatch Project
• The project goal was to develop a standardized elevator at a
lower cost than the existing, more customized product
• The outcome was the S001 an elevator that can’t be
customized
• Used many parts supplied from outside
• Used newer process
• The entire supply chain was restructured
• Cycle time was reduced to half of the standard 20- to 30-
weeks
 The Indian Entry Project
• Boston Consulting Group (BCG) was engaged by Schindler to
look for alternative local partners as negotiations with BBL
broke down in India
• It was now legally feasible to start up wholly owned company
in India for a multinational
• A business plan for Schindler Market entry was approved by
the Corporate Executive Committee(VRA) in October’95
• Mr. Napoli was offered the job of creating the Indian
subsidiary
• In November’95, Mr. Napoli came to India for the first time
 Recruiting the Team
Agent in Pakistan
Silvio Napoli Agent in Srilanka
VP S Asia Operation Agent in Bangladesh

M.K. Singh
Managing director

T.A.K. Mathews Ronnie Dante J. Jena Pankaj Sinha

Field Operation Engineering Finance Human Resources

New Technical
Hade of Logistics Executive
Installation Development
Account Vendor Administrative
Management Development Support
Support Commission Executives

Trainees Support

Hade of Existing Existing Installations

Installations Team leader/Team
member
 Man Management: Developing
the Relationship
• There were initial clashes of timetable of the senior staff as they
were still not finished with their previous job

• Different management styles of the top executives also led to

problems

• Silvio Napoli was regarded as a tough and aggressive manager by

the staff members

• The scenario greatly differed from where Mr. Napoli came from and
India

• The internal environment of the organization was informal

according to the employees
 The Indian Business Plan
 The plan had two basic elements :

• Sell a focused line of standard products

• Outsource key manufacturing and logistics functions

 The business had many opportunities coming up in India after the

liberalization of Economy in 1990’s
• Construction industry was reviving

• Rapid urbanization

• A ban on collapsible gate elevators was enforced by the Indian

Standards Institute (ISI)
The Indian Elevator Market
Indian Market Structure

1%
14%
Manul
Low Rise
Mid Rise
50%
High Rise
35%
 Competition
Schindler India faced the competition from four major
companies; they were:
1. Otis ( market leader, with 50% market share)
2. Kone ( market challenger, 8.8% market share)
3. BBL (Market Follower, 8.6% market share)
4. ECE( market follower, 8.4% market share)
Otis was a threat for Schindler India because it already had
a good customer base, 61.5% of which were under
maintenance contracts
 Product Strategy
• Schindlers business was trying to make the Swatch
project products as their core competence ( S001)

• They were also bringing in a more sophisticated

model, the S300P, of S001

• Both products can meet the Indian requirements

• Break-even was predicted at four years, with the

sales reaching a double digit growth figure
eventually
 Outsourcing Strategy
• Silvio Napoli's business plan was to outsource the
production of 90% of the components of S001 from
local suppliers
• the safety equipment would be imported from
Schindler plant in south-east Asia
• The basic on-site assembly work would also be
outsourced

• Eventually they would install their own dedicated plant

to manufacture the parts
 Business Challenges
• Sales force was bringing in orders, but not for the
standard products

• The transfer cost of S001 has increased

• The import duties on elevators has also increased

• There was lack of motivation in the organization

about the sales strategy

• Things were not going well

 What Went Wrong?
• Non-cooperation from the European plants

• Increase in transfer rates

• Increase in import duties

• Commitments to the booked orders

• Need of the customers were judged wrongly

• Lack of vision
 Conclusion
• The business plan was partially successful

• Lack of contingency measures, however there, lack

of enthusiasm to follow them
• Value congruence was not achieved in the
organization
• Lack of goodwill had an impact on the sales

• Communication problems with the European

superiors increased pressure
 Current Scenario
• Schindler India is the second largest company in
the elevator segment of India

• Have stepped into escalator segment

• Despite the challenges met in the beginning, the

annual growth rate is 17% unit increase and 27%
increase by value

• Schindler India’s products move 90 million people

daily
 Summing Up
Characters in Indian The Swatch
the case study History
Operations Project

Developing the Recruiting The Indian

Relationship the Team Entry Project

The Indian
The Indian
elevator Competition
Business Plan
market

What Went Business Outsourcing Product

Wrong? Challenges Strategy Strategy

Conclusion Current
Scenario
THANK YOU
Any
Questions?????