Finance

The ascend of Silvio Napoli up the corporate ladder of Schindler was swift enough to give him greater responsibilities than most managers possess at the age of 33. The business plan to enter the Indian market was a strategic one – one which meant greater presence of Schindler in the market elevating its market share and revenues. There were several challenges though, in the process that presented themselves like two-edged swords to Napoli and company. Napoli was in-charge of the project and had to be accountable for the happenings in India to Alfred Schindler and the VRA.

Amongst the various personal and business issues, the key issue that was of the highest concern for Napoli while setting up the plan in India was the fact that the project had over-run its development time and had not yet registered its first sales in spite of the business plan conjuring sales of 50 elevators in the first year. The cost of importing the raw materials and the plant to set up the manufacturing facilities was of an even greater concern for Napoli. Already lagging behind in the costs and the time targets, Napoli had to conjure up things so that within the next 4 months he would be in a position to begin selling in the Indian market.

It is true that he had a team of exceptional managers under him, however, this did not help him fight the uncertainties laden with the project – standardization was one standard that was not consistent for the company. There were more instances of customized orders for plant components than there were for standard parts and the import of the raw materials of those required extra costs and led to the $10 million business plan becoming increasingly costly for the Schindler (Silvio Napoli…India, 2009). It was important for Napoli to manage the development time and the cost of setting up the facilities in India through negotiation and planning – perhaps this function was marred due to his personal problems that kept him and his family on the run.

Recommendations
In the light of the facts presented in the case, it would be highly advisable for Napoli to be prepared to answer Bonnard regarding the progress in India stating clearly the facts and realities that he has faced in the Indian market.

The fact that there were unanticipated problems in the Indian market – mistakes made by subordinates and market dynamics not working out the way predicted – made it difficult for Napoli to achieve the targets set out for him by the VRA. Considering the cost overruns, there should be a revision of the business plan that was presented to the Board earlier. Bonnard and the directors should review the reasons that were the source of the overruns and advice Napoli on the basic alternatives. Napoli, who is still a young manager who has a lot to learn from experience, needs to go one step ahead with the cost overruns and re-draft the costs by negotiating with the locals.

Though nothing much can be done to avoid the importing costs, Napoli can ensure that there are fewer instances of customized orders or the facilities are transformed to make it customizable. This decision will be based on the finalization of the feasibility of the two options and thus will require expert advice and analysis – something Napoli is authorized for but would definitely be more worth coming from Alfred and Bonnard.
Thus, Napoli needs to discuss the situation with his managers, clearly stating the exact time and cost overruns he is expecting from his team, try to get the best from his five managers and rely on expert opinion and judgment regarding the final steps to be taken in India. It is a matter of great importance for Schindler to realize the project that is under Napoli in order to get a firm hold in the Indian market and thus Napoli needs to talk to people and seek solutions that will have a backing of experience and knowledge.