Silvio Napoli, a Harvard-educated MBA was selected as head of India expansion project from Schindler Holding Ltd. Napoli was involved in the planning of the Indian subsidiary and had worked closely with key Schindler executives on other strategic initiatives. Schindler Holding Ltd, a Swiss based organization headed by Alfred Schindler, was technology leader in elevator and escalator manufacturing. Worldwide it had revenues of $4 billion and employee strength of over 38,000 in 97 subsidiaries. Schindler was confident that the Indian market provided significant opportunities for growth and learning from Indian market can be employed at other locations as well. India was going through a phase of liberalisation and it was feasible to start up a 100% wholly owned company in India. The rapidly expanding residential segment accounted for 70% of the Indian market, followed by commercial segment with 20% share. Rest was accounted by hotel (4%) and others (6%). Major players accounted for more than three fourths of Indian market value with Otis (50%), BBL (8.6%), Finland’s Kone (8.8%), and ECE (8.4%). Mitsubishi and Hyundai Elevators were other significant players. Remaining 23% of the market, price sensitive low end, was controlled by 25 regional players. Indian market was highly price sensitive and price pressures were expected to increase. However, surveys indicated that service was also important in buying decision, as were financial terms. Schindler decided to enter India on the basis of the business plan that Silvio Napoli prepared. Rather than focusing on Schindler’s success with custom equipment, the India operations would focus on simple, standardized products with no allowance for customization. Model S001 was to be used to win share in low-rise segment and then pickup in mid-rise segment with S300P. In addition, Schindler planned to outsource all of the manufacturing of components to local Indian suppliers with a few critical (safety related)...
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