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Silvio Napoli at Schindler India (HBP case) Key points

Controlling the value chain without completely owning the value chain
o Schindler India, after the initial hiccups and teething problems, became a good
example of how it could do quite well without owning major parts of the value chain
R&D and critical components were provided by the Swiss Headquarters, it had
outsourced local production in India, it also outsourced logistics operations to an
international reputed courier company.
o It was a little slow in building a maintenance portfolio (at which Otis was very good),
but later on it picked up on that revenue stream also.

Organizational culture versus National culture


o It is important to note how Schindler had a very different culture compared to the
general business culture that existed in India at that time, especially in those sectors
who were the customer segments for Schindler.
o It could have simply adapted itself and accepted the Indian way or working. Rather
it tried to bring in better professionalism to that industry, stuck to its strategy of
standardized lifts (initially at least), and brought the account-management concept to
elevators and escalators industry.
o It can be said that it did not disrupt the national culture too much (in that industry),
but at the same time tried to overlay its organizational culture on the existing
culture.
o You should be aware about Hofstedes national culture dimensions in this context.

Strategic logic and Organizational logic


o Strategic logic is the more concrete analytical logic behind any decision or activity. For
example, when Luc Bonnard had to analyze Silvios performance for initial period, he
could have very well used this logic and concluded that performance is very poor as
not a single lift installed and no maintenance portfolio (lagging indicators in the
context of the BSC).
o However, it can be assumed that Bonnard took a more organizational logic, and
backed Silvio by recognizing that he had set up a good management team, he had
already taken care of succession planning through MK Singh, he had changed the way
the industry worked (at least at a smaller scale) without taking on Otis, the market
leader. Organizational logic is more abstract and subtle.
o This probably took the bigger firms in the industry unawares. And they may not have
considered Schindler as any threat to their market share. But slowly Schindler started
eating into their market share and even bagged prestigious government contracts for
infrastructure projects like Mumbai metro, Delhi airport express link and Kolkata &
Chennai airports.