Questions:
X Evaluate the logic of Silvio Napoli 's strategy for selling standardized elevators in India.
X What should Silvio do about the order for non-standard elevators?
To understand Silvio Napoli 's strategy for selling standardized elevators in India, let us first take a look at the Indian markets using the CAGE framework:
Culture Economic
- Sensitivity of Indian employees to organizational power and relationships
- Different management styles of Indian managers ¡V "friendly and easygoing"
- Huge curve to adjust to Indian living conditions ¡V housing, school, doctors, grocery shopping, etc.
- Mostly untrustworthy middle-men offering all kinds of services
- Difficult to find office space
- Inability of the market to
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To support this, the logistics, manufacturing and basic installation of the elevators was to be all done in India. But, this meant that the original Swiss policies and procedures used at Schindler 's operations in Europe would need to be transferred over to their manufacturing in India. Based on his research of the Indian market and its culture, Silvio was aware that it would not be an easy task for their Indian manufacturing to learn and incorporate the procedures.
So, Silvio decided to minimize the learning curve burden for their manufacturing operations by picking only two elevator configurations that Schindler India would build:
¡V Model S001 for low-rise buildings ¡V completely outsourced to local suppliers
¡V Model S003P for medium-rise buildings ¡V imported
He also decided that these elevators would be standardized and no customization would be allowed for the Indian market. This was to keep complexity and costs low and to make Schindler an efficient manufacturing operation.
However, there were several problems with this strategy:
¡V Schindler 's corporate structure and management practices were misaligned to the Indian subsidiary 's objectives
¡V The generic offerings S001 and S003P had thin profit margins and they did not fit well within the business plan of offering customized sales and service
¡V Schindler would be
stems from two main factors, lack of awareness of the company’s products due to limited
One of the biggest needs for improvement was the assembly process. Although several changes were made throughout the years, quality and efficiency still fell below expectations. Hinrichs implemented the newly developed assembly which consists of two separate work stations that allowed operators in the adjacent stations to share the expensive balancer machine. These assembly cells were much more efficient as workers were no longer forced to wait for another person or machine in the process. Each cell was built like the other with quick turn set-up which created flexibility in the process while also reducing tooling inventory by almost a half. Now cells
Ralph suggests building only one section at a time – cellular manufacturing. In this case the operation becomes so small that the planning and control system designed by Joe becomes redundant.
Another cause is represented by the Manager’s idea that he can develop a well-established business in the Eastern German because of cheap labor and raw materials. His choice to expand on German marketplace was not based on rational facts or clear developed objectives.
Optimization of machinery so that production setups are not required for small customizations which can be managed manually.
It lacks thorough understanding of its target market (the needs of the present and future customers).
The three scenarios illustrated above clearly shows that the investment in the new machine creates greater value to the company, unless there should be some unexpected turnout in sales. By acquiring the Vulcan Mold-Maker machine Fonderia di Torino S.p.A will be able to replace labor intensive required semi-automated machines with automated machines, thus reducing medical claims. The company will also benefit from higher levels of product quality and lower scrap rates. Labor costs will be reduced by almost 298,334.4
There is a growing threat from generic competition due to their global operations that can achieve lower-cost of supplies. Also the threat
After analyzing the results from the previous quarter, it was determined that the prices set for each segment were not sufficient. Product sales priority were also not properly adjusted. With the R&D investments, sales priorities needed to be changed for the main focus to become the most profitable market segments. Prices were not competitive which in turned decreased revenue, market share, and profitability. To become more competitive we altered the prices in each market segment. The Workhorse product was the first to change, the price was lowered to $2500 in an attempt to increase sales; at this price Team 4 was still making a profit on this product, as well as making the price much more competitive. The Workhorse sales priority was also lowered to 3rd in Americas and 4th in APAC and EMEA. This product was not selling as well as we had hoped, and was no longer as profitable as it once was which led to this decision. Next, the Innovator product’s price was adjusted; this involved a price increase to $4100. This price was adjusted to include the new
* The vehicles in the factory can’t be built efficiently by the operators as the correct numbers of tools are unavailable.
Levitt and Sons needed to find building solutions that would suit the taste of their buyers, would be cost efficient thus resulting in an inexpensive price, and could be produced rapidly and in high yield. To solve this challenge Levitt and Sons designed a single level, four-room home based on the traditional American Cape Cod style.7 This simple design was modified to form four basic designs that were to be replicated. To produce the homes as quickly as possible Levitt and Sons based their construction strategy on the automobile assembly line of Henry Ford. Instead of moving the parts down an assembly line, Levitt and Sons move the labor along the product line.8 This method, along with the incorporation of off-the-shelf products, allowed for the rapid production of homes. The money and time saved on production and design allowed homes to sell at a lower price. These small homes
Too many product types were launched at the same time with little differentiation and too much technology for the consumer to understand and digest.
Three key issues contributed to the disappointing sales. First, internal organizational challenges prohibited the growth of the line. Rigid
Mr. Fisher, President of Central Steel Door, made many mistakes in his efforts to hire a sales manager in Europe. First, advertising in the International Herald Tribune is only going to attract Americans who lack the intelligence and in-country expertise the company needs to successfully compete in unfamiliar markets. Second, he fails to make the most of these candidates that these ads generate by asking them for referrals and offering an incentive. He fails to use the limited success of the ads to successfully network into the international community. Third, the lack of sensitivity ot living costs in Belgium and Germany for sales manager led to them quickly resigning. Fourth, Mr. Fisher didn't coordinate with the Belgian government to ensure employment taxes were paid on time, leading to a bill for back taxes of thousands of dollars. Fifth, the hiring of ten local people to staff distribution centers and the firing of five of them not only had to be communicated months in advance to local government authorities, Central Steel Door is legally obligated to pay them for a full year of their salaries based on German law. Sixth, the ignorance of local, regional and national laws ends up costing the company more than it made on any sales in the region ruing the case study's timeframe. Seventh, Mr., Fisher neglected to consider how the cultural differences between the Untied
Product Design: The chairman chose a stacking design that proved be advantageous over companies that chose a trenching design. A core design was also used for their customized products.