Rethinking the Joint Venture Strategy 1 . What Decisions or Actions need to be taken? For Luck Bonanza, the vice chairman, board of directors of Schneider Holdings Ltd, the decision to make was to allow Silvia Annapolis, the Indian country manager to continue managing after 8 months of operations without installing a single elevator. More importantly Silvia needs to decide whether to stick with his business plan that he wrote in Switzerland or come up with a new business plan that will improve his performance in India. 2.
What is Your Recommendation(s)? As for Luck, I recommend he allows Silvia to stay at his post. Silo’s education and experience is very extensive and I believe Silvia is the right person for the Job. Silo’s aggressive business plan relied on 2 main factors: 1- Low cost elevators that did not allow any room for customization. 2- Outsource the manufacturing of parts to local companies. As one can see from the text, insisting on a standard model did not allow Silvia to install any elevators even though he had order since the orders included customization.
Furthermore, outsourcing also was a project that could not even get darted since the plans in Europe did not supply the a parts list. Business was not being actualities according to the current plan and therefore I recommend the following: 1- As Silvia is establishing business in India, he should consider maintaining Chandler’s installed elevators that were previously sold in India before focusing on selling new elevators. 2- Instead of outsourcing the manufacturing of parts, Silvia can build a new plant from the ground up to build the elevators locally. – Business plan should be more flexible and adapting. 3. Why is this the best Alternative? According to my three recommendations above, here is why I believe these recommendations are the best alternatives. : 1- Since Schneider installed elevators in India as early as 1925, Silvia should go after those customers and offer them contract to service their elevators. This can help Silvia get business started in India, and help him in generating not only clients but most importantly cash flow that can help fund the early start of his operations in India.
This would also give Silvia a comparative advantage over other big market comparators such as Otis who have hold over about 0% of the elevator market in India. Let’s not forget that Chandler’s elevators if not maintained by Schneider, a competitor is most likely doing that Job. 2- Installing a new plant to build elevators in India will eliminate Silo’s problems that come from the lack of response from the European plants and give him more control over customizing when needed. A local plant will also eliminate the custom fees Silvia fees rose from 22% to 56% as Silvia began business in India. – The swatch project of entering a market with a low cost product proved not to work for Silvia in in the Indian market. Silvia should not be so rigid on insisting on no customization since orders for customization are coming through. Instead, Silvia can focus on improving sales and gaining a higher gross margin from these sales. As Silvia is entering a new market, being flexible, adapting to the realities of the new market and learning will ensure more growth as time passes. 4. What are other Alternatives did you consider? Other alternatives is for Silvia to stick with his current business plan and ask for more time to show results.
The advantage of doing so is not upsetting corporate nice Silvia was hired on the basis of his current business plan. Keeping the business plan will allow Silvia to continue business as usual. However, after considering other alternatives such as the ones mentioned above, I concluded that a modified business plan will improve the overall business. Having a battle with corporate over a modified or a change business plan will allow Silvia to adapt to the Indian market and ensure success while sticking to the plan on hand will not. 5. Implementation challenges There are few implantation challenges facing Silvia.
On the personal level, his attitude of strong headiness excursion that worked for him in the past needs to change to adapt for the new cultural environment of India. Silvia needs to learn how to be more flexible and adapt to his environment to be able to succeed. Plotting an elaborate plan that worked in Switzerland does not ensure its success in India. The second challenge is approaching corporate about changing the plan. Hiring Silvia in the first place was accepted because of his business plan. Silvia should ask for the help of corporate to allow him room to alter the plan to achieve better results than the ones he has been having.