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Case Study

Embraer: Flying into stormy weather

By Balaji S. Chakravarthy, Carlos A. Primo Braga, Patricia Santos and Athanasios Kondis

15 pages

December 2014

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Reference: IMD-3-2391

The case follows the rapid rise of one of Brazil’s leading companies, Embraer. By 2013 it was the third largest commercial aircraft manufacturer in the world. The case describes the challenges that Embraer faced in 1994 that led to its privatization. It also highlights the key strategic choices that top management made subsequently to help the company achieve sustained profitable growth over two decades. Embraer diversified from its initial base as a defence contractor in Brazil to become a leading manufacturer of civilian regional jets for international markets. It then moved into business jets. By 2013 Embraer was a respected name in the international commercial aircraft industry. However, there were mounting challenges for the company. The case describes the slowdown in the Chinese market for business jets, growing competition from China and Russia in regional jets, ambitious growth plans of its traditional rival Bombardier, and the move by industry giants Boeing and Airbus to offer competing alternatives to Embraer’s regional jets. How should Embraer navigate the stormy weather ahead is the problem posed by the case.

Learning Objective

1) To critically evaluate what it takes to be a true global contender coming from an emerging market like Brazil. 2) To appreciate both the pluses and minuses of being a national icon and a key domestic defence partner while trying to be one of the leading manufacturers of civilian aircrafts in the world. 3) To appreciate the transformation journey that Embraer has been through and to plot the next trajectory for its renewal.

Keywords

Diversification, Strategy, Internationalization, Organizational Change, Agility, Privatization, Emerging Country, Competitor, Global Company

Settings

World/global, Brazil
Embraer, Manufacturing, Aerospace and Defense
1994-2014

Type

Published Sources

Available Languages

English

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