Embraer is a Brazilian aerospace conglomerate and the third largest producer of commercial jets and executive jets in the world. It was privatized in 1994. Embraer has a global presence with manufacturing plants, sales and service centers across the US, Europe, China, Portugal, and Singapore. The company focuses on regional jets that carry 37 to 50 passengers and has over 90 airline customers in more than 50 countries. Embraer has been successful due to its global strategy, focus on emerging markets, efficient operations through lower wages in Brazil, and innovation through significant investments in research and development.
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Embraer is a Brazilian aerospace conglomerate and the third largest producer of commercial jets and executive jets in the world. It was privatized in 1994. Embraer has a global presence with manufacturing plants, sales and service centers across the US, Europe, China, Portugal, and Singapore. The company focuses on regional jets that carry 37 to 50 passengers and has over 90 airline customers in more than 50 countries. Embraer has been successful due to its global strategy, focus on emerging markets, efficient operations through lower wages in Brazil, and innovation through significant investments in research and development.
Embraer is a Brazilian aerospace conglomerate and the third largest producer of commercial jets and executive jets in the world. It was privatized in 1994. Embraer has a global presence with manufacturing plants, sales and service centers across the US, Europe, China, Portugal, and Singapore. The company focuses on regional jets that carry 37 to 50 passengers and has over 90 airline customers in more than 50 countries. Embraer has been successful due to its global strategy, focus on emerging markets, efficient operations through lower wages in Brazil, and innovation through significant investments in research and development.
Copyright:
Attribution Non-Commercial (BY-NC)
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Download as PPTX, PDF, TXT or read online from Scribd
Embraer is a Brazilian aerospace conglomerate and the third largest producer of commercial jets and executive jets in the world. It was privatized in 1994. Embraer has a global presence with manufacturing plants, sales and service centers across the US, Europe, China, Portugal, and Singapore. The company focuses on regional jets that carry 37 to 50 passengers and has over 90 airline customers in more than 50 countries. Embraer has been successful due to its global strategy, focus on emerging markets, efficient operations through lower wages in Brazil, and innovation through significant investments in research and development.
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AHMED PASHA ARIJIT CHATTERJEE FAISAL AL-JALAHMA
INTRODUCTION
BACKGROUND FINANCIALS HOME COUNTRY FACTORS INTERNATIONALISATION CORE COMPETENCIES MARKET CONDITIONS
BACKGROUND
Created on August 19, 1969 under government control Embraer got privatized in 1994 Four segments: Commercial Jets, Executive Jets, Agricultural planes, Defense & Security World s third largest aircraft maker Over 90 airline customers in over 50 countries Company structure: The company is now owned by a group of Brazilian investors, including financial group Bozano and pension funds PREVI and SISTEL, which together hold 60 percent of voting shares. A group of European aerospace companies - Dassault Aviation, EADS, Snecma, and Thales jointly own another 20 percent The company s niche is regional jets that carry from 37 to 50 passengers
FINANCIALS
GROWTH
EMPLOYEES
Growth per customer segment
REVENUE
Growth per market segment
HOME COUNTRY FACTORS
Strong ties with Brazilian government Abundance of qualified and cheap labour available About 95% of Embraer employees are Brazilian They have an international shareholder such as European aerospace companies which gain them advantage in maximizing their quality and benchmarking their jets with Airbus
Total population: 203+ million Literacy rate: 88.6%
INTERNATIONALISATION
USA 1979 Florida Greenfield project Sale of aircrafts, training for pilots and mechanics, supplies replacement parts and provides technical assistance. 2002 Tennessee Acquisition of Reliance Aerotech and Celsius Aerotech Maintenance and restoration of aircraft interiors, especially for the North American market
2008 Florida Organic growth Center for Maintenance, Repair and Overhaul to service executive jets 2008 Arizona Organic growth Service Center 2011 Florida Organic growth First U.S. aircraft final assembly plant dedicated to the executive jet business
INTERNATIONALISATION
CHINA FRANCE 1983 Paris Greenfield project Embraer Aviation International Objective: concentrating sales and providing technical support to the new Embraer clients in Europe, Middle East and Africa 2001 Organic growth Service Center 2000 Green field Sales and Service Center 2003 Joint venture A joint venture with the Aviation Industry of China a separate entity, based in China, called Harbin Embraer Aircraft Industry (HEAI)
PORTUGAL 2004 Acquisition Embraer gained 70% share of General Aeronautical Material Workshops Maintenance, repair, general overhaul, modernization, modification and integration of aircrafts, engines, avionics and accessories. It is also responsible for the manufacturing and assembly of aircraft components and structures in metal or in composite materials. 2008 Lisbon Organic growth Announced of two new facilities dedicated to the manufacturing of machined metallic structures and ensembles made of composite materials.
SINGAPORE 2000 Greenfield project Sales Center 2010 Organic growth Distribution Center Embraer's entire logistical support and commercial and executive aircraft parts in the region, started to be managed by the regional distribution Center in Singapore
INTERNATIONALISATION
MOTIVES Market seeking Strengthen their presence: manufacturing, after-sale support and customer service All Sales & Service Centers / Manufacturing facility in USA Efficiency Seeking manufacturing plants Portugal: access to qualified labour, logistical infrastructure and the existence of the Aeronautical Industrial Park, located near the municipal airport China: Increasingly talented, ambitious and low cost labour Strategic Markets executive planes Entered USA, China and Singapore
CORE COMPETENCIES
Truly Global 2006 90% of its sales were outside Brazil Embraer s operations are strategically located worldwide. (America, Europe & Asia) Embraer has found the best way to reach its global customers while leveraging the research capabilities of talent from multiple areas. It sells 95 percent of its aircraft in U.S. dollars, so its stock does not have the currency risks that Brazilian investments are notorious for Efficient Average wages are less than one third of rival Boeing because of home country wage levels Embraer has longstanding and deep ties to the Brazilian government Lower fuel consumption/emission than its competitors Embraer s aircraft design Embraer has been able to design common platforms for its aircraft. Without getting into detail, this means that these aircraft have up to 95 percent commonality, including spacious cabins, large cargo compartments, and superior performance capabilities Highly innovative: invested $1 billion in designing a larger plane that seats 70 to 118 passengers for rapidly growing low-cost airlines Invest 6 percent of revenues into research and development for the past six years; that is over $1.1 billion invested in R&D since this decision Embraer trains its engineers, not only in aeronautics, but also in market research and finance, allowing a broader understanding of the industry
MARKET CONDITIONS
Greater demand for regional jets (30 seats to 120 seats) from India and China Today s News: Asia has surpassed Europe in the number of millionaires Cost sensitivity has increased after 2008
ERJ145 and E170/190 have gained traction in emerging markets Should increase focus in India, China and GCC
Invested in the future recycling 80% of production material Lower fuel consumption/emission than its competitors
Stiff competition from Bombardier of Canada and Airbus and Boeing
Very small in comparison to Boeing and Airbus Low demand for corporate jets after the financial crisis.
Enhanced militarization
Use lobbying power to get into military contracts with untapped nations
SOURCES
Embraer Historical Center http://www.centrohistoricoembraer.com.br/en/linha-tempo/default.htm Gale, Cengage Learning (2009) The emerging markets century revisited http://www.freepatentsonline.com/article/Indian-Journal-IndustrialRelations/210171569.html IAB Media, LLC (2003) Embraer (Empresa Brasileira de Aeronautica) http://www.investingacrossborders.com/story_embraer.htm Jesse Kedy (2007) Embraer: A Critical Evaluation of Global Strategies and Structure Promocorp Group LP (2009) Case Study: Embraer, a Latin American Success Story Press Room, Embraer in numbers http://www.embraeraviationservices.com/english/content/imprensa/embraer_numeros.asp Space Mart (2010) Brazil's Embraer expands into China http://www.spacemart.com/reports/Brazils_Embraer_expands_into_China_999.html
