Embraer Case

EMBRAER

SHAKING UP THE AIRCRAFT MANUFACTURING MARKET

View Point

The case is examined from the view point of Embraer jet manufacturer, especially since Embraer has become private company in 1994 and as of now is under surveillance of CEO Mauricio Botelho.

Time Context

This study case will examine the Embraer condition from its early years of 1994 when it was privatized to 2005.

Central Problem

Major Problem:

* Successfully introduced seven commercial aircraft models to the market

* Increased dominance in aircraft industry since 1995 and became fourth-largest commercial airplane manufacturer in the world

Minor Problem:

* Other aircraft manufacturers are trying to give competitive respond to stop Embraer’s dominance in aircraft industry

Objective

Must:

* Predict how other aircraft manufacturers especially Airbus, Boeing, and Bombardier will respond to the success of Embraer’s rapid growth in aircraft industry

* Prepare for upcoming attacks from Embraer competitors (Airbus, Boeing, and Bombardier)

Want:

* Keep Embraer’s dominance in aircraft industry against other dominant aircraft manufacturers

Area of Consideration

There are several areas of consideration need to be examined before decision making process:

* There was a surge in regional jet adoption and deployment because of replacement of turboprops on low-density routes

* Government control of routes and elimination of pricing which causes increased competition -> low-cost fare is the most profitable

* Expansion in jets segment and cost-effective

* Competition strike where bombardier, Airbus, and Boeing launched their competing aircraft against Embraer 190

* Terrorist attacks in the United States on September 11, 2001 which delivered blow in aircraft industry which caused price wars

* Shifted demand to ward smaller, more efficient planes

* Increased volatility of passengers demand which created a...