...Embraer is a Brazilian aerospace company that produces commercial, military, executive, agricultural aircraft and provides aeronautical services. The Cessna Aircraft Company is an American general aviation aircraft manufacturing corporation headquartered in Wichita, Kansas. Best known for small, piston-powered aircraft, Cessna also produces business jets. Market Segmentation Cessna Aircraft are sold to private businesses, governments, individuals, freight airlines, charter airlines, and air taxi companies. Cessna has several competitors domestically and internationally in various market segments. Cessna’s aircraft compete with other aircraft that vary in size, speed, range, capacity and handling characteristics on the basis of price, product quality and reliability, product support and reputation. Embraer (ERJ) operates in the following four major business segments: commercial aviation, defense and security, executive jets, and agricultural aircraft. Commercial aviation is Embraer’s largest business segment, contributing about 52% of the company’s total sales. Applying the concepts of determinants of service quality by Parasuraman, Zeithaml, & Berry (1985) to Embraer and Cessna Reliability: Cessna’s Promise “Safety is the top priority for Cessna when designing and manufacturing aircraft.. Combining both active and passive safety features ensures that every new aircraft is designed and equipped to deliver on the trust that passengers place in both pilot...
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...Embraer: The Global Leader in Regional Jets 1. Embraer’s success as a global competitor can be separated into two distinct periods – pre-privatisation and post-privatisation. Pre-privatisation, Embraer was founded on the back of the Brazilian government’s push for developing aeronautics and as such it was given special treatment due to its position as a symbol of Brazilian nationalism. As such, it was able to achieve success initially due to many initiatives set up to promote aeronautic research by the government. Of particular importance is the subsidies received by Embraer, which helped it to achieve the majority market share in the commuter turboprop market with its ‘Bandeirante’ aircraft. The subsidies were believed to be in the region of 39-44% as claimed by their competitor Fairchild, which undoubtedly played a huge role in their early success. However, Embraer began to falter when a series of negative events began to hurt its profits when budgetary pressures as a result of macroeconomic difficulty in Brazil meant that they could no longer depend on subsidies to help boost sales. In addition, their political ties led to the development of CBA 123, which ultimately turned out to be a huge failure. To help examine Embraer’s post-privatisation success, we can use an adapted version of ‘The Four-Tiered Structure of Markets’ found in Khanna & Palepu (2006). In this adapted version of the regional aircraft manufacturing industry (Apendix 1), there are only three tiers namely...
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...Q1.How has Embraer managed to succeed as a global competitor from within the confines of an emerging economy? Advantages and disadvantages Embraer has derived from the Brazilian context. Strong government support created competitive advantages in the aircraft industry and led Embraer to become a global player. As a factor condition in the determination of national competitive advantage by Porter (Exhibit 1), the government established an environment where Embraer was able to procure raw materials easily through no tax or duty on imports. To support Embraer’s business, related and supporting industries were developed by the Brazilian government setting aeronautics as a priority to grow the nation’s economy. The government tried to develop this industry not only for military needs but also for the civilian sector, so the company enjoyed special privileges such as being the supplier of choice for Federal agencies. These led to the successful entry into the U.S. market through certification from the U.S. FAA, resulting in Embraer capturing a major share of the commuter turboprop market. Advantages: • Embraer’s most profitable years came after the company was privatized with approval from the government in December 1994. In addition to increased flexibility, the privatization allowed Embraer to reduce the workforce and introduce organizational changes such as revamped incentive structures. • The Brazilian economy provided Embraer with lower labour costs (e.g. $10/hour lower...
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...New Entrants: Threat of new entrants for Bombardier in Canada is found to be moderate as it is difficult for the new entrants to enter in the market because of the existing giants like Chinese and Russian companies. Further, the cost to enter in the market is high along with massive capital investment. According to the data given in the case, the cost related to Cseries was more than $100 million by the end of 2007 along with $2 billion of the overall cost. Further, giants in the industry were enjoying economies of scale and already reached at the lower end of the learning curve. Supplier Power: The bargaining power of suppliers is found to be on the lower side because the regulatory bodies have embossed high-quality standards that cannot be overseen by the suppliers. Suppliers do not have the option to make any compromise on the quality of equipments used in the industry. Further, the industry is full of providers who are engaged in supplying 55000 components of the airplane. Buyer Power: Bargaining power of customers for Bombardier is found to be low because the buyers don’t have many choices, and thus, they have to limit themselves into few companies. Limited powers to buyers have a positive impact on the companies and have a momentous impact therefore; one has to put more weight for this attribute. Threat of substitutes: Threat of substitutes is found to be low because Performances of the other means of transportation are not superior to the airline industry, thus;...
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...Innovating with Ingenuity Chapter 8, Innovating with Ingenuity, shows us how companies around the world have been innovating. It is important to understand what ingenuity really means. It is defined as the quality of being ingeniously inventive, creative, and practical; inventiveness. The chapter starts out with the quote, “When people ask me ‘What is your competitive advantage?’ I say, ‘The quality of our engineers.’” This was stated by Mauricio Botelho, President and CEO of Embraer (A successful Brazilian aircraft manufacturer) from 1995 to 2007. John Engler, president of the National Association of Manufacturers, in 2005 said that the United States is and remains on being the world’s frontrunner in innovation. He emphasizes that other countries are advancing in technology as enthusiastically as we are and that therefore we cannot assume we are safely ahead of the world. Throughout the chapter we are shown how challengers have been investing in innovation by capitalizing in research and development. Some examples included are companies like ZTE, a Chinese telecom equipment maker that spent 12% of its $3 billion 2006 revenue on research and development. In accordance to VentureOne, Venture capitalists invested $1.89 billion in Chinese companies in 2006. In total, from 2005 to 2006 there was a 34% increase in investments in Chinese information technology firms. Governments are also becoming aware of how important innovation is when it comes to modernization. For example...
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...Next, let’s move to response to recommendations. The executive team gives three main problems, which are SkyWest Reliance on United and Delta for its customers and revenue, Atlantic Southeast Airline’s poor customer service, and SkyWest has High Operating Costs as compared to competitors. However, the executive team just focuses on first two of them and gives the recommendations. The first recommendation is try to acquire contracts with low-cost providers, such as Southwest and JetBlue. We are agreeing with this recommendation. Because, if SkyWest only rely on United and Delta, it will increase their financial risk, assume one of them have a financial or managerial problem, the SkyWest will have a hard time, and that not only will affect their total revenue, but their public reputation and the power of competitive in this market. Also, only have United and Delta will limited the resource of income; therefore, find some more copartner is reasonable, but due to the SkyWest’s financial situation, the low-cost providers can be on the list. However, the question is whether Southwest and JetBlue, they are individual company, and they doing well on their business, so why they will come to SkyWest? What benefit that SkyWest can provide to those companies due to their current finical situation or the future years? We need more detail. The second recommendation is SkyWest share customer service strengths with ASA. And we agree with this recommendation. For any customer, when they...
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...Problema: Custos e Eficiências em Rotas Aéreas Diante da falência da Viação Aérea Rio de Janeiro - VARIJ, a Agência Nacional de Aviação Civil – ANAC impôs à Companhia Aérea Transportes Aéreos Niterói - TAN que esta assumisse 20 rotas que vinham sendo operadas pela VARIJ. Rotas CGH-SDU SDU-CGH CGH-UDI UDI-CGH GRU-BSB BSB-GRU SDU-FLN FLN-SDU GRU-GIG GIG-GRU CGH-LDB LDB-CGH GIG-MAO MAO-GIG GRU-REC REC-GRU GRU-SSA SSA-GRU BSB-CWB CWB-BSB Distância (NM) 203 203 307 307 476 476 421 421 179 179 254 254 1584 1584 1118 1118 797 797 602 602 A TAN realizou uma pesquisa junto aos registros da INFRAERO para obter o número de passageiros que utilizaram tais rotas nos últimos 5 anos. Tais números foram consolidados de forma a se obter a média de passageiros em cada rota nos 20 trimestres que compõem o período de 5 anos do estudo. Trimestres Rotas CGH-SDU SDU-CGH CGH-UDI UDI-CGH GRU-BSB BSB-GRU SDU-FLN FLN-SDU GRU-GIG GIG-GRU CGH-LDB LDB-CGH GIG-MAO MAO-GIG GRU-REC REC-GRU GRU-SSA SSA-GRU BSB-CWB CWB-BSB 1 119 148 77 68 106 99 92 97 116 125 61 62 72 73 81 81 100 92 152 155 2 122 148 75 67 107 104 93 95 117 127 60 61 73 72 83 79 100 93 150 153 3 124 144 74 67 111 101 92 95 120 125 58 59 76 73 81 80 97 92 152 151 4 127 147 74 66 110 105 91 94 119 125 58 58 76 76 84 82 97 91 148 155 5 128 148 74 67 111 104 93 94 118 127 58 57 77 76 84 83 98 94 151 153 6 132 146 72 65 113 108 90 93 119 126 56 57 77 79 86 84 100 94 148 149 7 133 146 73 64 115 109 90 96 122 127 56 56 80 79 85 83 101...
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...conducted to suggest a strategic plan that Embraer would pursue over the next three to five years. The analysis will identify the competitive positions that Embraer has in the aircraft industry as well as identify the three major rivals listing their strengths and weaknesses. The analysis will also include the successful strategies that Embraer used to compete against its more established rivals. The analysis will be of assistance in understanding the reasoning for the suggested strategy. Following an approval of the strategy, a detailed strategy plan will be provided to you by the assigned deadline. Analysis: Using Porter’s diamond of national competitiveness to provide a convenient way to analyze the potential reasons for Embraer’s success, we verified that human resources and people with education and knowledge are factor conditions of the diamond. Most of the hired engineers have been students in the Aeronautical Technological Institute (ITA). The government Aviation schools provided a great overall national competitive advantage. As for the supportive institutional framework, the government had a roll in funding Embraer in its early days. As well, Aeronautical Technology Center (CTA) and Aeronautical Technological Institute (ITA) created a supreme opportunity for the company. Embraer took advantage of the untapped demand for regional airlines; and this covers the demand factors of the diamond. As for the local competitive intensity, Embraer did not face national competitiveness...
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...1. How has Embraer managed to succeed as a global competitor from within the confines of an emerging economy? Advantages and disadvantages Embraer has derived from the Brazilian context. It was no coincidence that Embraer’s most profitable years came after the company was privatized in December 1994. The benefits of the privatization are best summarized by EVP Horacio Forjaz, an Embraer employee since 1974, when he commented that “[Embraer] would have never been able to make the decisions we made, with the speed at which we made them, if we had still been state-owned enterprise. Approvals are much slower when you deal with government officials.” In addition to increased flexibility, the privatization allowed Embraer to reduce the workforce and introduce organizational changes such as revamped incentive structures. In addition to the privatization, there were other key attributors to the company’s turnaround. Firstly, the Brazilian economy provided Embraer with lower labour costs (e.g. $10/hour lower cost for engineers in comparison to Bombardier). The lower production costs enabled Embraer to price its planes more competitively than its competitors. Secondly, the layout of Brazil forced the country as a whole to develop aviation as a means of transportation. This led to Brazil setting up industrial hubs to support Embraer. Other competitors likely did not face the sort of pressure, were the transportation needs of a whole country depended on Embrear’s success. Lastly...
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...FollowedPopular Download 0 Go BackComment Link Embed Zoom of 00 Readcast 0inShare EMBRAER CASE STUDY : Resources and Competance, Value ChainCompetitors have claimed that Embraer’s competitive advantage is unfair, sustained only by ongoing direct and indirect government support.while government support wasimportant in helping the firm evolve into a major player in the regional aircraft market,such support has also been available to Embraer’s competitors. Embraer’s success musttherefore be attributed to other competitive advantages.Given its limited resources, especially during the reduction in direct government support,Embraer’s strategy has been to focus its R&D funds on key technologies that it caneffectively produce in house. It has outsourced the production of components that other companies can manufacture more efficiently.Embraer has focused its R&D on the development, systems engineering and integrationof the more than 28,000 parts and components that make up an aircraft. The company has alsoretained the development and production of the plane’s fuselage, arguably the mosttechnically complex part of an airplane. To aid Embraer’s in-house technologicaldevelopment, the company invited international leaders in the field of aeronautics to become minority shareholders.To offset the risk of developing and producing some of the most costly andtechnologically challenging components, Embraer has also formed...
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...B has chosen ADP, Embraer, and Lowes for our three companies. As a team, we will calculate the current and quick liquidity ratios, profit margin, asset utilization, DuPont ratio, and financial leverage for each. A distinction will be made between cash and accrual basis accounting. Also, an illustration will be shown as to how the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) conferences influence presentations. In addition to the other information, Learning Team B will explain the differences as to what happens when a company uses cash basis accounting versus accrual basis. Financial Analysis Computations ADP The original outsourcer, Automatic Data Processing (ADP) has still got it. ADP is one of the largest payroll and tax filing processors in the world, serving about 550,000 clients. Employer services (payroll processing, tax, and benefits administration services) account for the majority of the company's sales, and it’s PEO (Professional Employer Organization) services are provided through ADP Total Source. ADP also provides inventory and other computing and data services to some 25,000 auto, motorcycle, truck, and recreational vehicle dealers. Other offerings include accounting, auto collision estimates for insurers, employment background checks, desktop support, and business development training services (www.dailyfinance.com). Embraer Embraer is the second company Team B has chosen. Embraer is a Brazilian industrialized...
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...Embraer and Cessna Market Segmentation Embraer is a Brazilian aerospace company that produces commercial, military, executive, agricultural aircraft and provides aeronautical services. The Cessna Aircraft Company is an American general aviation aircraft manufacturing corporation headquartered in Wichita, Kansas. Best known for small, piston-powered aircraft, Cessna also produces business jets. Market Segmentation Cessna Aircraft are sold to private businesses, governments, individuals, freight airlines, charter airlines, and air taxi companies. Cessna has several competitors domestically and internationally in various market segments. Cessna’s aircraft compete with other aircraft that vary in size, speed, range, capacity and handling characteristics on the basis of price, product quality and reliability, product support and reputation. Embraer (ERJ) operates in the following four major business segments: commercial aviation, defense and security, executive jets, and agricultural aircraft. Commercial aviation is Embraer’s largest business segment, contributing about 52% of the company’s total sales. Applying the concepts of determinants of service quality by Parasuraman, Zeithaml, & Berry (1985) to Embraer and Cessna Reliability: Cessna’s Promise “Safety is the top priority for Cessna when designing and manufacturing aircraft.. Combining both active and passive safety features ensures that every new aircraft is designed and equipped to deliver...
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...Doris Chow Part IV: Sections 1(D) & (E) Promotion Mix (D) **You will need to delete in RED as it helps you piece it together as whole Brazil boasts having a reputation of fabricating some of the world’s most creative advertising especially when it is entertaining which includes familiar venues like the United States but in addition evening soap operas known as telenovelas and sporting events are popular and coveted advertising space (O’Barr, 2008). Since the average Brazilian tends to watch an average of five hours of television per day, television comprises of 59% of the media mix and the Brazilians are overtly loyal to their evening news and telenovelas so to center their time around those events (Millwardbrown, n.d). Other media channels include the newspaper at 18%, magazines at 9%, radio at 4.5%, and internet at 1.5% but growing fast (Millwardbrown, n.d). Millwardbrown (n.d) further advises that Brazilians “don’t usually like comparative ads or ads that denigrate the competitor” and states that advertising investments is 50 times less than U.S or less than 1% of GDP and that the majority is spent with the dominant advertising force at Rede Global de Televisao (television) who owns the majority of the channels in Brazil. Costs for advertising are increasing and as of 2006, R$ 950 million was spent (Millwardbrown, n.d). Acir (2011) points out that it is important to realize that the internet industry is on the rise and changes to advertising in this media mix should...
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...Innovating with Ingenuity Chapter 8, Innovating with Ingenuity, shows us how companies around the world have been innovating. It is important to understand what ingenuity really means. It is defined as the quality of being ingeniously inventive, creative, and practical; inventiveness. The chapter starts out with the quote, “When people ask me ‘What is your competitive advantage?’ I say, ‘The quality of our engineers.’” This was stated by Mauricio Botelho, President and CEO of Embraer (A successful Brazilian aircraft manufacturer) from 1995 to 2007. John Engler, president of the National Association of Manufacturers, in 2005 said that the United States is and remains on being the world’s frontrunner in innovation. He emphasizes that other countries are advancing in technology as enthusiastically as we are and that therefore we cannot assume we are safely ahead of the world. Throughout the chapter we are shown how challengers have been investing in innovation by capitalizing in research and development. Some examples included are companies like ZTE, a Chinese telecom equipment maker that spent 12% of its $3 billion 2006 revenue on research and development. In accordance to VentureOne, Venture capitalists invested $1.89 billion in Chinese companies in 2006. In total, from 2005 to 2006 there was a 34% increase in investments in Chinese information technology firms. Governments are also becoming aware of how important innovation is when it comes to modernization. For example, the Russian...
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...1. Introduction My topic will deals with the aeronautics industry and especially planes and helicopters in the world. Through my last experience in Eurocopter-EADS, I discover the aeronautics industry as a complex web and as an important economic factor. This industry also reflects the economic and technological progress of an entire country. Contrary to others industries like automobile, there is only few manufacturers which deals with an international market with many different segments. 2. Market The market is divided in two major distinct parts: civilian and military, plus the kind of aircraft (exhibit 1). Politics and government is major stakes in this industry, especially on the military side. The expenditures are programmed by government and they also support the promotion abroad. Before each command, it is usual that head of state meet before signing a contract on planes or helicopter, as the case between France and his competitor for the Brazilian air force. Each contract takes several years to be complete more the time to build up the product. The current economic situation has a strong impact on aeronautics companies, even if commands books are full for several years, some cancelation thus development delays deeply impact their economic situation, For the civilian side the tendency for the transportation of people or goods by plane suffer from a decrease of activity. On the military side, it seems that more the economy decrease, the more military industry...
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