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The Emergence Of A Global Aircraft Manufacturing Brand

1889 words - 8 pages

In the article which I have chosen, the author discusses one of Latin American’s most successful business stories in the last 20 years. This success comes despite the fact that the company is from an emerging market and developing country. The Brazilian company Embraer may not be known to the general public but it is known to those who make decisions on aircraft purchases including: international airlines, business jet owners, and military contractors. To build the reputation of the company and to become a success, there had to be an adequate knowledge of foreign markets and how to enter them. No aircraft manufacturer has been successful over the long run by staying in a home domestic market. Airline manufacturers such as Tupolev and Ilyushin which have stayed under the Russian government’s arm have suffered from this. As the article states, Embraer has chosen a different path. It was once, like the Russian companies named above, primarily part of its country’s aeronautics branch and, as a result, it has had its advantages including nearly unlimited funds which the company could use in its research and development. They used these funds to “invest in broad-ranging R&D activities” (Promocorp). Despite this help, the company was not able to become successful and as recent as the 1990’s the company was facing financial problems which were threatening to close its doors. Due to the financial pressure that an aircraft manufacturer could put on a government, the Brazilian government had chosen to privatize the company. Although this was probably not done intentionally, this decision proved to be the best thing that could have been done for the then small aircraft manufacturer and in a relatively short space of time, “Embraer’s growth has been nothing short of astonishing” (Promocorp). “Embarer’s annual revenue increased more than 700% between 1997 and 2008 and has seen its shipment of commercial planes increase a remarkable 500% over the same period” (Promocorp). The article has attributed much of the success to finding areas of competitive advantage and also the company’s ability to engage in a “sound international trade strategy” (Promocorp). If most passengers have flown to any smaller market airport in the United States, such as Monroe, Louisiana, most probably they have flown on an Embraer product. For the past decade, the manufacturer has engaged in an aggressive strategy to make this happen and gain the presence which it has established. To do so, the company will have had to decide what foreign market tactics to use and have a thorough understanding of all the topics discussed in Chapter 9 of Global Business by Peng. The topics they would have had to deal with include: overcoming the liability of foreignness, where, when and how to enter.
Embraer, in becoming a worldwide brand, has had to overcome the liability of its own foreignness. It has been noted that foreign firms start at a disadvantage and are often “discriminated against,...

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