Embraer: Flying Further and Faster into the Future

EmbraerA corporate strategy article by Thunderbird students Mitch Epstein, Chad Bonfiglio, Trudy Sharp, Edgar Khachatryan and Alyssa Watt

Embraer, a Brazilian aircraft manufacturing company, flew into a lead role in the regional jet industry. With a tagline of “For the Journey,” Embraer faces significant pressure and competition.  In order to maintain and extend its lead in the industry, Embraer will have to build on its unique history and push harder and deeper into strategic relationships and innovations.

National Champion

Embraer’s unique relationship with the Brazilian government has positioned the company well to continue pursuing its lead in the regional aircraft market.  When the Brazilian government was looking for a national champion in the late 1960s, in the airplane manufacturing sector, it created its own “mixed enterprise.”  Created in 1969 as a joint venture, shareholders and the Brazilian government formed Empresa Brasileira de Aeronáutica, better known as EMBRAER.

Brazil’s Mining Giant’s New Era

China counterfeitsVale: Can a Reluctant National Champion Stay Globally Competitive?

A corporate strategy article by Thunderbird students, Eduardo Da Silva, Lucas Hendee, Patrick Jaszewski, Rebecca Lau, Tim Murphy and Indra Wiryadinata.

Boom Times

After its privatization in 1997 and the appointment of Roger Agnelli as its CEO in 2001, Brazilian mining company Vale has become the darling of Wall Street. Under Agnelli’s leadership, Vale has streamlined and focused business operations, making it the world’s largest iron ore exporter and second largest mining company. Meanwhile, Vale’s market capitalization grew from US$9 billion to US$100 billion. Industry observers believe Vale’s success is driven by booming domestic demand. With a population of 200 million, Brazil is a fast-growing nation with huge market potential. The country’s need to further develop its infrastructure will continue to fuel domestic demand for iron ores and other metals and minerals. To capitalize on these opportunities, Agnelli (known as the “Iron Man” for his nerves of steel and knack for negotiation), divested businesses that would distract it from its core competency, metal mining, especially in iron ore, copper and zinc. The divested businesses included paper and pulp, steel, and transportation. In addition to distracting management from Vale’s core operations, these businesses were heavy electricity users, making Vale heavily dependent on the whims of the Brazilian government, which controls electricity production. The strategic alignment to Vale’s core competencies eventually allowed Vale to control about 90% of Brazil’s iron ore production.

Battle for World Beer Dominance: SABMiller Enters Brazil

ebay in ChinaA corporate strategy article by Thunderbird students Joel Baughman, Srinivas Chundi, Mikhail Kholyavko, Chintan Patel and Chris Vadner

There are striking similarities between the colonial powers of past and contemporary beer conglomerates. For years, there has been an uneasy quiet in the world beer markets as brewers have carved out territories and regions for themselves, often finding themselves in close proximity with competitors. Until now, they have appeared reluctant to disturb the status quo and encroach on competitors’ turf in pursuit of increased market share. Nevertheless, consolidation has accelerated in recent years, leading to high industry concentration. The growth in demand for beer in emerging markets, coupled with saturation and stagnation in developed markets, promises to unsettle this uneasy calm and force brewers to rethink their strategy. As these large conglomerates come under increasing pressure from restless investors looking for revenue and profit growth, any gentleman’s agreement that might exist is less likely to be honored in the future. Major players are poised to engage in full-blown competitive conflict in order to conquer new markets.

Subscribe to RSS - Brazil