Embraer: The Global Leader in Regional Jets SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Embraer: The Global Leader in Regional Jets
Embraer is the story of a company from a developing country, Brazil, that has become the leader in a high-tech field, regional passenger jets. Embraer's first family of regional jets has been highly successful and, at the time of the case, it is embarking on a major commitment to a second, larger family. At the same time, though, it is embroiled in a bitter dispute at the World Trade Organization about Brazilian export financing. In addition, it faces issues related to its capital structure and corporate strategy.
Authors :: Pankaj Ghemawat, Gustavo A. Herrero, Luiz Felipe Monteiro
Swot Analysis of "Embraer: The Global Leader in Regional Jets" written by Pankaj Ghemawat, Gustavo A. Herrero, Luiz Felipe Monteiro includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jets Embraer facing as an external strategic factors. Some of the topics covered in Embraer: The Global Leader in Regional Jets case study are - Strategic Management Strategies, Competitive strategy, Costs, Emerging markets, Marketing, Policy, Product development and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Embraer: The Global Leader in Regional Jets casestudy better are - – increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, geopolitical disruptions, technology disruption, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies,
talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Embraer: The Global Leader in Regional Jets
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Embraer: The Global Leader in Regional Jets case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jets Embraer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jets Embraer operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Embraer: The Global Leader in Regional Jets can be done for the following purposes –
1. Strategic planning using facts provided in Embraer: The Global Leader in Regional Jets case study
2. Improving business portfolio management of Jets Embraer
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jets Embraer
Strengths Embraer: The Global Leader in Regional Jets | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jets Embraer in Embraer: The Global Leader in Regional Jets Harvard Business Review case study are -
Ability to recruit top talent
– Jets Embraer is one of the leading recruiters in the industry. Managers in the Embraer: The Global Leader in Regional Jets are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Jets Embraer in the sector have low bargaining power. Embraer: The Global Leader in Regional Jets has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jets Embraer to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Jets Embraer is one of the most innovative firm in sector. Manager in Embraer: The Global Leader in Regional Jets Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Jets Embraer has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Embraer: The Global Leader in Regional Jets HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Jets Embraer is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Jets Embraer has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Jets Embraer has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Embraer: The Global Leader in Regional Jets - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– Embraer: The Global Leader in Regional Jets firm has clearly differentiated products in the market place. This has enabled Jets Embraer to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Jets Embraer to invest into research and development (R&D) and innovation.
Training and development
– Jets Embraer has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Embraer: The Global Leader in Regional Jets Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High brand equity
– Jets Embraer has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jets Embraer to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Jets Embraer are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Jets Embraer is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Pankaj Ghemawat, Gustavo A. Herrero, Luiz Felipe Monteiro can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Embraer: The Global Leader in Regional Jets | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Embraer: The Global Leader in Regional Jets are -
High bargaining power of channel partners
– Because of the regulatory requirements, Pankaj Ghemawat, Gustavo A. Herrero, Luiz Felipe Monteiro suggests that, Jets Embraer is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to strategic competitive environment developments
– As Embraer: The Global Leader in Regional Jets HBR case study mentions - Jets Embraer takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Jets Embraer supply chain. Even after few cautionary changes mentioned in the HBR case study - Embraer: The Global Leader in Regional Jets, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Jets Embraer vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jets Embraer is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Embraer: The Global Leader in Regional Jets can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Embraer: The Global Leader in Regional Jets HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Jets Embraer has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Embraer: The Global Leader in Regional Jets has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Jets Embraer 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Embraer: The Global Leader in Regional Jets, in the dynamic environment Jets Embraer has struggled to respond to the nimble upstart competition. Jets Embraer has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Jets Embraer has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Jets Embraer is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Jets Embraer needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jets Embraer to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Embraer: The Global Leader in Regional Jets that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Embraer: The Global Leader in Regional Jets can leverage the sales team experience to cultivate customer relationships as Jets Embraer is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Jets Embraer has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Embraer: The Global Leader in Regional Jets | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Embraer: The Global Leader in Regional Jets are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Jets Embraer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Jets Embraer to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Jets Embraer has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Embraer: The Global Leader in Regional Jets - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jets Embraer to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Jets Embraer to increase its market reach. Jets Embraer will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Jets Embraer in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Jets Embraer to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Jets Embraer can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jets Embraer can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Jets Embraer can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Jets Embraer in the consumer business. Now Jets Embraer can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Jets Embraer can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jets Embraer can use these opportunities to build new business models that can help the communities that Jets Embraer operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Jets Embraer has opened avenues for new revenue streams for the organization in the industry. This can help Jets Embraer to build a more holistic ecosystem as suggested in the Embraer: The Global Leader in Regional Jets case study. Jets Embraer can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Embraer: The Global Leader in Regional Jets External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Embraer: The Global Leader in Regional Jets are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Embraer: The Global Leader in Regional Jets, Jets Embraer may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Environmental challenges
– Jets Embraer needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Jets Embraer can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Jets Embraer.
High dependence on third party suppliers
– Jets Embraer high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Jets Embraer can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Embraer: The Global Leader in Regional Jets .
Regulatory challenges
– Jets Embraer needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Increasing wage structure of Jets Embraer
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Jets Embraer.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jets Embraer in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Jets Embraer demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Jets Embraer has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Jets Embraer needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Stagnating economy with rate increase
– Jets Embraer can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Jets Embraer in the Strategy & Execution sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Jets Embraer is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Embraer: The Global Leader in Regional Jets Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Embraer: The Global Leader in Regional Jets needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Embraer: The Global Leader in Regional Jets is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Embraer: The Global Leader in Regional Jets is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Embraer: The Global Leader in Regional Jets is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Jets Embraer needs to make to build a sustainable competitive advantage.
